THURSDAY, 19 MAY 2022
The Speaker took the Chair at 2 p.m.
KARAKIA/PRAYERS
DEPUTY SPEAKER: E te Atua kaha rawa, ka tuku whakamoemiti atu mātou, mō ngā karakia kua waihotia mai ki runga i a mātou. Ka waiho i ō mātou pānga whaiaro katoa ki te taha. Ka mihi ki te Kuīni, me te inoi atu mō te ārahitanga i roto i ō mātou whakaaroarohanga, kia mōhio ai, kia whakaiti ai tā mātou whakahaere i ngā take o te Whare nei, mō te oranga, te maungārongo, me te aroha o Aotearoa. Āmene.
[Almighty God, we give thanks for the blessings which have been bestowed on us. Laying aside all personal interests, we acknowledge the Queen, and pray for guidance in our deliberations, that we may conduct the affairs of this House with wisdom and humility, for the welfare, peace, and compassion of New Zealand. Amen.]





PETITIONS, PAPERS, SELECT COMMITTEE REPORTS, AND INTRODUCTION OF BILLS
SPEAKER: A petition has been presented to the Clerk for presentation.
CLERK: Petition of Barnabas Fund New Zealand requesting that the House urge the Government to officially recognise as genocide the mass murder of Armenian, Assyrian, Syriac, and Greek Christians in the Ottoman Empire.
SPEAKER: That petition stands referred to the Petitions Committee.
On 17 May, the Ministry for the Environment, Manatū Mō Te Taiao, Aotearoa New Zealand's First Emissions Reduction Plan, together with Aotearoa New Zealand's First Emissions Reduction Plan: Table of Actions were presented. Those papers are published under the authority of the House.
Select committee reports have been delivered for presentation.
CLERK: Report of the Finance and Expenditure Committee on the Reserve Bank of New Zealand's Financial Stability Report May 2022.Report of the Justice Committee on the petition of Karl Thomas.Reports of the Regulations Review Committee on the complaint about the Resource Management (National Environmental Standards for Freshwater) Regulations 2020 and on the examination of COVID-19 orders presented between 16 and 29 March 2022.
SPEAKER: The reports of the Finance and Expenditure and Regulations Review committees are set down for consideration. The Clerk has been informed of the introduction of bills.
CLERK:Appropriation (2020/21 Supplementary Estimates) Bill, introduction.Repeal of Good Friday and Easter Sunday as Restricted Trading Days (Shop Trading and Sale of Alcohol) Amendment Bill, introduction.Electoral (Strengthening Democracy) Amendment Bill, introduction.Increased Penalties for Breach of Biosecurity Bill, introduction.
SPEAKER: Those bills are set down for first reading.





SUPPLEMENTARY ESTIMATES DOCUMENTS
Hon GRANT ROBERTSON (Minister of Finance): I present the Supplementary Estimates of Appropriations for the Government of New Zealand for the Year Ending 30 June 2022.
SPEAKER: That paper is published under the authority of the House.





BUDGET DOCUMENTS
Hon GRANT ROBERTSON (Minister of Finance): I present the 2022 Budget speech; the Budget at a Glance 2022; the Wellbeing Budget 2022, including reports on the fiscal strategy, on child poverty, and the summary of initiatives; the Budget Economic and Fiscal Update 2022; and the Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2023.
SPEAKER: Those papers are published under the authority of the House.





APPROPRIATION (2022/23 ESTIMATES) BILL
Introduction
CLERK: Appropriation (2022/23 Estimates) Bill, introduction.
SPEAKER: The Appropriation (2022/23 Estimates) Bill is set down for first reading forthwith.





First Reading
Hon GRANT ROBERTSON (Minister of Finance): I move, That the Appropriation (2022/23 Estimates) Bill be now read a first time. 
SPEAKER: The question is that the motion be agreed to.
Motion agreed to.
Bill read a first time.





BUDGET STATEMENT
Second Reading
Hon GRANT ROBERTSON (Minister of Finance): I move, That the Appropriation (2022/23 Estimates) Bill be now read a second time. 
It is my great pleasure to present New Zealand's fourth Wellbeing Budget. In each of this Government's three previous Wellbeing Budgets, we have not only considered the performance of our economy and finances but also the wellbeing of our people, the health of our environment, and the strength of our communities.
In Budget 2020 and 2021, we applied that wellbeing approach to dealing with COVID-19. This meant taking a health- and science-led approach, focusing on caring for our people and our communities. It has meant that New Zealand has reached this stage of the pandemic in as good a position as any other country. That is not just because we still have one of the lowest death rates from COVID but also because our economy is in a stronger position than most. This has been recognised by two triple A credit ratings from leading ratings agencies, and by the likes of the OECD and IMF. It has been a tough couple of years for New Zealanders. I want to again thank businesses, workers, and all members of the community for your hard work. It means we are now in a strong position to meet the next set of challenges and take the new opportunities to provide all New Zealanders with economic security in good times and bad.
The investments we are making in this Budget build on the progress made in Budget 2021 towards the Government's three goals for this term. These are: continuing to keep New Zealanders safe from COVID-19; accelerating the recovery and the rebuild from the impacts of COVID-19; and laying the foundations for the future, including addressing key issues such as climate change, housing affordability, and child poverty.
Budget 2022 invests $5.9 billion a year in net new operating spending while introducing multi-year funding packages that also draw from Budget 2023 and Budget 2024 operating allowances. We are investing $2.9 billion from the Climate Emergency Response Fund (CERF) to meet our emissions reduction plan and lay the foundations for a long-term transition to a low-emissions, high-wage economy. We are also supporting New Zealanders to meet the rising cost of living caused by global inflation pressures, through a targeted package of support focusing on low and middle income New Zealanders, including a short-term cost of living payment for around 2.1 million people.
New Zealand's overall wellbeing has held up well during the COVID-19 pandemic. Our mortality rate remains lower than those of our international peers, and life satisfaction remains high across all ethnicities. While the economic contraction associated with COVID-19 was much deeper and much more sudden than what New Zealand experienced during the global financial crisis, the economy has proven to be resilient, with economic activity in the December 2021 quarter 3.5 percent ahead of pre-pandemic levels.
Unemployment at 3.2 percent is at record lows, household incomes have continued to rise, and balance sheets are strong across almost every sector. We have done this with some of the lowest debt in the world. Our net debt is forecast to be around one-half of Australia's, a quarter of the UK's, and a fifth of the USA's, using a comparable measure. As I have indicated, we are moving to a new debt indicator that is more in line with how other countries measure their net debt, and more accurately reflects the Government's fiscal position. On that indicator, net debt will now peak at 19.9 percent of GDP—or 41 percent using the old indicator—before reducing further over the forecast period.
Economic growth is forecast to peak at 4.2 percent and average 2.1 percent across the forecast period. We are forecast to reach an operating balance before gains and losses—the OBEGAL—surplus in the 2024-25 financial year. This will be five years after COVID hit us and is a year earlier than the previous Government returned to surplus after the global financial crisis. New fiscal rules will oblige the Government to run a small surplus on average, over time, once we have returned to surplus, and maintain net debt at a ceiling below 30 percent of GDP. 
This approach means that current expenses will be met from current revenue. We will have a prudent level of debt that allows for a buffer against future shocks while providing room for high-quality and much-needed investment to close our infrastructure deficit. This balanced approach to fiscal policy is critical as we face the immediate challenges that are in front us and as we address the long-term issues in our economy. The impacts of COVID-19 remain with us. Experiences of the pandemic differ greatly among New Zealanders, and its long-term effects have yet to be seen. Long-standing challenges around climate change, child poverty, productivity, and housing quality and affordability have not lost their urgency.
On top of that, Budget 2022 is being delivered in a difficult time for the global economy and for many New Zealanders. The impacts of rising inflation due to COVID, supply chain challenges, and pressure on oil prices from the Russian invasion of Ukraine are being felt at the petrol pump and at the supermarket. This Budget responds to these immediate challenges facing New Zealanders while also looking ahead. The here and now matters, but so too does tomorrow and making sure that we provide for a secure future. This Budget is about both—a careful balance to provide economic security into the future and make sure we invest for what is needed now without adding to the drivers of inflation.
I will talk more about our long-term initiatives shortly, but first, I want to focus on our immediate challenges. I am acutely aware of the cost of living pressures that exist for many people, particularly those on low and middle incomes. While the current levels of inflation are expected to be temporary, this doesn't take away from the impact it is having on households and businesses. New Zealanders are not alone in feeling these pressures: recently, the US has recorded inflation of 8.5 percent; Canada, 6.7 percent; Germany, 7.3 percent; and, as of last night, the UK, 9 percent. The very latest OECD average was inflation of 8.8 percent in March, putting New Zealand about middle of the pack. Such international comparisons, however, do not diminish the impact on New Zealanders who are currently struggling to deal with rising costs.
The Government, throughout COVID, has supported households and businesses. More than $20 billion was provided in across-the-board support from the wage subsidy scheme, resurgence support, and COVID support payments. This has kept many people in work: 62 percent of all jobs were supported in 2020 by the wage subsidy scheme, and 47 percent in 2021.
In response to the rapid spike in global oil prices following the war in Ukraine, we moved quickly in March to reduce the fuel excise by 25c a litre. For a family that fills up an average car every week, that represents up to $17 per tank, or more than $220 worth of support over the three months. Road-user charges were similarly reduced and public transport prices halved for the same period. These measures were on top of changes we made to increase income support for low and middle income families from 1 April this year, including a third lift in weekly main benefit rates following those in 2020 and 2021. The changes we have made since coming into Government mean that 364,000 people who receive income support are better off by an average of $109 per week. For those with children, they are better off by an average of $175 per week.
As we move through these next few months, further targeted support is being provided for low and middle income New Zealanders. The resumption of the winter energy payment from 1 May is providing this for superannuitants and those on income support, with at least $80 per month from the beginning of May until the end of September.
But the increasing cost of living is affecting those on middle incomes as well. To provide targeted support to a wider group, through this Budget the Government is investing more than $1 billion in a cost-of-living package targeted at low and middle income households. The package includes: an extension to the reduction of fuel excise duty introduced in March, by two months until mid-August; an extension of the road user charges cuts introduced in April, until mid-September; and an extension of half-price public transport fares introduced on 1 April, until the end of August. I can also announce today that, from September, we will introduce Community Connect, to extend half-price public transport to the more than one million community services card holders on a permanent basis. In addition to helping reduce costs for households, the public transport price cuts will also further our climate change and emissions reduction objectives. 
We will also provide short-term targeted support to low and middle income New Zealanders through a $350 cost of living payment, across three monthly instalments from August 1. This works out to about $27 per week for an estimated 2.1 million New Zealanders. This payment will be available to people aged 18 and over who earn below $70,000 per annum, based on last year's tax data, and who are not eligible for the winter energy payment.
We are well aware that this is only a contribution to the increased costs that people are facing, but it is a targeted way we can support people through this challenging period while not excessively exacerbating inflation. The payment has been set at half of the couple rate of the winter energy payment and is a recognition of the impact of inflation on a wider group of New Zealanders than those currently eligible for the winter energy payment. As a result of both the winter energy payment and the cost of living payment, 81 percent of working-age New Zealanders are being given temporary support to deal with cost of living pressures. 
The Budget provides further important changes that will support those on low incomes. Budget 2022 will change how sole-parent beneficiaries receive child support payments. These payments will be directly passed on as income to sole parents receiving benefits from 2023, giving them more money to help their families and whānau. This change is estimated to lift between 6,000 and 14,000 children out of poverty.
We are also delivering on a manifesto commitment by more than trebling the level of dental grants available to low income earners to $1,000 per annum. Criteria changes will ensure these grants can be used for multiple visits for immediate and essential care.
While much of the inflation being experienced in New Zealand is driven by forces beyond our shores, we are also focused on addressing the supply constraints and other underlying issues that fuel it. This includes increasing labour supply through our immigration rebalance, and reducing our reliance on volatile commodities like oil by decarbonising our transport fleet through initiatives like the clean car discount.
We are also committed to boosting competition in New Zealand's grocery sector to ensure people pay fair prices for food and other basics. Today, we are introducing legislation that will remove barriers to new retailers entering the market. Specifically, this will prohibit the restrictive covenants on land that major grocery retailers use to limit site availability for competitors. Such covenants will be prohibited immediately once the bill comes into effect, and I anticipate that competitors can begin to consider new sites shortly thereafter.
There are other measures the Government will take in response to the Commerce Commission's recommendations, but this is one thing that can be done relatively simply and quickly. Overall, the cost of living package in Budget 2022 represents a targeted response to the pressures being faced by low and middle income households and provides support without making the cause of the problem worse.
Moving to our longer-term challenges and opportunities, Budget 2022 marks an historic milestone in tackling climate change. Climate change is the most pressing long-term challenge we face. It will have a significant impact on New Zealanders' living standards in the coming years, impacting the natural environment, our health, and our economic, social, and cultural wellbeing.
Recent reports that have highlighted worsening predictions for sea-level rise remind us again that we must act now for the sake of future generations. The action required presents opportunities to increase our economic security as we develop new low-emissions industries and the knowledge and skills needed to transition to a high-wage, low-emissions economy. New Zealand's reputation in the world, and the brand on which we trade, is tied to the action we take on environmental issues, including climate change.
Mitigating and adapting to climate change requires a sustainable, forward-looking response and significant investments across multiple Budgets. To address this, we have established the Climate Emergency Response Fund with an initial $4.5 billion down payment from the expected cash proceeds from the emissions trading scheme (ETS).
For Budget 2022, investments are focused on mitigation, particularly initiatives to deliver actions in the emissions reduction plan. In future, the criteria will be extended to include adaptation. As announced earlier this week, the CERF investments for Budget 2022 total $2.9 billion and include a strong focus on transport initiatives. These include $569 million to support low-income households to shift to low-emissions alternatives when scrapping a vehicle, and $375 million to reduce reliance on cars and support the uptake of active and shared transport modes.
There are also significant climate-focused energy and industry investments, including $653 million to fund further decarbonisation, including increasing the scope of the Government Investment in Decarbonising Industry Fund to support businesses to shift to low-carbon energy sources, and $73 million to deliver more insulation and heating retrofits for low-income homeowners by extending the Warmer Kiwi Homes programme.
In the agricultural sector, climate investments include $339 million of funding for a centre for climate action in agriculture to support innovation and research to reduce emissions, and $6 million for the implementation of an agricultural emissions pricing scheme, based on the outcomes of the Primary Sector Climate Action Partnership—He Waka Eke Noa.
In the forestry sector, $91 million is allocated to reduce the use of coal and other carbon-intensive fuels and materials by increasing woody biomass availability, and $145 million to create large-scale native forests as carbon sinks, to offset emissions in other sectors where abatement is difficult.
The Government's emissions reductions plan will help us meet the carbon budgets set by the climate commission. They are achievable but will require all sectors to play their part. They will also require sustained investment. Treasury has updated its forecasts for ETS cash proceeds by a total of $800 million, and the Government has agreed to use this increase to top up the fund, leaving $1.5 billion remaining. We will review the size of the fund on a regular basis, with the next opportunity being the Half Year Economic and Fiscal Update in December.
The climate investments we've announced in Budget 2022 are funded by those who pollute, not from increasing debt or other revenue. They will see the Government, in partnership with business, do the initial heavy lifting in our climate response and, in doing so, give households greater choice about how they participate in climate action.
I would like to acknowledge our cooperation agreement partners, the Green Party, and in particular the Hon James Shaw for his role across two terms of Government in bringing this work together. It is no longer good enough to just talk the talk on climate action. At Budget 2022, we walk the walk—or take public transport or another sustainable mode of transport; a dad joke for Minister Shaw.
COVID-19 has highlighted the need to reform New Zealand's health system and ensure we are delivering quality services nationwide in an equitable and sustainable way. Our health system is staffed by dedicated and talented health professionals, but the system in which they are working is fragmented, inefficient, and financially unsustainable. For too long, New Zealanders' access to health services has been a postcode lottery. For decades, we have seen inequalities grow in the health outcomes for Māori and Pacific peoples. Today, that changes.
Budget 2022 provides the largest investment ever in our health system, with $11.1 billion in new funding to put that system on a sustainable financial footing. This will ensure that Health New Zealand and the Māori Health Authority are able to make the changes needed to deliver better health services to New Zealanders wherever they live. To set this system up for success, we need to change the way we provide funding for health.
In recent years, district health boards have consistently run deficits, with funding unable to meet growing demand and address historic cost pressures. Relying on the annual Budget cycle for funding has made it difficult to plan for future investments and address long-term challenges in the health system. To address this, we are introducing a new multi-year funding model for health, beginning with two years of funding before eventually moving toward a three-year funding cycle from Budget 2024.
The two-year transitional package agreed through Budget 2022 begins with an investment of $1.8 billion per annum, including funding to deal with the deficits of the previous system. This will be followed by a further $1.3 billion per annum from 2023. Unlike in previous Budgets, where cost pressures for specific services have had to be traded off against each other, delayed or partly funded, this general increase will allow Health New Zealand to take a central view and identify priorities for funding across the system. The transformation of our health system will take time, but these first investments will make significant progress towards a fully equitable, sustainable, and quality health system for the future.
Within the funding allocated in Budget 2022, there is $488 million for primary and community care. This will roll out local models of care that are tailored to the populations they serve, as well as securing and developing the capacity and capability of Māori and Pacific healthcare providers.
The investments for Māori healthcare providers contribute to a wider package of initiatives totalling $580 million across the health, social, and justice sectors, which contribute to Māori health and wellbeing—this includes $166 million for Whānau Ora providers to continue supporting more than 40,000 whānau.
The Budget will also make the largest ever single contribution to Pharmac's medicines budget. We're investing $191 million over the next two years to make more medicines and other health treatments available. The two-year funding will align Pharmac with the new overall multi-year health funding allocation. Pharmac's total funding will be $1.2 billion, which is up 43 percent since we took office in 2017.
There is significant support in Budget 2022 to secure the future of our ambulance services: $166 million over four years provides funding to add 48 more ambulances and 13 other vehicles to New Zealand's road ambulance fleet and to allow up to 248 more paramedics and front-line staff to be recruited; $90.7 million over four years will go towards New Zealand's air ambulance services—this includes the replacement of some ageing aircraft with modern, fit for purpose helicopters and at least one new helicopter with additional crew.
Budget 2022 allocates $202 million to further improve New Zealanders' access to mental health and addiction services. This Budget focuses on improving care for those who have the highest needs. We're investing $100 million to increase the availability of specialist mental health and addiction services and to strengthen existing services in targeted areas across the country. We're also continuing to invest in two programmes that support young people's mental health: Mana Ake, which provides mental wellbeing support for primary and intermediate school - aged students, and Piki, a pilot scheme which provides integrated mental health and addiction support for young people.
We're also continuing our significant investment in hospitals and other health infrastructure, with an injection of a further $1.3 billion. This will include a further investment for the rebuild of Whangārei Hospital and the initial works to re-develop Nelson Hospital. This takes total health capital investment since Budget 2018 to more than $6.9 billion.
In every Budget, there are always smaller projects that might get lost on the day but are very meaningful. To highlight just one example: this year, we're providing $7 million of funding for the operation of portable retinal cameras to ensure equitable access for screening premature babies, to address one of the leading causes of blindness.
In total, around a third of Budget 2022 investments are for health. This speaks to our priorities as a Government. Our vision is for all New Zealanders—no matter where they live or who they are—to have access to high-quality health services to support the best quality of life. I am proud to say that this Budget is a significant step towards making this vision a reality.
In response to COVID-19, we went hard and we went early, an approach that has paid huge dividends. Key to this success was the establishment of the COVID-19 Response and Recovery Fund. This fund has allowed us to invest in crucial response functions and targeted supports that enable New Zealanders to weather and recover from the economic impacts of COVID-19. As our policy response to the pandemic evolves and we adjust to living with COVID-19, our fiscal response is evolving as well. Our COVID-19 response is increasingly part of standard Public Service delivery, so we no longer expect to need the funding flexibility that was essential early on. As a result, we have closed the COVID-19 Response and Recovery Fund. We are reprioritising the remaining funding and bringing future COVID-19 - related costs within standard Budget processes. We continue to have fiscal headroom to respond, as necessary, in the event of a major resurgence or a new variant. We are taking a prudent approach to that possibility by setting aside $1.2 billion so we can respond rapidly to any immediate public health needs related to COVID-19 that cannot wait until Budget 2023.
The uncertain and volatile global economic situation highlights the need for an economic plan that supports diversification of the New Zealand economy, creates new products and services, and increases our resilience in an uncertain world. Our economic plan is to build a high-wage, low-emissions economy that provides economic security in good times and in bad.
This Budget includes a substantial package to unleash the potential in our economy. We're funding the ongoing development of industry transformation plans (ITPs). ITPs bring industry players together to increase productivity and resilience. Budget 2022 invests $37 million for the Construction Sector Accord Transformation Plan to increase the productivity, capability, and resilience of our construction sector; $30 million for the Advanced Manufacturing ITP—this plan focuses on identifying existing and emerging points of comparative advantage and maximising our global brand and international connections; an additional $5 million for the Agritech ITP to build the skills and practices required to transform the sector into a sustainable and competitive export industry; and $20 million for the digital ITP to grow the software-as-a-service sector and ensure that we grow the skills and talent we need to create more high-wage jobs.
The Budget also recognises the importance of the tourism sector to rebuild in a sustainable way. An innovation programme for tourism is being created by reprioritising funding not required from earlier emergency support. It will be designed with the sector to ensure it targets investment to where we can truly innovate and develop our tourism offering.
Small businesses are a key component in the transition to a high-wage, low-emissions economy. We are setting aside $100 million of capital funding for a business growth fund being developed alongside New Zealand's major banks. This will improve small and medium enterprises' access to finance, enabling them to grow, create jobs, and increase their contribution to our wider economic development.
We know that, when our regions do well, all of New Zealand benefits. To help the people, businesses, and industries based in the regions reach their full potential, we are fully funding the $200 million Regional Strategic Partnership Fund to invest in local projects tailored to a region's particular needs and advantages. To further help those in the regions, we are fulfilling another manifesto commitment by investing $60 million to improve broadband infrastructure in the worst-served areas, enabling stronger connections and greater productivity.
This Government is focused on delivering better infrastructure, and that is a key component of our vision for a high-wage, low-emissions economy. Our first 30-year New Zealand Infrastructure Strategy from Te Waihanga, the New Zealand Infrastructure Commission, shows that, if we continue on the path of the past four decades, we will not be able to meet our future infrastructure needs. Under-investment in our crucial infrastructure is one of New Zealand's greatest long-term economic challenges. We have dedicated more than $60 billion to infrastructure over the next five years, but that alone is not enough. We need to be smarter about the way we plan, deliver, and use our infrastructure. This will mean getting more from the infrastructure that we do build, reducing costs, and prioritising for the greatest impact. Te Waihanga's strategy will be a key enabler of many of our Government's priorities—tackling the housing crisis, responding to climate change, and building a more secure economy.
Budget 2022's new investments in infrastructure include $349 million of capital funding to replace and modernise our rail assets, and $1.3 billion to upgrade our health infrastructure to support current and future demand. In total, Budget 2022 includes $4.7 billion of capital investments from the $9.8 billion multi-year capital allowance.
Budget 2022 also has a strong focus on transitioning to a digital economy, improving how we deliver public services and keeping our existing digital services safe from cyber-security risks. Key investments include: setting aside funding for a new digital system for our courts, making it easier for New Zealanders to interact with the justice system; $220 million of operating and $100 million of capital spending set aside for investments in health system data and digital infrastructure and capability; and an investment in critical satellite capability to improve the accuracy of GPS.
The Government is committed to delivering quality education, training, and skills development so that all New Zealanders get the opportunities they need to live the lives they value. The Budget 2022 package includes a total of $2 billion in operating funding and $855 million of capital for the education system, including investments in infrastructure, new initiatives, and funding to address critical cost pressures.
The newly developed Equity Index will receive $293 million operating and $8 million capital funding to replace the outdated decile system and significantly increase equity funding to schools. 
As part of the Government's commitment to strengthening the role of te reo Māori in our education system, Budget 2022 provides $75 million to support providers of te reo Māori immersion and kaupapa Māori learning throughout our education system. As demand for Māori language education grows, we are investing $21 million operating and $105 million capital investment to provide quality classrooms for our kura.
Investing in quality education means not only investing in students but also those who support them. Budget 2022 builds on the investment made in the past two Budgets by providing $275 million towards progressing pay parity in our early childhood education sector. 
The Government's investment in supporting employment opportunities for New Zealanders has been crucial to the COVID-19 response and recovery and has supported the record-low unemployment rate. We are providing further funding for successful programmes like Mana in Mahi, which provides significant support to people furthest from the labour market to upskill and enter employment.
We are also extending the Apprenticeship Boost initiative, supporting firms to keep early-stage apprentices employed and to bring on new apprentices, and strengthen the skilled workforces New Zealand needs to recover from the impacts of COVID-19. More than 190,000 Kiwis have been supported through our investments in trades training since the start of COVID, and 38,000 apprentices are expected to benefit from the extension of the Apprenticeship Boost through to the end of 2023.
Budget 2022 also sets aside $60 million to support progress on the continued design and implementation of the New Zealand Income Insurance Scheme. This scheme is being jointly designed with BusinessNZ and the Council of Trade Unions to better support New Zealanders who lose their jobs through no fault of their own. The scheme will better protect workers and incomes, and also increase the availability of skilled workers. It will help communities and industries during economic shocks and transitions, contributing to a more secure economy. There is considerable work to get the scheme up and running, and it is now expected to be operational in 2024.
Budget 2022 includes over $1 billion in investments to support better Māori health, education, and economic outcomes, as well as stronger cultural wellbeing. We are continuing to foster employment opportunities for Māori through the continuation of the cadetship programme and support for Māori entities delivering employment training through the Māori Trades and Training Fund. 
We're laying foundations to support Māori economic development, with $10 million for Te Ringa Hāpai Whenua Infrastructure Fund, which will enable owners to undertake economic, cultural, social, and environmental projects on their whenua. Our continued support for the progressive procurement programme, with an additional $26 million, will help to build capability for Māori businesses to effectively participate in public sector procurement processes and increase supplier diversity. 
Building capability and employment opportunities is also key to our investment in Pacific peoples, with $18 million for Pacific STEAM futures and $8 million for delivering employment and training services through Tupu Aotearoa. 
We remain committed to protecting and uplifting Māori and Pacific culture, knowledge, and history. Budget 2022 supports the growth and development of the Māori media sector and provides funding to protect mātauranga Māori and other taonga.
We are also following through on the commitment made to empower Pacific communities to tell their stories of the Dawn Raids, making progress towards reconciliation through community grants for multimedia projects, an online histories platform, and creating an official historical account.
As a Government, we are committed to taking substantial action to reduce child poverty and hardship in New Zealand beyond the 66,500 children already lifted out of poverty. While our targets are ambitious, the latest figures for 2020-21 are encouraging. They show rates on all nine income and material hardship measures in the Child Poverty Reduction Act are trending downwards, and we have achieved two out of three of our first three-year targets and made significant reductions against the third target. Through Budget 2022, we are continuing to support families through direct and indirect investments in child poverty and wellbeing. 
This Budget also has a strong focus on providing more equitable access to services and improving wellbeing outcomes for New Zealanders who live with disabilities. A $943 million package will enable disability system providers to meet demand, establish a new Ministry for Disabled People, and invest in the regional-based roll-out of the Enabling Good Lives approach to disability support services.
Budget 2022 also includes $1.5 billion of investment in public, transitional, and emergency housing as part of the Government's continuing efforts to address challenges to housing access and affordability. This adds to the 9,000 extra public housing places already delivered under this Government. This funding includes $1 billion for public and transitional housing, $355 million for changes to the emergency housing system, $75 million to progress the homelessness action plan, and $221 million for the affordable housing fund. 
Targeted support for first-home buyers through the Budget includes increases to the First Home Grant caps, which will help more Kiwi families get the security of homeownership as prices become more sustainable against a backdrop of record house-building in this country.
Budget 2022 continues to embed a wellbeing approach into the Budget process and the wider public finance system. The innovations introduced as part of Budget 2022 will allow us to better address complex, multi-generational challenges and facilitate longer-term investment. These changes include a multi-year funding cycle for health services and establishing the multi-year Climate Emergency Response Fund, as well as a pilot of two clusters of agencies in the justice and natural resources sectors. 
Key to all these innovations is a focus on driving delivery and value for money. The clusters help break down silos between agencies and also help Ministers to collectively make trade-offs across related areas. Three years of funding gives agencies the certainty to plan ahead, with a focus on achieving longer-term outcomes and managing cost fluctuations. 
Ministers and agencies have worked together to develop a funding package based on four priorities for a more effective overall justice system. Key justice cluster investments include: $46 million to develop a cross-sector model to guide future investment in services for victims, and increasing the uptake of financial grants under the Victim Assistance Scheme; and $190 million to maintain and strengthen legal aid to ensure access to justice for people who cannot afford a lawyer.
Budget 2022 also invests in solutions to prevent harm from crime in communities and improve the safety of our front-line workers. This includes $92 million of operating and $2 million capital funding for effective implementation of the Government's end-to-end strategy to prevent harm from serious and organised crime in New Zealand. 
Reforming the resource management system to deliver better outcomes for our natural and urban environments is a priority for this Government. It is a key focus of the natural resources cluster, with $179 million to support the successful implementation of these reforms. Other key natural resources investments include $118 million operating and $5 million capital funding for a permanent network of advisory services to support more sustainable and productive use of rural land, and $40 million total operating to progress industry transformation plans for our primary sectors, including fisheries, forestry, and the food and beverage sectors.
Budget 2022 comes at a time when the global economy is uncertain and volatile. Our response to that requires a careful balance. Faced with the current elevated levels of global inflation, some would have us pull back on supporting New Zealanders with the public services that they need. But that will not reduce the prices that Kiwis are facing at the pump or in the supermarket; it will only undermine the wellbeing and security of our people, and it is not an option I am prepared to consider. 
Instead, this Budget backs New Zealanders in shaping the new normal that is life with COVID. It builds on the collective hard work that has delivered a strong economic base to meet core needs across health, education, and housing, while also supporting climate action and investing in the skills, infrastructure, and industries we need to grow higher-paying jobs. We are providing support in the here and now for those facing cost of living pressures, while carefully managing our spending and keeping debt under control. This Budget represents a major step towards a future where we provide economic security to all New Zealanders while delivering higher-wage jobs that support a low-emissions economy.
Aotearoa New Zealand has navigated COVID better than almost any country in the world. We did that by putting our people first, by taking a wellbeing approach, and by targeting our support where it was needed the most. We will now take the success of that approach and build on that foundation to overcome the challenges we face and seize the opportunities for a secure future for all New Zealanders. 
I commend Budget 2022, A Secure Future, to the House.





BUDGET DEBATE
CHRISTOPHER LUXON (Leader of the Opposition): I move, That all the words after "That" be replaced with "this House, and the people of New Zealand, have lost confidence in this Government, because this Budget takes them backwards. Households are going backwards. The books are going backwards. Outcomes are going backwards. The country is going backwards."
Grant Robertson had one task in this Budget, and that was to ruthlessly focus everything in this Budget around overcoming the cost of living crisis and to stop New Zealanders going backwards. But it's clear that he's failed, because Grant Robertson has delivered the "backwards" Budget. Now, I have to say, we had a moment. We thought about calling it the "Budget blowout" Budget, then we thought maybe it's just the "band-aid" Budget, but we landed on the "backwards" Budget, because when you cut through all the words and you strip out all the spin and look at the facts of it, the sad news for New Zealanders is that Kiwis are going backwards, the books are going backwards, and the outcomes are going backwards.
Now, the sad part of this Budget is that the reality is that Kiwi families and Kiwi households are going backwards. They're being squeezed by this massive cost of living crisis. And I want New Zealanders to get really clear about where we are and what's happening with this cost of living crisis, because inflation is at a 30-year high. It's higher than most of our trading partners, despite what Jacinda Ardern and Grant Robertson will tell us, and it's actually getting a grip in this economy. 
Now, some people, like David Parker, are students of economic history, and if you go back to New Zealand in the early 1980s, we remember interest rates being at 20 percent and we remember double-digit inflation. You look around the world, and inflation destroys economies. And once it gets in, it's hard to get out, and it causes hurt and pain to people everywhere. We've got inflation now at just under 7 percent, we've got wage growth only at 3 percent, and that means all Kiwis are going back faster than they've been going in the last three decades. Mortgage costs are up because interest rates are up, rents are up $150, food prices are up the highest they've been in over a decade, and petrol is up over $3 a litre. And I can tell you, Kiwis up and down this country are feeling that pain. And this Budget will be putting Kiwis backwards into the future. 
The Budget forecasts that inflation isn't actually due to come down below 3 percent until 2025. And what that actually means is that this cost of living crisis is going to go on for longer and for some time, and Kiwis will keep going backwards. And rising inflation is going to mean that our mortgage rates and our interest rates are going to have to go higher for longer, and, sadly, there is more pain on the way for Kiwi households. And what we saw in this Budget was that the growth forecasts have been slashed. Growth in 2024 will be less than 1 percent, and only a few months ago, growth in 2024 was going to be 2 percent, and now it's been slashed, and unemployment is going to continue to rise, and by 2025, we expect it to be just under 5 percent. Kiwis are going backwards under Labour, and the Budget shows that it's going to continue.
Now, to Grant Robertson, my advice to you is quite simple: you need to get out more; you need to leave the Beehive, get out of the Wellington Central beltway, and go meet some real people up and down this country, because I can tell you—the Kiwis will tell you—they're going backwards and you're not listening to them. And every week, I get out of this place, and I go to maybe two or three towns across this country, and the message is clear: there is a big cost of living crisis, it is broad-based, it's affecting everyone, and it's impacting everything. 
But there was, basically, nothing in the Budget for the hard-working young couple who came up to me on ANZAC Day at Stockade Hill in Howick the other day. They were a teacher and a nurse, and they said to me, "Chris, we've got good jobs on average incomes, we're really good with our money, and we're trying really hard to save for a deposit for a house." But because of rising rents, because of the rising costs on everything, they can't get ahead, and they can't get that deposit together. And then they started to say to me, "We think there might be more opportunity for us if we move to Queensland." And I thought that is a tragedy that young people don't think that this is a country where there's opportunity for them and that they can get ahead. And they are what we call the squeezed middle, because the Government doesn't care about them. They earn too much to get formal Government help and support, but they don't earn enough to deal with the cost of living crisis, the rising mortgage payments, the rising rents, the rising food, and the rising petrol prices. 
So let me be really clear: the cost of living package that this Government announced in the Budget today is just a band-aid on a major wound—it's a band-aid. They deny that there was, in fact, even a cost of living crisis for a long period of time, and now they've added a temporary band-aid, which just runs out after three months. And I can tell you, what we just saw was inflation's going to be running at 3 percent right out to 2025, so Grant Robertson's big solution to the current cost of living crisis is a temporary payment to a small group of people. And I have to tell you: if you're earning $71,000 a year, you get nothing. 
And that means nobody on the average wage gets a cost of living payment, because these are the people that would have benefitted from income relief through a very good, sensible, logical plan—our plan, which was just say, "Take the current progressive tax system, and in fairness, why don't you just lift the tax thresholds up by the amount of inflation? And an average Kiwi household would have had $1,600 a year to fight this cost of living crisis that they're facing." But Grant Robertson said no." And why did he say, no? Because the dirty little secret is that inflation, while it destroys savings, it destroys people's purchasing power, and it gets into an economy. The dirty little secret is that inflation helps Grant Robertson. Why? Because he's collected $17 billion more in tax revenue because, as prices go up, taxes go up. And Grant Robertson, as we know, is utterly, totally addicted to spending, and that means that he won't let Kiwis keep a single cent of their own money, because he thinks he can spend it better than them. And on this side of the House, we know Kiwis with cash in their pockets will spend it and save it a lot better than Grant Robertson.
So, in the spirit of wanting to help Grant Robertson, I wanted him to think about—he could have adopted the National Party inflation fighting plan if he wanted to deal with the cost of living crisis. And what is that? It's (1) return the Reserve Bank to a single mandate to fight inflation; (2) remove the costs that you add to business, so we don't pass through higher prices that further drive inflation—get rid of the rental property taxes, get rid of the national awards, get rid of the national income insurance; (3) remove the bottlenecks that are stopping productive growth in our economy—why don't we wake up Kris Faafoi and get the immigration settings in this country set right?; (4) why don't we review all the existing and new spending? It's obvious that it hasn't happened with this Budget. We have an unprecedented amount of money being spent here; and (5) prioritise tax relief, as I just said, for those workers. It wasn't ideological; it was sensible, practical, common sense just to say, "Take the tax thresholds, index them to inflation, and give people a break." And what I want to say is anyone earning over $50,000 would be better off under National's proposed inflation-adjusted tax brackets compared to Labour's cost of living package.
Let me lay out the facts on why the books are going backwards, because it is very, very important that Kiwis register what has gone on here today because of the economic mismanagement and the lack of economic leadership from this Government. Kiwis up and down this country are tightening their belts at their kitchen tables. They are doing it. Grant Robertson should be doing exactly the same, but he's not. And what we have seen from this Government is a loss of a culture of financial discipline. We've seen a loss of targets. They don't care about every single dollar being spent as if it's their own, and they should because it's not their money; it's taxpayers' money. But I'm telling you, Grant Robertson has a problem, and his problem is that he is so deeply and utterly addicted to spending, and I want to say that the impact of his addiction on our fiscal books is incredibly clear, and when you think about it, he's damaging New Zealand's economy very strongly. This is—be under no doubt—a massive Budget blowout. 
This Government—and I want to just step it through—has increased Government spending since coming to power by 67 percent. You haven't seen a 67 percent improvement in outcomes or services. And, consequently, we're spending $127 billion this year in Government spending. That is unprecedented and that is $51 billion more this year than it was in 2017—$51 billion more. And now, let's just look at this year, because Grant Robertson said he would spend $6 billion in the biggest Budget spend-up in the history of New Zealand, and he's actually spending far, far more than that. And I want to take the House and the country through this because it's actually really important everybody understands what's going on, because he's trying to make out that he's fiscally prudent. And the reality is he's more addicted to spending than he's ever been before. There's the $6 billion he's already announced, and then you have to remember, earlier in the week, he spent $3 billion from the Climate Emergency Response Fund, earlier in the week—a lot on Labour projects and buzz words and strategies and plans and plans for plans.
But not to be done there, he's gone off and spent another $2 billion of new spending from the Budget next year. And then on top of that, he's added another $400 million from the Budget after that. That's called Budget 2024. And he's so desperate to spend up that he's actually robbed $2.5 billion from the next two years of Budgets. But it's even worse than that, because the cost of living payment is actually outside that new allowance. There is a massive Budget blowout and, when everyone thinks seriously about 2023—he's going to be spending a lot more next year, you just know it. Like someone who's addicted to spending, he can say all he likes about the future, but we just don't trust him, because when you're addicted to spending, you can't let it go, and we know he'll continue to do it in the coming years. 
So it's no surprise that the surplus is pushed out another year; it's no surprise that a $2 billion surplus has now evaporated, like a mirage, into a $2 billion deficit; and it's no surprise, when you think about the hyper-spending levels that we've now got more Government debt—it's nearly tripled; I mean, Government debt has tripled to $173 billion. And the problem with that is there's no modern monetary theorist—you actually have to pay the interest on the debt, and that bill is almost $5 billion a year, and that means that that is twice what we spend on our police force. So that means that Kiwis cannot get better public services as a result of that debt, because of his out-of-control spending addiction. 
Now, I want to say that the books are going backwards, and Kiwi households are going backwards, and the outcomes are going backwards, and the people of New Zealand see through this Government. I'm telling you now, they can see it is all spin, no delivery. They can see it is all talk, no action. Lots of activity but no achievement is what's going on here. Listen, I'm going to give you some advice, because the fundamental problem with this Government is that they conflate and they confuse spending announcements with actually getting things done and getting outcomes for New Zealanders, and they are two very different concepts. For you to spend money and to deliver outcomes, there's something in the middle called "implementation, execution, delivery". Those are the things you need to do. But if you haven't run anything, you don't know how to get things done, and that's exactly the story of all of this front bench: they don't know how to convert the spending into outcomes. And you can pick any topic you want—any portfolio you want—and you're going to see a consistent pattern: more spending, more bureaucrats, worse outcomes.
Let me give you an example; let's take Chris Hipkins and education because, without doubt, that's the most damning set of stats I've seen since I've come into politics, and to this place, 18 months ago. He spent $5 billion more, hired 1,400 more staff—staff earning $120,000 or more has tripled—and yet we have less kids attending school, and we have worse academic outcomes. What we've got from Chris Hipkins is more spending, more bureaucrats, and worse outcomes. 
Let's look at Megan Woods and housing, because, if you remember something called KiwiBuild—remember KiwiBuild?—we don't talk about it anymore, but the flagship KiwiBuild; only delivering 1.3 percent of the promised 100,000 houses. But, even if we put that aside, just think about the four outcomes you actually have to deliver in housing: house prices are up $400,000; rents are up $150; there's a quadrupling—a fourfold increase—of people wanting a State house; and, sadly, this morning, 4,500 kids woke up in a motel in emergency accommodation. So what I've got to say is that from Megan Woods, we've seen more spending, more bureaucrats, and worse outcomes. 
Let's talk about Kris Faafoi, because he's probably going to wake up now. He spent an extra $150 million. He's hired another 500 people and, on every single visa processing, the wait time has got even longer. What is that? More spending, more bureaucrats, worse outcomes. 
I want to talk about Kelvin Davis just quickly, because we should talk about Kelvin and Corrections. He spent $139 million. He increased the back office staff of Corrections by 50 percent, and then those prisoners that desperately need alcohol and drug rehabilitation services dropped from just over 6,000 down to 1,000. More spending, more bureaucrats, worse outcomes. 
I really want to talk about Michael Wood and transport—that's the one I really want to get to, because who would have thought that an $800 million bike bridge across the Waitematā was a killer idea? Brilliant idea. And then you go and spend $55 million on consultants looking at it, and then we're still hiring an empty office building on Auckland's waterfront to run a cancelled project for $600,000. He's tripled the communications staff, we've had a tenfold increase in those that are paid over $100,000, and even then they still can't communicate why you need two props of zeroes for $10,000. I mean, you honestly can't make this stuff up, and I could go through every single portfolio and the story's the same: more spending, more bureaucrats, worse outcomes. They don't know how to get things done. 
I just want you to take yourselves back two weeks ago because, two weeks ago, Andrew Little came to this House and he stood up and he realised he had a problem with wait-lists on health. And he had a cunning idea, I thought, you know, because the reality is this: there's been a fifteenfold increase in people waiting more than four months for their first specialist appointment, and that was from when they came to power before COVID in February 2020, and it's only got worse since then. Anyway, so Andrew Little came to the House and he said, "Look, I can't just go and create another working group, because that's what we used to do. We spent nine years in Opposition, we had no ideas, we arrived in Government on day one and we formed 230-plus working groups." Now, we lost count of them but that's what they did. So he didn't just create a working group; he thought about it a bit more and he created what we call a "task force"—that was task force. And the great thing about a task force—this wasn't just a normal task force, or a bog-standard task force; no, this was a "high-powered task force", OK. [Cheers from Opposition members] 
Yes, and I've been thinking about it because, as I look here and I look across the other side, what you see is people who are tired and struggling to get things done in this Government. And New Zealanders are looking at this Government, and they can see they're tired and struggling to get things done. I've been thinking about how I can help and how we can help, and I think what this Government needs is a high-powered task force. Here's the idea for you: what I want to suggest to you is you could employ a high-powered task force called "the National Party" to actually go off and take over and run this Government and get outcomes for the New Zealand people. And I can tell you, the National Party is ready. We are able and we are willing to step up and deliver for the New Zealand people—and the New Zealand people, they trust us, because they know we'll have an economic plan. They know that we can provide the economic leadership that this country so desperately needs. The bottom line is that we have to kick-start and enlarge this economic engine in this country of ours. And, on this side of the House, we know strong economic management, a strong economy, is actually how we lift prosperity for people. We know that a strong economy is actually how you lift wages; how people get ahead. It's actually how you get a world-class healthcare system. A strong economy is how you improve education, a strong economy is how you have a police force that can keep communities safe, and a strong economy is what enables us to protect our environment. A strong economy is how you get Kiwis ahead, and that is what a National Party Government will deliver. 
You might remember but, years ago, Grant Robertson used to talk about an economic concept called "productivity", and he was actually on to something, but he's actually given up talking about it now, because he's got this addiction to spending that's running his life and taking control of everything. And the biggest thing that we can do is we can lift incomes for Kiwis by improving the productivity of our economy and what that means, when you look at it, is you've got to get into the fundamental drivers of an economic plan, and that is about improving education, it's about a world-class infrastructure system that connects us to each other and to the world. It's about technology and capital and innovation. It's about making sure we have a pro-business environment, because we know the Government doesn't do things and get things done; it's businesses, the lifeblood of New Zealand, that get things done in this country. And we need connections with the world in order to sell our best products and services to the 7.8 billion people sitting in 195 other countries. That's how we back Kiwis to succeed, that's how we get higher wages and incomes, and that's how we give people more choice and freedom. 
In closing, let me say that New Zealanders deserve far more than this Government has delivered. Labour has taken so much in taxes, they've added so much debt, and they've spent so much money, but yet they have delivered so little in public services and outcomes. And this is indeed, sadly, the "backwards Budget". The books are going backwards, Kiwi households are going backwards, the outcomes are going backwards, and, sadly, the country's going backwards and we're heading in the wrong direction. New Zealanders deserve a Government focused on outcomes and getting things done, that listens and works with communities and businesses to do so, and we're going to do that in the National Party Government that we lead. We do live in the best country on planet Earth. I'm optimistic about New Zealand. I believe we can do so much better than this. I want us to be confident. I want us to be aspirational. I want us to be ambitious. I want us realising our maximum potential—economically, socially, and environmentally. And that's what New Zealanders can expect, and that's what they'll get with a National Government in 2023. Thank you. [Applause from Opposition members]
SPEAKER: If the members would like the amendment put, they will sit down. The question is that the amendment be agreed to.





Rt Hon JACINDA ARDERN (Prime Minister) (remote): It is a pleasure to speak to this Budget, the fifth we've had the privilege of delivering, and in no less extraordinary circumstances. The business and cycle of Government is, in some ways, no different to life itself: navigating difficult times while also making necessary progress, dealing with the unexpected, and always—always—planning for the future; challenges not least of which include a one-in-100-year health crisis, followed by the biggest economic shocks since the Great Depression. And just as the world was recovering, it's been plunged into the uncertainty of war.
Giving people as much certainty and security as possible in uncertain and insecure times is hard, but it's what we must pursue, and that is what we have set out to do in Budget 2022: deal with the immediacy of the economic and health challenges Kiwis are facing, while also looking to the challenges of tomorrow, and seeking to buffer our people from both. It's an approach that, as always, is focused on people.
Today, we deliver our fourth wellbeing Budget. Now, my virtual presence in the debating chamber is, obviously, not my preference on such a significant day. It means, for instance, that I'm not able to pay tribute to the Minister of Finance, Deputy Prime Minister Grant Robertson, in person. New Zealand has navigated some incredibly difficult times in recent years. It was only two years ago, for instance, that the Minister of Finance created the COVID Response and Recovery Fund, and delivered a jobs Budget that included investments in business support, infrastructure, and trades training. It protected half of all workers in New Zealand. It delivered a record amount of new apprentices. It enabled us, in spite of a pandemic, to deliver our nine-thousandth additional public housing place, an economy bigger than even before COVID, and the lowest unemployment rate on record.
Now, these results weren't a given. When COVID first emerged, we faced sobering forecasts. Treasury predicted 10 percent of people would be unemployed. That would have meant hundreds of thousands of people looking for work, and the financial scarring that would bring. Now, today's statistics speak for themselves, numbers that it is clear the Leader of the Opposition has not read. Our growth rates are higher than pre-COVID, and, in this Budget, forecast to reach 4.2 percent over the next financial year. Now, compare that to the aftermath of the global financial crisis (GFC), where rates were less than half that, at around 2 percent. Debt sits at 16.9 percent, and it's forecast to reach 15 percent in 2026. We've had a bigger economic knock from the pandemic but managed with a smaller debt impact than the GFC. We will return to surplus in the 2024-25 financial year, a total of five years after COVID hit; compare that to the GFC, where it took six.
Finally, unemployment sits at 3.2 percent and is forecast to reach as low as 3 percent. Māori unemployment sits at 6.3 percent and Pacific at 6.7 percent. And while we have work to do, compare those figures to the GFC, where for our Māori and Pacific families, it was more than double those rates. Now, that is not to say that times aren't tough for many New Zealanders right now—they are, and not just here but around the world—but in the midst of a crisis, in the midst of such tough economic times globally, we are well placed to recover, with one of the best economies in the world. And while there are many reasons for that, Grant Robertson is one of them, and for that, I thank him.
It was Labour who got us through COVID, and it is a Labour Government who will get us through the next set of challenges as well, and that is what this Budget is all about: addressing the challenges of today but also of tomorrow. Now, when it comes to today, there is no more universal challenge right now than the cost of living: globally, we know that we're not alone, as inflation pushes up prices around the world. The average rate of inflation in the EU is 7.7 percent. It's high in Canada, in Germany. Just yesterday, the UK hit 9 percent; in the Netherlands, it's nearly 10 percent. And while there are many reasons for it, one thing that forecasters are predicting is that it will improve in the latter half of 2022. But that doesn't help Kiwis now, and while we can't control global inflation forces, our job is to take the hard edges off it for Kiwis, and that is why this Budget includes a cost of living package to cushion the impact for middle and low income families. Now, we've had to be incredibly careful in developing this package, to make sure it reached those who needed it most. Anything too broad could make inflation worse, and that's exactly what the National Party's tax cuts to the wealthiest would do. They would feed inflation while giving the biggest benefit to those who need it the least.
We also needed to make sure that our response was sustainable, and that it eased pressure on families who are also keeping up the investment in their healthcare system and in their education system. After all, no one would thank us for short-term relief that came at the expense of long-term services that Kiwis rely on. And we also wanted to make sure that what we did was timely. The result is the cost of living package we've delivered today. First, it continues the reduction of the cost of fuel at the pump by 25c a litre through till August. The war in Ukraine is continuing to make prices volatile, and this is some certainty that we can provide in the meantime for everyone.
Secondly, in August, a short-term and targeted cost of living payment kicks in, helping to transition from the excise reduction. It will be paid to middle and low income earners over the age of 18—everyone who earns up to $70,000 who isn't already getting the winter energy payment. It means those who are doing the vital but unpaid work of caring, such as stay-at-home parents, will be eligible for the payment, which will be paid monthly for three months and equates to an extra $27 a week or $350. In total, it will ease the pressure for more than 2 million people, and means that 81 percent of New Zealanders aged 18 and over will either be receiving the winter energy payment or the temporary cost of living payment this year.
Now, no temporary fast relief can be perfect, but it can make a difference. Thirdly, half-price fares for public transport will remain through August, and then a new change kicks in: all community services card holders will continue to be able to travel for half-price, permanently. This change will not just last through the current inflation spike but for good, because we believe subsidised public transport makes a difference for people and the planet.
Fourthly, as part of our urgent Budget night legislation, we begin the process of addressing the root causes of high prices in our grocery sector. We have a lack of competition in this country, and it is impacting food prices and it's impacting families. While there is much to do following the Commerce Commission report, we are starting today with unravelling some of the tactics to block competitors—that, I can assure you, is just the start.
Finally, today, we right a longstanding wrong that hits those who can least afford it when the cost of living spikes. For those on Government support, we are finally dealing with the issue of child support pass-on. Many people may not know this, but in New Zealand, those who are on Government support do not receive the child support payments made by an ex-partner, spouse, or parent. Whatever payments are made are retained by the State. That is unfair on a child and also lessens the incentive for a parent to pay. Budget 2022 changes this. It means our kids—those with a parent often on the lowest of incomes—will get extra support not from the Government but from their parent, and it will lift up to an extra 14,000 children out of poverty.
While in this Budget, the forecasts show that cost of living pressures are set to subside, there is no question that while they are here, it hurts. We've done what is possible to blunt the hard edges while ensuring we don't pour more fuel on the inflation fire. It's a position other countries we compare ourselves to are taking as well, and that's one of the reasons I would hope the Opposition would support the package we have presented today. In fact, I call on them to do so, because in the Leader of the Opposition's speech, I hear not one other idea—not one. Now, I know that they're opposed to the 1 April income changes we made to increase the family tax credit. They've spoken openly against subsidies for things like public transport, in the same way they have opposed just about any climate-related policy, even ones that ease the cost of living. They have a policy of giving $2 a week to those we have proposed giving closer to $30 a week. But if they are genuinely concerned about the cost of living and not just politics, surely they will support this package because it does more for people here and now, and it does not leave the tin empty when there are so many other challenges we must address. If it is that they would rather stick with their policy of tax cuts for the top-income earners, then we know for sure that they don't support the substantial health investments in this Budget—because you cannot do both.
That brings me to our health system. New Zealanders know how excellent it can be. I frequently receive letters from New Zealanders so grateful for the care they've received, but it is often supplemented with this: please do more to improve the system our health professionals work in.
Today, Budget 2022 provides the largest ever investment in our health system: $11.1 billion more for nurses, more medicines, and to end the postcode lottery to ensure that Health New Zealand and the Māori Health Authority are able to make the changes needed to deliver better health services to all New Zealanders, whether they live in Tairāwhiti, Buller, Whāngarei, Masterton, or Dunedin. And, yes, we have given health certainty about their future budgets to help them plan—something I see the Leader of the Opposition has taken issue with, once again showing he's more of a short-haul than a long-haul kind of guy; or, perhaps more accurately, if you live the regions, no haul.
In this Budget, we're also making the largest ever single contribution to Pharmac's medicines budget, bringing total funding to $1.2 billion, up 43 percent since we took office. I'm going to say that again: Pharmac funding is up 43 percent since we took office.
Our lifesaving ambulance services: supported to recruit an extra 248 more paramedics and front-line staff, and 48 more ambulances as well as chopper replacements.
We know that COVID has left scars on the mental health of many New Zealanders. So $202 million has been allocated to further improve access to mental health and addiction services, particularly for those with acute needs. And we are continuing to invest in two programmes that support young people's mental health: Mana Ake, which provides mental wellbeing support for primary and intermediate school-aged students; and Piki, a pilot scheme which provides integrated mental health and addiction support for young people. And I acknowledge the Green Party's support for these programmes.
But I want to make mention of one of the smaller initiatives in the health budget: $7 million for more portable retinal cameras to check the eyes of premature babies to address one of the leading causes of blindness in children.
A third of Budget 2022 investments go to health. In the wake of a health crisis, we know how important our health system and the health of our people is. This investment speaks clearly of the priorities of the Government: the importance of the wellbeing of our people, and the vital services they deserve. We are nothing without our health. And there can be no greater response to the COVID pandemic than ensuring we have better funded and stronger health services—and that is what this Budget delivers.
We know there are a myriad of other challenges we face. While in Opposition, I remember once speaking to a social worker, who had been in the job for 30 years, about what we could do as a nation to change the sometimes intergenerational issues children face. Without hesitation, her response was one word: education. 
Now, no one wants to oversimplify what past Children's Commissioner Russell Wills called wicked problems. And while there are many contributing factors to complex societal issues, we need to look at both prevention and the cure. Yes, we must support the police to bring a stop to violent behaviour and for there to be consequences for those who victimise others, but we must also support our young people on to alternate paths. That's why we've put not just half a billion dollars into law and order initiatives to deliver the largest police force ever, we're also a Government committed to delivering quality education, training, and skills development so that all New Zealanders get the opportunities they need and deserve to live lives of value.
Budget 2022 invests $2 billion in operating funding, and $855 million in capital for the education system. The new Equity Index relegates the decile system to the past. We take the largest step forward yet towards pay parity for our early learning teachers. We're supporting Māori-medium education and kaupapa Māori sector. And beyond this, skills and training is a further area where we invested throughout the COVID pandemic to ensure that we retained and built a workforce for tomorrow as our economic recovery took off. We have the lowest unemployment rate on record, and so we need to reach into every corner to grow our domestic workforce. Successful programmes, like Mana in Mahi, which provide significant support to people furthest from the labour market to upskill and enter employment, receive continued investment in this Budget. We've also extended the Apprenticeship Boost.
Just last week, I received this letter in response to that pre-Budget announcement. Perhaps the Opposition member for finance for the National Party received it as well. "Thank you for extending the trades apprenticeship funding. We are so happy at the stability and certainty this will give to my children's futures as they progress through the recently started mechanics and auto-electrical programmes. We all believed this programme would be cancelled from this August, and so we're so excited about what this would mean. I come from an intergenerational depravity, which is extremely difficult and severely restricts our lives daily. Witnessing my kids begin on an actual qualification pathway has been a life-changing and a very positive experience for me."
More than 190,000 Kiwis have been supported through our investment in trades training since the start of COVID, with tens of thousands more supported today—all necessary as we continue, for instance, the considerable agenda we have on housing, which continues in this Budget.
Now, that brings me to our partnership with business—so what I learnt the Opposition considers to be "corporate welfare". Small and medium businesses contribute 30 percent to our GDP. Many are poised to grow and have the potential to accelerate our economic growth, which is why Budget 2022 invests in a new Business Growth Fund—$100 million over the coming year. But Crown investment is a minority shareholder, alongside New Zealand's major banks, ensuring easier access to upfront finance and the quicker production of more jobs. It works overseas—in the UK, Ireland, Canada, Australia—and we've been told it fills a much-needed gap here.
Finally, we said that this Budget was focused on the challenges of tomorrow. No challenge is more present today and in the future than that of climate change. Where many choose to dwell on what can't be done, we choose to move on what is not only possible but also the greatest opportunity in our history to move to a high-wage, low-emission economy that provides security in good times and bad.
We're delivering in an emissions reduction plan that puts us on track to meet our carbon budget. I acknowledge the Minister for Climate Response, James Shaw, for the work that he's done alongside us in Government to release that plan this week—which includes the biggest investment in climate action ever, paid for through recycling the emissions trading scheme payments on pollution. This $2.9 billion investment is the most comprehensive plan New Zealand has ever had on the issue of climate change. It's because we cannot responsibly postpone a transition we need to start making today—one where every sector of society and the economy is considered part of the solution, where we have warmer, drier, more energy-efficient homes, more native climate sinks, energy production that doesn't require fossil fuels, an upskilled workforce, and the most sustainable food production in the world.
When our future generations look back, I want them to see that we tackled climate change in the way we tackle all other crises: with people and the security of their future at the centre of our decision making, because, ultimately, for Governments, as with life, we will always face challenges—it's not just how we manage a country through a crisis; it's how you manage the country out of one as well. New Zealand navigated COVID, for two years, better than most because we put people first. That is an approach that Budget 2022 builds upon, tackling the issues we face today while also seizing the opportunities for a secure future for all New Zealanders, because we must do both and, with this Budget, we are.





Hon JAMES SHAW (Co-Leader—Green): E te Māngai o te Whare, tēnā koe. Well, the Leader of the Opposition delivered a speech that wasn't so much 2022 as 1992. They reckon that they can help out New Zealand's lowest-income families by giving our highest-income earners a tax break. Ruth Richardson called and she wants her speech notes back. The National Party might be dressed up in a nice new sheepskin kimono, but you open it up and it's the same old wolf underneath.
When they finally get up to speak, I have to say that the ACT Party, no doubt, will continue their call for a robust and sober and rational debate about governance in this country, right after they yesterday issued a press release that called for a senior public servant to be beheaded. Maximilien Robespierre called and he wants back his guillotine. It is becoming clearer by the day that the reason Mr Seymour worked so hard in the last term to dispatch Winston Peters was so that this term he could become Winston Peters. So I guess there's only room in this town for one alt-right populist.
Can you imagine what this warmed-over Richardson-Robespierre, all-you-can-eat duo would do to this country if they actually got back into power? It has taken at least 4½ years to even start to turn around the legacy left over from the last time they were in Government. 
I have to say we do have a long journey in front of us, but Aotearoa is at last heading towards a future that is fairer, cleaner, and more prosperous, and all within the limits of our fragile planet. That is the vision that the Green Party was founded on some 30 years ago, a vision of thriving communities where everybody has the means the live in a warm, dry home; food that is healthy for us and healthy for the land that it is grown on; vibrant, flourishing ecosystems that underpin the kind of healthy environment that we all rely on; clean and healthy and swimmable rivers; new jobs and prosperity for our communities; and a sustainable, low-carbon economy. With a strong Green voice in Government today, more people up and down Aotearoa New Zealand can now make ends meet. Our communities are safer, they are cleaner, they are greener, and we are healing nature. 
The Green Party is committed to progress, even when we have to fight for it inch by inch, and so we will be voting in support of Budget 2022. 
In recent years, as we have battled a pandemic, there has been more than one Budget that has attracted the moniker "historic", but I do want to say that despite that fact, Budget 2022 is a Budget of firsts. It is the first Budget ever to put climate action at its heart. It is the first Budget ever to fund a national family violence and sexual violence strategy. There is a lot to celebrate in this Budget. I also want to acknowledge that there is still so much more that needs doing for people and for planet.
This Budget continues to deliver on the foundations that Green Party Ministers laid last term, and I want to acknowledge again the work that they did then. It does also make some very important progress to support some of the Green Party campaign priorities of the last election campaign. 
But if the Green Party had, say, 65 members of Parliament and we were writing this Budget ourselves, a number of things would happen. Mike Hosking's head would explode. The country would be a lot better off, and not just because Mike Hosking's head had exploded but also because this Budget would look different. A Green Budget would have done more to help the thousands of families who are struggling to make ends meet and towards that most basic of human rights—a roof over our heads. A Green Budget would have done more to halt the degradation of our wild spaces and the harrowing decline of our taonga species. The Budget report, I have to say, shows that there has been no significant improvement in child poverty statistics. A Green Budget would have done more to eliminate the scourge of child poverty in Aotearoa New Zealand.
I remember sitting in this House five years ago to watch Steven Joyce deliver the 2017 Budget. In a 40-minute speech, Steven Joyce did not mention climate change once—not once—but things have changed. Our Government over the last 4½ years has seen more action than in the previous three decades combined. We have passed the zero carbon Act, enshrining the 1.5 degrees Celsius goal in primary legislation. We've reformed the emissions trading scheme to ensure that polluters pay the real price of the emissions that they put into the atmosphere and we've put the proceeds from that reform towards establishing the $4.5 billion Climate Emergency Response Fund, and we have published a comprehensive plan to cut emissions right across the economy. This Budget is a landmark in our journey to continue that work and to build a clean and green and climate-friendly future.
Through this Budget we will decarbonise industry, with $678 million of funding for smaller businesses, commercial heating decarbonisation, and energy-efficient equipment. We will establish native forests at scale to develop long-term carbon sinks and to improve biodiversity, with $65 million. We're going to reduce and divert organic waste away from landfill and reduce emissions from waste overall, with $103 million. We're going to give people more transport options and achieve significant mode shift to active transport and to public transport, with $375 million of funding. 
All of this investment makes this the first real climate Budget, but it must not be the last. This climate Budget is a huge step, and I do want to take a moment to celebrate that, but tomorrow it is back to the work of turning around decades of inaction on climate.
Another Minister, of course, is also starting to turn around an immensely challenging problem. The Minister I'm talking about, of course, is my co-leader, the Hon Marama Davidson. Marama continues to work tirelessly on the pernicious problem of family violence and sexual violence, a problem that requires bringing together many different Government departments and community organisations. Last year, Marama delivered Aotearoa New Zealand's first ever national strategy and action plan to eliminate family violence and sexual violence: Te Aorerekura. That work built on the foundations laid by Jan Logie in our first term in Government, as well as Marama's own deep experience working in and alongside vulnerable communities and tangata whenua.
Now, I've said it before and I'll say it again, but Te Aorerekura is nothing short of a landmark in New Zealand's social history. This Government inherited an underfunded, largely ignored sector broken up into many groups that didn't have a clear understanding of their roles let alone a national strategy. Thanks to Marama, that is now in place, and Budget 2022 has provided the funding to deliver on it: $114.5 million over four years to prevent and respond to family violence and sexual violence across Aotearoa. With that funding, we will address the drivers of harm and will enhance protective factors and shift community and social norms that condone violence with $38 million, we'll strengthen the existing integrated community-led response approach with another $38 million, we'll develop workforce and organisational capability frameworks for the sexual violence centre and fund the implementation of new family violence frameworks and tools with $7 million, and so much more.
I cannot overstate the importance of this work. Everybody has the right to live in a peaceful home, to be respected, and to be safe from the mistreatment and violence that has been a shame on this country's history. We must have a future where children and families and whānau can thrive, knowing that their homes are safe, and the initiatives in this Budget are crucial to getting there.
Our cooperation agreement with the Labour Party has delivered significant investments in people and in planet in today's Budget. Last term, we helped to turn around decades of underfunding for conservation, which had seen the health of our forests, the rivers, and the birds in decline. There is a long way to go yet, but we do welcome today's commitments to fund new work to protect our forests from the damage that's caused by wild deer and goats; renewed investments in Tiakina Ngā Manu to protect our taonga species; and investment in huts and tracks so that more people can have the opportunity to spend time and enjoy nature by walking or tramping or hunting or fishing or mountain biking. 
Department of Conservation (DOC) rangers and other staff are on the front line of protecting nature, and we do welcome the Government's commitment to increase their incomes and to maintain staff housing in really remote areas whilst also upgrading the DOC vehicle fleet to low-emission and electric vehicles.
On Budget day, I do think it's important to highlight some of the relatively modest amounts of investment that actually will make an immeasurably large difference to people's lives but that tend to get overlooked with all of the big headline initiatives that get announced. Budget 2022 delivers funding for eating disorder support services that will improve the lives of hundreds of young people and their families. I would like to acknowledge the Hon Dr Ayesha Verrall for her collaborative work with the Green Party on this often unseen but deeply felt crisis in our communities. We welcome the continuation of Piki, the youth mental health programme that was begun in the last term, and also the expansion of Mana Ake to five more areas of Aotearoa.
For our rangatahi and their whānau, we welcome the expansion of child and youth mental health and addiction services for an additional 1,300 people. The Opposition makes a lot of noise about being tough on drugs, but it is precisely that hollow rhetoric that has seen drug harm explode over the past 40 years. The Green Party has always fought for evidence and compassion in drug policy, and the approaches and the investments that genuinely build resilience and healing. These are important initiatives in the cooperation agreement between Labour and the Greens.
The Budget also delivers on areas that the Greens have long campaigned for which are not covered by our cooperation agreement with Labour. For example, we welcome the affordable housing fund, that will provide support for not-for-profit rental providers and we do applaud the huge commitment to give Pharmac the funding that it needs to make more lifesaving medicines available to more New Zealanders who need them. 
I just want to take a moment to acknowledge the people who have been campaigning for these investments for many, many years. That is a strength of the Green movement: tireless work to put a political issue on the map, to raise public support, and to put forward positions and solutions that Governments adopt. So we are very happy for any Government to copy our homework.
For decades, we have known that the health sector has been underfunded. So today's announcement is obviously a very good start at turning this around, and, together with the pae ora reforms, that will help to ensure that everyone gets the healthcare that they need, regardless of where they live. 
I particularly want to welcome the funding announced for the Māori Health Authority, because the Green Party campaigned at the last election for an independent Māori health authority, and we're delighted that has not only been set up in legislation but funded in today's Budget. We do need to see this, though, paired with a genuine commitment to partnership, to Māori-led approaches to determining how primary healthcare is funded and provided to Māori communities—particularly those in rural areas, who have missed out for so long. 
We know that good health outcomes will only be possible when we fully address the social drivers of physical and mental health problems, including poverty and inadequate housing. So we will continue to work towards a future where everybody is supported in their wellbeing at all stages of life—that is health policy. We will continue to push for better wages for our essential healthcare workers—that is health policy. We will continue to push the Government to go further than today's announcement and to commit funding for pay equity across the whole sector, including for the lowest-paid staff who do essential work in related areas, like aged care—that is health policy.
Many families around Aotearoa on low incomes are struggling to manage rising costs and other pressures. Budget 2022 contains an array of measures to ease those difficulties. I am very pleased to see more examples of making people's lives better and, at the same time, reducing emissions and taking care of our planet—so, for example, we particularly welcome the $73 million to expand and improve Warmer Kiwi Homes. This will mean more families will have access to warm and dry and safe homes, at the same time making those homes more energy-efficient and climate-friendly. 
We welcome the commitment to half-price bus and train fares for low-income households. This is work that was begun when there was a Green associate transport Minister. We welcome the extension to half-price public transport—but also wouldn't it be better to make public transport free for everyone, for all time, for good? The funding that's announced today will help something like a million people to ditch the car and to switch to cheaper public transport, and, at the same time, that will help to cut emissions in such a critical sector.
We have an abundance of renewable energy sources. We do welcome funding that will help to enable low-income communities to access cleaner and more affordable and more secure energy supply. 
So this is a welcome step forward, and, at the same time, the Green Party is firmly of the view that the next way to lifting living standards is to lift incomes and to make sure that families actually have enough money in the first place. That means fair wages and higher benefits. 
There is a quiet revolution in this Budget in the form of a new fiscal strategy. For too long, there has been huge political pressure on an arbitrary debt-to-GDP ratio, but we carried the debt in other ways. We have a housing deficit, we have a transport deficit, we have a deficit of three waters infrastructure, we have an environmental deficit, and we have a social deficit. The new approach that's been announced by the Minister of Finance will now mean that arbitrary debt restrictions will not stop good fiscal infrastructure projects that stack up on all other metrics, such as cutting climate pollution. 
Now, we have never shied away from the need for a fundamental shift in our economic thinking—a shift that means putting a focus on the wellbeing of our people and the limits of our planet above the pockets of property speculators. The way that we need to fund our public services in this new fiscal strategy is by broadening our tax base, and it just so happens that there is a massive gap in our tax system where those who earn a salary pay their fair share of tax, but those that own vast amounts of wealth do not. A wealth tax would provide the revenue necessary to increase important, necessary operating expenditure, it would plug a hole in our tax system, and it would mean that the wealthiest New Zealanders would pay their fair share of tax. It would also make David Seymour's head explode, and that's an added bonus.
The Green Party has always had a clear, progressive voice in this House, a voice that says that we should tax wealth fairly, don't just be happy to sit by while many of the wealthiest have a lower tax rate than middle and low income earners. It is a voice that says that the environment and the economy are intertwined, and only with a healthy planet will we have healthy communities. So this is a Budget of firsts. 
But to solve climate change and to address inequality and also our biodiversity crisis, we need the next Budget to break new ground, and the one after that and the one after that. The status quo will not work. We can do better—we can do so much better. So we do look forward to a series of bold, progressive Budgets. We look forward to a future where everybody lives in dignity, comfortably within the limits of our planet. Nō reira, tēnā koutou, tēnā koutou, tēnā tātou katoa. 





DAVID SEYMOUR (Leader—ACT): Thank you very much, Mr Speaker. I heard Grant Robertson and I thought that Grant Robertson had one shot, one opportunity, to make sure this Budget did not go down in history as the brain drain Budget. What he had to do was give relief from the cost of living crisis, light at the end of the tunnel, and hope to those people who get their money from doing something called working. Unfortunately, he did no such thing. 
What Grant Robertson basically said was "I will continue to satisfy my insatiable appetite for Government spending, I'm going to put on welfare, kind of, for three months at the end of the year, and I'm going to extend your cheap train fares for another couple of months." That's it—that's it. There's no hope or light at the end of the tunnel for New Zealanders with get up and go, more and more of whom, you can understand, after today's effort will be thinking "Maybe it's time I got up and left.", because this Government and, increasingly—while this Government's in control—this country does not give hope and opportunity or light at the end of the tunnel in the cost of living crisis to people getting squeezed from every angle.
What's interesting is the Minister of Finance, Grant Robertson, called this securing the future. Do you know what's interesting? It's that that's not even original. In fact, he copied it from the Saskatchewan Party's 2007 election campaign, and the difference is that the Sask. Party got elected that year. They cut taxes, and they stopped the province of Saskatchewan's brain drain. They saw the stubble-jumper province grow in population for the first time in decades. 
Well, there's no such relief in this Budget. This Budget won't be remembered for securing the future, unless it's Australia's future. This Budget will be known as the brain drain Budget, because all those people who rely on working see no hope in it; in fact, there's no hope in this Budget from Labour unless you act like a no-hoper. This is the culture of victimhood that the Labour Party imbues through our whole country. That is why people will leave. That is why we need a Government and a Budget that are prepared to make things better and give people hope that it's worth staying in this country.
We've heard a lot about a cost of living crisis and the squeezed middle, but what does that actually mean? Well, it could mean a family with one earner who is at the average wage for a full-time worker—about $70,000—and another earner who works part-time and earns $30,000. Together, that couple earns $100,000 and they pay $18,290 in income tax, and that's not including GST. If they're renting and they pay the median rent, then their rent's gone up $70 a week, or $3,640 a year, in just the last two years. If they own a home, and they have, say, a half-million-dollar mortgage—which would be nice, my fellow Aucklanders would say—then they'll be paying $12,500 more in mortgage interest than they were two years ago. 
If they used to spend $300 a week on the weekly shop, then it's gone up $20 in the last year. It's hard to believe, but that's 6.4 percent inflation in food costs in the last year. It's gone up 40 bucks a week on the weekly shop just in the last four years. If they are really bad people—meaning that they use a car to get around—then they have found that the cost of filling up has gone up by around $1,700 a year if they each have a car and put in 50 litres a fortnight.
Those people are paying more tax than ever, because remember the GST? Well, if inflation is a thief in their wallet, then the Government is a silent partner, because every time the prices go up because of inflation, "Greedy, Grabby Grant" is there for an extra 15 percent, which he calls GST, and the squeezed middle call the rising cost of everything, squeezing them from every angle. 
What hope has Labour given them in this Budget? Has Labour given them a sign, or even just a little flicker of light at the end of that cost of living crisis tunnel? No, they have not. 
In fact, I was very interested to read some of the numbers in the back of the big Budget documents, and what I found in those numbers was gravely concerning, because, you see, Treasury makes a forecast for the future of this country's economic and fiscal outlook, and they make that forecast every six months—someone called Ruth was responsible for that happening—and the thing is that the forecasts we have for New Zealand's future today released at 2 p.m. this afternoon are vastly worse than the same forecasts Treasury made in December. In December, they said that inflation was going to peak. They said that by next year, inflation will only be 3.1 percent. Well, they're now saying that next year's inflation is going to be 5.2 percent. 
So if people thought that there's a light at the end of the tunnel for this cost of living crisis, well, when "Grabby Grant" satisfies his insatiable attitude for spending taxpayers' money, what happens is that it drives inflation, and that's why even Treasury is forecasting that inflation is going to increase more than we have ever forecast. It's going to be 5.2 percent next year. We're not even halfway through this cost of living crisis.
The funny thing is that when I said this was going to be a brain drain Budget, even I didn't guess that Treasury would update its forecast to show that there'll be less people in New Zealand. Treasury is now assuming that 15,000 more people are going to leave than they had assumed in December. Even Treasury is predicting a brain drain, and why wouldn't they? Well, because their forecast for our net debt just as a Government is now $15 billion higher than it was only six months ago. This is just the change of forecast in six months. It's now going to peak at $15 billion, and that's because we're spending more. The thing is they're now forecasting that we're going to be in deficit until 2025 instead of 2024. 
One of the effects of that borrowing is that interest rates are also rising, and we're going to spend an extra $1.7 billion a year on interest on Government debt than they thought we would in December. Even in just six months of forecasting, Treasury now thinks our outlooks are worse. We're going to have more debt, more interest on the debt, more inflation, and a longer cost of living crisis. So if people were looking for hope from this Government, not only has the Government failed to take the bull by the horns and make things better; they have also witnessed this situation deteriorating because of their spending.
This Budget could have been so much better. In fact, the ACT Party is one of two parties in this Parliament that has produced a fully costed Budget for New Zealand this year. There's the Labour Party, with Grant Robertson, and there's the ACT Party, and I would say to you that this one would give a much better future for New Zealand, where people want to stay, because the risk is we become a place that's nice to visit but not so nice to live, especially if you need lifesaving drugs—and we'll get to that, too.
First and foremost, this Budget needed to kill inflation dead before we get inflation expectations built in and we go on a wage-price spiral leading to stagflation. That is now, unfortunately, a very real prospect. 
It's not often I agree with Adrian Orr, but Adrian Orr, the Reserve Bank Governor, says that monetary policy needs friends, and what does he mean by that? What Adrian Orr means by that is that if Grant Robertson doesn't stop spending in the way he has, then someone else is going to have to reel in expenditure for the country to stop inflation, and do you know who that will be? It'll be Adrian Orr, and do you know what tool he's got? He's got the official cash rate, and do you know what that does? It puts up your mortgage so that people have less money to spend, and he'll stop inflation that way. So either Grant brings in Government spending or Adrian brings in household spending, and it's the second one because Grant can't stop spending, so it's going to hurt.
Some people might think, "Well, it's a lucky thing I rent. I'm not going to be faced with rising mortgage rates." Well, I'm sorry to say that you just have to ask yourself who pays a landlord's mortgage if not the tenant? This spending will lead to higher interest rates, higher mortgage rates, and higher rents. It is inflationary for everybody. 
The second thing that it needed to do was give relief to all those families we've talked about that are battling away and wondering why they bother. There needs to be light at the end of that tunnel so that if you strive and do the right thing for yourself and your family, you're not going to be fodder for Labour fuelling its hand-out culture. 
The third thing it needed to do was secure the future—that was in my speech before Grant took it up—in order that we can have sustainable fiscal settings. That's why we need to be honest with ourselves about the age of superannuation: 65-year-olds are not decrepit, and we can afford to save $16 billion of taxpayer money by gradually, respectfully, increasing the age of national superannuation to 67 over 12 years, while allowing people to get their KiwiSaver at 65 if they would still like to. That's the kind of boldness and honesty this country needs right now; not just more spending and delusion.
Finally, and by far most importantly, what we needed to do in this Budget was to actually imbue a culture of striving and success. Here's how we would do that in our alternative budget. You know, Michael Cullen, who was the Minister of Finance a long time ago, and I acknowledge his recent passing—may he rest in peace. Michael Cullen had two tax rates when he became finance Minister: 19.5 percent and 33 percent—that was it. It was that simple. He also had a low-income rebate, giving relief only to those who really needed it. Since then, successive Labour and National Governments have made our tax system more complex, less effective, and less efficient. Now we have six tax rates: five personal income tax rates—10.5, 17.5, 30, 33, and 39 percent—and a company and trust tax rate of 28 percent. The funny thing is that we say to our kids, "If you want to get ahead, study hard, work hard, save, and invest carefully, you'll be rewarded.", and then in the tax code we say, "We've got six different tax rates so that for any level of effort, we'll be there to take a little bit more off you." Talk about mixed messages—a labyrinth of punishment in a Byzantine tax code.
Then some people say, "Oh, that's all fine. Just adjust the tax brackets for inflation." Well, ACT says that we need to put the values of aspiration that other parties say they believe in into our tax system to make it fairer, simpler, and more competitive. ACT's tax policy shows how we could get to just two rates: a top rate of 28 percent and a bottom rate of 17.5 percent, and that would allow us to do two things. First of all, we'd be able to stop inflation because we would be cutting expenditure by $6.8 billion, but, second of all, it means that people right throughout the income structure would get significant tax rates. You take the example of somebody earning $70,000—maybe a nurse, somewhere in the middle of their income stream, of their career, earning $70,000. They would keep $2,309 extra under ACT's tax policy to make up for the cost of living increases that they've dealt with under the first five years of "Hard Labour Government".
But there's other things that we'd do. Do you know that this country is one of the hardest places in the world for foreigners to send money? It's true. Myanmar, Saudi Arabia, China—those are the three countries that the OECD says make it harder to invest in as a foreigner. We wonder why it is that Israelis and Estonians—people that used to be much poorer than us—get twice as much investment per worker as we do, and we wonder why it is that those countries like the Czech Republic, Slovenia, and Lithuania are overtaking us. Well, it's partly because we just don't get investment capital. 
The ACT Party says it's time for New Zealand to be open for business and say that we're going to be the easiest place to invest if you are a member of the OECD. If you're a democratic country, then New Zealand is open for business for you, because we actually want our friends around the world to bring their skills and their money and their ideas to enrich our country. We don't want to be a xenophobic backwater conducting some sort of bizarre bicultural experiment. We want to be globally connected citizens with the best that the world has to offer. 
Here's the next thing we'd do. Do you know that this Government owns about $16 billion worth of State-owned enterprises (SOEs) like New Zealand Post, like KiwiRail, like Kiwibank, like AsureQuality. Some of them are or have the potential to be good businesses. Now, the evidence is crystal clear that when the Government sold half of Genesis, half of Meridian, and half of all of the energy companies, in fact, their performance improved so much that the Government actually got a bigger dividend from owning 51 percent of them than it did from owning 100 percent. The ACT Party says that we would partially privatise more SOEs in order that we can raise their productivity and—
Hon Member: Same old ACT—same old, same old. 
DAVID SEYMOUR: —reduce New Zealand's debt by $8 billion. I just ask people on the other side of the House: if you've got a policy that works, that keeps New Zealand control of the businesses, and that raises productivity and pays down debt, why would somebody be against that, other than pure ideology? Is this something we can afford not to do, or are we too rich already? 
We had a big opportunity today for a Government to stand up and overcome its ideological opposition to cutting taxes, and then we had the opportunity to give people relief from the cost of living crisis. We had the opportunity to reduce wasteful and inflationary expenditure. That would have all been good, but we had the opportunity to do even more: to invest to actually secure the future. 
ACT's Budget would have invested strategically in three areas. We would have taken $250 million for principals to pay their best teachers more, because our teachers are the biggest determinant of where New Zealand is going to be in 30 years' time, of all the Government employees. We'd not only give them tax cuts of between $2,000 and $3,000 each; we'd also give a teaching excellence reward fund to pay the best ones more. 
Our geopolitical situation has changed since Helen Clark said that we lived in a benign strategic environment. The ACT Party would invest in defence up to 2 percent of GDP in order that we can go to the Australians and say we want Anzac back. We want an independent but interoperable Anzac defence force in the South Pacific because—let's be honest—our neighbourhood has changed. 
Finally, we would share $1.2 billion per year with councils so they can afford to build infrastructure, but only if they say yes to building more houses for the next generation. That is smart, strategic investment in ACT's alternative Budget to genuinely secure the future and give light at the end of the tunnel so all those people—all those young people, in particular—who are asking after this Budget, this bluff and bluster from Grant Robertson, "Is there really a reason for me to stay here? Is there light at the end of the tunnel from the cost of living crisis? Is there a strategy to get ahead of former communist countries that are now richer than us?" Well, ACT's gives hope to those people that next year, things will change. We'll take our Budget seriously, and New Zealand will have a bright future after all. But Labour's Budget today—that ain't it. Thank you, Mr Speaker.





DEBBIE NGAREWA-PACKER (Co-Leader—Te Paati Māori): Tēnā koe e te Pika. That is the first time I've stood up with ACT clapping. 
When we look across our world as tangata whenua on 19 May 2022, this is what we see: a landscape where we once owned 100 percent of our whenua, and now we own less than 4 percent. One third of people on the dole are Māori, 65 percent of women in prisons are Māori, and they were put there for just trying to survive and feed their tamariki. More than a quarter of our people are living in poverty, 99c in the dollar was taken from us, and we are supposed to turn that deficit around with 1 percent returned in iwi settlements. The richest 10 percent own 70 percent of the wealth and the top 1 percent own a quarter, while 50 percent of Aotearoa own just 2 percent of the wealth. We have the highest indigenous incarceration rates in the developed world, the highest homelessness rates, and the highest domestic violence rates in the developed world.
This damning state of affairs would shock anyone, but what's even worse than the numbers is what this means for ordinary people. Some of the whānau I know on the ground in Te Tai Hauāuru who are on benefits are paying up to a quarter of their incomes to service Government debt that was incurred to cover basic needs like food and bills during the COVID pandemic. This is on top of rising prices, an insecure job market, and the Government dropping support they brought in during the pandemic such as the double winter energy payment. The theft of our assets over generations is what has built the fortunes of the rich in this country and it has fuelled this extraordinary wealth divide. 
Our world, our reality, as Te Ao Māori is never reflected in the speeches, policies, legislation, or Budgets that are put forward in this House by successive Governments. That is why we are here. It is the role of Te Paati Māori in Parliament, whether on the cross-benches, in Opposition, or in Government, to fight to ensure that every Budget that is put forward in this House is a Budget that restores power and resources to whānau, hapū, and iwi; that every Budget is a Budget that delivers for Māori and honours Te Tiriti o Waitangi. Funding for Māori programmes will not work if these programmes aren't conceptualised, designed, managed, and governed by Māori. Funding for Māori programmes indeed have to be ma te Māori, ki te Māori, mo te Māori, e ai ki te Māori—by Māori, to Māori, for Māori, according to Māori. 
This is what we mean when we talk about mana motuhake. We are here to be an unapologetic voice for tangata whenua, for our aspirations, our visions, our imperatives, our dreams, and, as a descendant of Ngāti Ruanui growing up in Pātea, I know all too well the real impact on the ground when Budgets fail to deliver for Māori grassroots and fail to honour Te Tiriti. I spoke in my maiden speech of the hardships our people endured in the 1970s and the 1980s as we faced the loss of jobs, factories, schools, banks, and infrastructure. While the State could have responded to this widening inequality with the compassion and care, instead, in the 1990s, we got benefits cuts, more police, prisons, and racist and bigoted rhetoric aimed at Māori and the poor. The persistent disparities in social incomes for Māori are the result of decades of under-investment and deregulation by successive Governments, red or blue.
In recent years, there's been a continued bipartisan refusal to level the playing field and significantly redistribute wealth back to working people, back to tangata whenua. Instead, Governments have tried to address problems with bureaucratic solutions, never enabling communities to address the root causes. As a result, inequality in Aotearoa is only getting worse. As Bernard Hickey has reported, the pandemic has made the rich $952 billion richer, while the poor were forced $400 million further in debt to the Government itself. Foodbank use more than doubled. Any Budget that is put forward must focus on reducing inequality and restoring the wealth of the grassroots.
Te Paati Māori acknowledges the Prime Minister and her Government on Budget 2022. It makes some great progress in a few areas, and we, again, are grateful that she has decided to adopt some more of our policies. Anei he koha—feel free to take the rest of them, too.
However, sadly, e te iwi, this is not a Budget that delivers for Māori or honours Te Tiriti; this is a Budget that tinkers with the generational challenges that we're facing. It doesn't deal with the root causes in a systemic or sufficient way. 
During the pandemic, Te Paati Māori was proud to work alongside Whānau Ora and our grassroots hauora providers across the country to hold Government to account and to pressure them to ensure that funding was invested directly into our own front-line organisations. This was essential in turning around the Māori COVID response and it led to its huge success—surprise, surprise. If given the chance, we know how to look after each other; we just need the Crown to step out of the way.
Off the back of the pandemic response, it seems crazy that the Government realises that the success of the Māori COVID response could be replicated across social service delivery, economic development, environment restoration—go figure. We may then be seeing in this Budget a wholesale devolution of funding to Māori organisations to continue this success model to enable us to do what we do best, which is look after own and lead as kaitiaki. That would have been revolutionary. It would have allowed us to realise our dreams for self-determination and self-sufficiency in an Aotearoa where our mokopuna have everything they need to thrive and are supported to grow up and be proud to be Māori. That would be a Budget that truly delivered for Māori and honoured Te Tiriti.
However, in this Budget, what we largely see is business as usual. It's vanilla, it's lacking ambition—more money going into broken systems that have failed our people for generations. 
Even in the one area where the Government can be acknowledged for making progress—health—this Budget lays bare the reality of the Government's inadequate vision for Māori health. Aotearoa has been starved of health funding for decades. Our system did not cope with the pandemic, and the State finally had to realise that the best outcomes for Māori occur when the bureaucracy steps aside and resources Māori to lead our own solutions. 
Still, even after agreeing to the Māori Health Authority, the Crown continues to put up financial and legislative barriers to it being truly successful. I was on the select committee and the Government refused to put tino rangatiratanga into the legislation. A Budget that delivers for Māori and honours Te Tiriti would have looked like a Budget for the Māori Health Authority that matched that of Health New Zealand. 
It is pleasing to see an increase in Vote Health, but we, as Māori, are actually worse off. The more the mainstream gets, the more the inequity is increased and the more we fall behind. The announcement today is even worse than we thought. The Government's own memos show that the Māori Health Authority only receives 0.7 percent—0.7 percent—of the Vote Health budget. That is 0.7 percent for a people that make up more than 17 percent of the country—20 percent, if they're in Taranaki—with entrenched inequities. This actually increases the inequity gap in funding. It's shocking. We expected to receive 2 percent. Even on that basis it would take 1,840 years to reach parity—1,840 years.
We do acknowledge the $191 million increase for Pharmac cover over two years. We have constantly pushed for increased funding for lifesaving cancer drugs, but this still needs to go further. More mental health funding is good, but it must be proportionate to need, and in this Budget, it's not. 
A Budget that delivered for Māori and honoured Te Tiriti would be a Budget that ensured everyone has enough to do well: lifting the incomes of beneficiaries, students, and kaumātua, raising the minimum wage to $25, and honouring pay equity claims in health and education. It would look like a Budget that shifts the burden of tax on to the wealthy end of town.
We acknowledge the rebate for low-income whānau. This would be only for those who don't receive the winter energy payment and benefits. This is a cruel, cost-cutting way of looking at whānau wellbeing. 
We cannot believe that half-price public transport has not been permanently put in place. Extending it for another two months only is just pathetic. 
The change with child support payments is greatly welcomed, and it is something that whānau have been pushing for for years. This will make a big difference for whānau.
When the National Party and ACT Party talk about their cost of living crisis, what they're talking about is their wealthy friends feeling the pinch for the first time and having to put off that second yearly overseas holiday, or thinking twice about that second Tesla. That's why their solution is tax cuts for the wealthy paid for by the poor, and then they have the gall to call us bottom-feeders while we fund their wealthy lifestyles—go figure.
When Te Paati Māori talk about the cost of living crisis, what we are talking about is the hard-working whānau not being able to afford the cost of basic necessities like food and petrol—whānau who already live pay cheque to pay cheque. This crisis is only deepening the entrenched, persistent poverty and deprivation that our people have endured for generations. That's why our solutions include shifting the tax burden from the poor to the rich, lifting wages, transformative changes to the welfare system, free public transport, regulating and breaking up the supermarket duopoly, and removing GST from food—a policy which a recent poll showed that more than 75 percent of this nation supports.
A Budget that delivered for Māori and honoured Te Tiriti would be a Budget that enabled everyone to have a warm, dry, and affordable house to call their own, where they choose, where they are on their own whenua, in the city and in the local community. It would recognise that for Māori, the housing crisis has only been made worse, and is already a depressing reality that has locked us out of securing housing and homeownership. The Government has comprehensively failed on housing.
Māori make up 50 percent of the waiting list for social housing, 30 percent of Māori pay rent that is over 30 percent of their weekly income, and 33 percent of all Māori will shift residence every three years. At least 12,000 tangata whenua are homeless on their own land. 
We acknowledge that the Kāinga Whenua loan cap will also be increased from $200,000 to $500,000, and that there will be more funding for insulation and heating in homes. But this Budget will not address the housing crisis in any meaningful way. It barely shifts the dial.
Despite much-needed investment in Māori housing in Budget 2021, this has yet to result in many houses actually being built, or whānau actually securing somewhere to live. We must massively increase the pace of construction of State houses while enabling papakāinga and community housing at scale through regulatory reforms and devolving funding and power to tangata whenua and our communities. 
We must stop all sales of freehold land to offshore foreign interests. Rather than ruling out the very policies that would help people the most, as the Prime Minister has a habit of doing, we must do what actually works. That means a capital gains tax, excluding the whānau home. That means rent controls. That means scaled-up, equity-based rent-to-buy schemes.
A Budget that delivered for Māori and honoured Te Tiriti would invest in the prevention of crime through kaupapa Māori philosophy. It would defund racist systems that target, harass, and kill our people. Te Paati Māori has been absolutely consistent in highlighting that the new funding for police and corrections will not address the drivers of crime. What it will lead to is even more dead Māori on the streets, and, as my tungāne Rawiri has said, we can't police and jail our way out of problems caused by failing education and failing health, housing, and welfare systems. The burden of harassment, arrest, conviction, and imprisonment are all carried disproportionately by Māori.
What's more, we are also pumping more money into the military. The Government's defence capability plan released in 2019 reveals that they intend to spend an extra $20 billion on the military by 2030. Aotearoa should be ramping up our military capability in the 21st century. Yes, we need to be able to defend ourselves. Yes, we should contribute to peacekeeping. But we have no business getting involved in imperialist proxy wars, whether they are instigated by Russia, the US, China, or anyone else. We should stand as an independent and neutral force for security, order, and peace in the South Pacific. At a time when the finance Minister has caved to establishment pressures to restrain spending, why would he choose to invest millions and millions of new funding into the police and the military?
The Government is both refusing to take on the vested interests whose greed is driving the crisis we face and is refusing to lift the ambition for Aotearoa and invest to deal with the entrenched disparities and systemic barriers that are holding up our people and holding our people back, because—let's be very clear—it's our people who pay the price: those who are working two or three jobs and still struggling to put food on the table, those who are trying to raise babies while paying a quarter of the income in debt to Work and Income, and those unable to put a warm, dry roof over their kids' heads. Tangata whenua pay the price; tangata whenua suffer the consequences.
Until this House makes a stand and redistributes wealth, it's simply putting nails in the coffin of ngā tangata whenua o Aotearoa. Te Paati Māori will continue to hold this Government to account. We will continue to work with them and acknowledge where they have made real changes that will benefit our people. We will fight to ensure that future Budgets do deliver for Māori and, indeed, honour Te Tiriti o Waitangi, and that Budgets progress us towards our mana motuhake. We will continue to build the strength of our movement for tino rangatiratanga. We will continue to grow our numbers and influence in this place, and we will always strive unapologetically to restore the self-determination and self-sufficiency that is uniquely ours. Nō reira, tēnā tātou katoa.





Hon DAVID PARKER (Minister for the Environment): I move, That this debate be now adjourned. 





A party vote was called for on the question, That the motion be agreed to.
Ayes 75
New Zealand Labour 65; Green Party of Aotearoa New Zealand 10.
Noes 44
New Zealand National 32; ACT New Zealand 10; Te Paati Māori 2.
Motion agreed to.
Debate interrupted.





URGENCY
Hon CHRIS HIPKINS (Leader of the House): I move, That urgency be accorded the introduction and passing through all stages of the Taxation (Cost of Living Payments) Bill and the Income Insurance Scheme (Enabling Development) Bill; the introduction, first reading, and referral to select committee of the Commerce (Grocery Sector Covenants) Amendment Bill; and the introduction and passing through all stages of the Companies Office Registers Funding Validation Bill, the Customs and Excise (Tobacco Products) Amendment Bill, and the Coroners (Coronial Cap) Amendment Bill.
Very briefly to summarise the reasons for urgency for these pieces of legislation, there are six bills—five to go through all stages and one to have a first reading. The Taxation (Cost of Living Payments) Bill establishes the Cost of Living Payment scheme that was announced in the Budget today, and the scheme comes into effect on 1 August—hence the need for urgency. 
The Income Insurance Scheme (Enabling Development) Bill enables ACC to prepare the Income Insurance Scheme. It does not initiate the scheme; that will be subject to further legislation. 
The Companies Office Registers Funding Validation Bill deals with the way the Companies Office funds its corporate registry functions, and deals with an urgent issue there around the validation of the use of funding, which other parties have been informed, and consulted on, about. 
The Commerce (Grocery Sector Covenants) Amendment Bill, again, deals with an issue announced in the Budget today, which is the Government's desire to ensure that competition in the grocery sector is not blocked through the use of grocery sector covenants. That bill will have a short select committee process. 
The Customs and Excise (Tobacco Products) Amendment Bill deals with a particularly narrow form of tax evasion around water-pipe tobacco.
And the Coroners (Coronial Cap) Amendment Bill is a small bill that just increases the number of coroners, which is a Budget measure. We want to have the coroners in place as soon as possible, given the level of demand there is for coronial services.





A party vote was called for on the question, That urgency be accorded.
Ayes 75
New Zealand Labour 65; Green Party of Aotearoa New Zealand 10.
Noes 42
New Zealand National 32; ACT New Zealand 10.
Motion agreed to.





INTRODUCTION OF BILLS
SPEAKER: I understand it is the intention of the Government to introduce bills. 
CLERK: Taxation (Cost of Living Payments) Bill, introductionIncome Insurance Scheme (Enabling Development) Bill, introductionCommerce (Grocery Sector Covenants) Amendment Bill, introductionCompanies Office Registers Funding Validation Bill, introductionCustoms and Excise (Tobacco Products) Amendment Bill, introduction, andCoroners (Coronial Cap) Amendment Bill, introduction.
SPEAKER: The Taxation (Cost of Living Payments) Bill is set down for first reading, forthwith. The remaining bills in the urgency motion are set down for first reading, presently.





TAXATION (COST OF LIVING PAYMENTS) BILL
First Reading
Hon DAVID PARKER (Minister of Revenue): I present a legislative statement on the Taxation (Cost of Living Payments) Bill.
DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.
Hon DAVID PARKER: I move, That the Taxation (Cost of Living Payments) Bill be now read a first time.
The world is experiencing inflation at higher rates than we have seen for many years. This is a combination of the effects of COVID-19. COVID-19, of course, disrupted methods of production and transportation around the world, and those effects are not yet over. This is part of the cause of inflation, as is the rising domestic demand in New Zealand and around the world which has meant that most of the world's rebounding economically from COVID at the same time, creating inflationary pressures.
So inflation was already building when the war in Ukraine sent energy, fertiliser, and food prices higher, squeezing household real incomes. This is not just a New Zealand phenomena; around the globe, we're seeing all countries grappling with the same issue. In the US, inflation is running at 8.5 percent; in the UK, it's 9 percent; and, as the Minister of Finance in his Budget address today said, the OECD average is 8.8 percent.
We know that the cost of living affects just about all households, but it most affects those who are on low to middle incomes. We've already taken a number of steps to help those households: we've, of course, significantly increased the minimum wage each and every year; we've increased family tax credits; and we established the Best Start payment and the winter energy payment.
Treasury says that inflation will outstrip annual wage growth this year for the first time since this Government was elected in 2017. I noted in the Budget documents that the prediction for this year is wage growth of 4.6 percent against inflation of 6.7 percent. This follows years of strong wage growth and the same Budget forecasts from Treasury that next year, under this Government's economic plan, wages will once again grow much more strongly than inflation. I would point out this is in contrast to the record of the prior National Government, where real wage growth was negative through the global financial crisis and remained very anaemic long afterwards.
In recent months, we've helped in other ways: we have slashed fuel excise duty, we've cut road-user charges, and we've halved public transport fares. Today's Budget extends those measures and also halves public transport costs to more than 1 million people on a permanent basis. We're also committed to dealing with some competition issues in the grocery sector to ensure that people pay fair prices for food and other basics—that issue will be covered in more detail in respect of other legislation which we are proposing to pass through all stages as part of this urgency motion to remove barriers to new retailers entering the market.
In addition to all of those measures, the Government is, by this bill, introducing a payment of $350 to help low and middle income people cope with current inflationary pressures. For each individual recipient, this is equal to half the couple rate for the winter energy payment. The payment is a temporary measure to provide support for individuals who earned up to $70,000 in the last tax year and are not receiving the winter energy payment. The income cap of $70,000 has been set to provide support to those who earn up to around the average annual wage, which is around $65,100. On that issue, with respect, the Leader of the Opposition had it wrong in his Budget address, about an hour ago.
This initiative is not aimed at people who are on a main benefit or superannuation; those people are already being supported through the measures I previously described, such as annual cost of living increases and by the winter energy payment which provides support for their living costs through the winter months.
A large group of people is supported by this payment—approximately 2.1 million New Zealanders will be eligible for the payment. The total payment of $350 will be split into three monthly instalments, each of around $160 million, with the first on 1 August, and this will be paid out by Inland Revenue. There is no application process. For those eligible, Inland Revenue will make the payment by direct credit into the person's New Zealand bank account. To achieve this, we need to make some relatively minor changes to tax legislation to allow Inland Revenue to make that payment using information that Inland Revenue already holds.
As I said before, the first instalment will be made to eligible people by 1 August. This date allows Inland Revenue time to prepare for the payments, including obtaining bank details for the over 200,000 taxpayers for whom we don't hold a bank account currently. It will also enable more people to complete their tax returns for the year ended 31 March 2022, upon which the entitlement is based.
The International Monetary Fund has said that now is not the time for substantial tax cuts. In contrast to other parties, we are not promising tax cuts that gives hundreds of thousands of dollars each year in tax cuts to CEOs and little to others; we believe our solution is better and fairer. In conclusion, this payment will help more than 2 million New Zealanders, and I commend this bill to the House.
DEPUTY SPEAKER: The question is that the motion be agreed to.





NICOLA WILLIS (Deputy Leader—National): We have, today, the spectre of band-aid economics for an economy that is broken, for an economy that is sending New Zealand backwards, that has New Zealand households struggling with a cost of living crisis that is not only the deepest that's been experienced in 31 years but a cost of living crisis that we learn, in the Budget today, is set to continue for many years to come. This is not a temporary cost of living crisis, which you might believe while you listen to David Parker talking about a three-month measure. This is a cost of living crisis that is set to have inflation outside the band that New Zealand has accepted for 30 years, above 30 percent, well out to 2025. If you think it's bad this year, New Zealand, with inflation meaning that everywhere you go, the groceries, the petrol, every price you pay is going up each month, then don't think it's getting better under Labour. 
Today, the Treasury confirmed that next year inflation is going to keep pumping hard. It's going to be at 5.2 percent. Then the year after that, in 2024, are we going to see it come back then? No. It's going to be at 3.6 percent. So what does that mean for hard-working New Zealanders? It means under Labour, every dollar buys them less. It means that their wages will not go as far. It means that their household budgets will be going backwards.
Do you know who else is going to be hit hard? That is every New Zealander who has a mortgage. We have not had a situation in this country for many, many years where inflation continues outside the band that the Reserve Bank is meant to accept as acceptable for three years. What that tells you is the Reserve Bank is going to be hiking interest rates high and fast, and New Zealanders are going to be paying thousands more for their mortgages. 
So every New Zealander needs to know right now that this cost of living crisis is not temporary; it is the permanent gift that Labour is giving New Zealand, and it is set to bite very hard. It is set to take many people backwards. Not only that but we have an economic picture where growth is starting to stall, where we have growth out in the future years falling off a cliff, and we have the prospect of greater incomes in the future falling away. 
So what is the Government's response to this permanent set of challenges? Are they doing what we believe would be sensible and bringing some discipline and rigour to their own spending? No, no. Instead, what they are doing is the biggest Budget blow-out in New Zealand's history. Fresh from having the highest levels of spending that we've ever had to get us through a pandemic, are they winding it back—are they winding it back? No, they are not winding it back. 
In fact, what we have is a finance Minister who is not content with the biggest operating allowance in New Zealand's history at $5.9 billion. No, that's not enough for him. So ill-disciplined and careless has this Government become about its spending that he's raiding next year's Budget kitty as well. That's right. He's taking $2 billion from next year and he's allocating it this year. That's not enough either. He needs more. His thirst for New Zealanders' money is insatiable. So he's taking half a billion from the year after that Budget and he's allocating that in the Budget this week. 
You would think that at $8.4 billion, that might be enough to satiate the thirst that this Labour Government has for spending New Zealanders' money, but no. On top of that, they're going to spend the money that they get through the emissions trading scheme. They're going to spend it on a whole bunch of climate change initiatives, including ribbon-cutting ceremonies for big business. Then what they're going to do is they're going to keep spending COVID money on top. So we have the biggest blow-out in Budget history being presided over by this Labour Government in a time of record inflation with a cost of living crisis biting in.
So what should they do? Should they take a band-aid approach and pretend that this is just a temporary thing? Should they say to New Zealand, "Hey, look, it's only going to hurt for September, October, and November, so we've got a little payment just to make it OK."? Well, we say that is disingenuous in the extreme, because New Zealanders deserve to know that this cost of living crisis isn't temporary. It's not a three-month thing. It is going to go on for years. In November, we will christen Grant Robertson "Mr Christmas", because do you know what the Grinch will deliver for Christmas? He'll take away the temporary payment. He will say—Mr November will say—"Now, now. Labour's done all we can. We gave you back a little bit of your own money for a little while and we didn't like how it felt. I've got more spending to do. It all stops now." Will New Zealanders be better off? No, they won't, because they'll be looking forward to more inflation, higher prices. They will be looking forward to slipping further behind each week. 
So what is the alternative? Well, actually, what New Zealanders need is a disciplined Government that will get more bang for their buck, and not a Government that thinks it's OK to just keep hiring public servant after public servant, spending more and more money on strategies and plans that don't get results, that don't get outcomes—a Government that will be more disciplined about its spending. Then what they need is a Government that will give them permanent tax reduction, because it is not acceptable for Grant Robertson to let inflation be his stealthy tax, his silent tax increase, that pushes more and more New Zealanders into higher tax brackets and forces them to pay more tax. They deserve permanent tax reduction. 
That is why National has put forward a package that would give every taxpaying New Zealander some tax relief by indexing their income thresholds. Our package would be more generous to more people. Anyone earning more than $50,000 or more is better off with our tax reduction plan. For those on the median wage, $55,000 a year, listen in to this: National thinks you deserve $800 per year, not just this year but every year. What does Labour think? They reckon all you're good for is 350 bucks. Well, I know what New Zealanders are saying right now. Some of them are saying, "350 bucks—you know what I could do with that? I might be able to get a cheap ticket to Australia, and if I buy that ticket to Australia, then I might find a place where I can get ahead once more." 
So we say choose a tax plan that is more generous to more people. Don't choose a plan that says to some of our skilled, experienced teachers, police officers, some of the doctors in our community, some of the social workers in our community—don't say to them, "You're excluded from the plan.", because that's what Labour's saying today. They're saying to all of those teachers who are on the high step, "If you're a teacher and you've got a partner at home or you're a single earner and you earn over $70,000, nothing for you." Because at the heart of this idea is a principle, and the principle is this: Grant Robertson believes he can spend New Zealanders' money better than they can, and he intends to confiscate growing amounts of their incomes so that he can waste it and then redistribute it to them and expect them to be grateful for it. 
Here on this side of the House we say it's not working. If New Zealanders felt that the extra spending, the 67 percent in extra spending, was making them 67 percent better off, then they might have something to listen to, but they're not seeing it. They're are sick of the big promises with no delivery. They're sick of people who stand up and say, "We're going to give $2 billion—$2 billion—of your taxpayer cash to KiwiBuild, and it's going to solve the housing crisis, and there's going to be 100,000 houses." Then what do New Zealanders actually get out of the end of that? They get 1,300 houses. That's all they get. They get a housing crisis that worsens, with rents up the most they've ever gone up—up $150 a week—with a situation where housing is more unaffordable than it's ever been, where the State house waiting list has quadrupled, and where last night around 4,500 kids were forced to sleep in a motel room. 
So they know not to trust this Government. They know not to trust Grant Robertson when he says he can spend their money better than they can. We say to New Zealanders: you deserve better than band-aid economics and a knee-jerk reaction because Grant Robertson realised he was out of touch and that there was a cost of living crisis. You need a Government that will actually get on top of the cost of living crisis, reintroduce discipline to spending, make sure that inflation is pushed down with a Reserve Bank who actually focuses on price stability—a Government that won't let interest rates go through the roof, a Government that will give you the permanent tax reduction you deserve so that anyone earning $50,000 a year or more who works hard for their money will be better off. When the band-aid gets ripped off in November, New Zealanders can look forward to the smiling face of the Grinch: Grant Robertson.





Dr DEBORAH RUSSELL (Labour—New Lynn): The Opposition live in some fantasy world. They live in a world where they can say that an economy is broken when unemployment is down to 3.2 percent, an extraordinary low. The live in a fantasy world where they think it's a broken economy when growth will be about 4 percent by about June 2023. They live in a fantasy world. We will have net debt topping out at about 19.9 percent of GDP. They call that a broken economy—it is fantastical stuff. It's the sort of fantastical stuff that refuses to admit that there has been a global pandemic, refuses to admit that this is a Government that has responded nimbly to the global pandemic, and seems to think that New Zealand exists all on its own and doesn't have anything to do with the rest of the world.
On this side of the House, we are realistic about what is happening in New Zealand and what we need to do to help New Zealanders. Inflation worldwide is rampant; it is running. In the US, inflation is at about 8.5 percent; in Canada, it's 6.7 percent; in Germany, it's at 7.3 percent; and in the UK, it's heading towards 9 percent. The OECD average is around 8.8 percent. In New Zealand, we are not immune to worldwide phenomena, we were not immune to the global pandemic, and we are not immune to what is happening with inflation around the world. In Australia, they are currently at 5.5 percent inflation, and their Reserve Bank over there is predicting it is going to head towards between 6 and 9 percent. 
Here in New Zealand, we are experiencing inflation too. But all the predictions are, in the real world, that it will ease off next year—this is a somewhat temporary problem. It is a spike. Do you know why that will happen? It is because central banks around the world are taking action to curb inflation—just like ours. We know that even though all the respectable predictions are that this will be a temporary phenomenon, driven by the supply chain crisis and the war in Ukraine—both situations are expected to ease up—it is nevertheless hard for New Zealanders at the moment. So we have a cost of living package that is designed to help all New Zealanders. Bear in mind that part of this cost of living package is the cut in the fuel excise and the reduction in road-user charges, which has been extended for another two months. It is the subsidising of public transport with a 50 percent fare subsidy, which is being extended for another two months. These are measures that help all New Zealanders.
Every single New Zealand family is better off as a result of those changes, but this particular change that we are debating now is cold hard cash in the back pocket of people on incomes below $70,000. On that side of the House, they oppose it. They oppose helping out families and helping out people who are earning less than $70,000 a year. What did they say? "Oh, we don't like that." They just want to carry on their mantra, "Tax cuts, tax cuts, tax cuts." without thinking seriously about the nature of our taxes. 
There's a really good reason why we have chosen this approach in terms of helping out families through the winter that is coming. It takes time to put tax cuts in place. They don't just happen magically overnight because someone in fantasyland decides that they should happen. It takes time to get them implemented and through systems. We can do this payment now. It will take a wee while to get it up and going, but it is money that will be in people's back pockets this year. Unlike the Opposition, we are going to help everyone who has earned an income—who is not currently on a benefit or on super—from zero dollars to $70,000. So more people will be better off with what we're offering to help them get through in this time when inflation is hurting. That is part of a package that we've put together. It is a package that is designed for all New Zealanders. It is a package that puts straightforward cash in people's back pockets. It won't cover all the costs. It's a contribution to the cost of living, and it's a contribution that on this side of the House we are proud to make to help New Zealanders out during the tough times. I commend this bill to the House.





CHRIS BISHOP (National): Three hundred and fifty dollars is an interesting amount of money for three months. I'll tell you what 350 bucks buys: a one-way plane ticket to Sydney, Melbourne, and Brisbane—and that is what young Kiwis, in fact middle-aged New Zealanders, will be thinking about as they stare at this Budget and this paltry, pitiful amount of money that the Government has deigned, in its wisdom, to give back to New Zealanders.
This bill and the Government's Budget summarises the difference in approach between National and Labour. Labour wants to rapaciously take as much of your money as it's possible to take, churn it round the giant bureaucracy in Wellington—which has had 10,000 more bureaucrats added to it in the last four year—take all the dead weight loss that is involved in the tax system and all the bureaucracy in the tax system and all the bureaucracy of the tax system and all of the reduction in economic activity—take all of that, and then, if Grant's generous enough, he'll give a little bit of that back to you for three months.
DEPUTY SPEAKER: Order! I just want to make a comment. There's been quite a bit of using incorrect names and shortened names. Please use full names, it will reflect in the Hansard, and people will know who members are talking about.
CHRIS BISHOP: Grant Robertson, the Minister of Finance for the next 18 months—after which, hopefully, New Zealand will never be subjected to his rapacious, tax-hungry ways ever again—is a man who believes that the Government can just take as much money as it's possible to take, and then, if he's generous enough, he'll give some of it back to you: the poor, long-suffering taxpayer. 
So there'll be a big group of New Zealanders who will stare at this Budget and stare at this bill and say, "Yeah, 350 bucks, OK, well, look, I'm not going to turn down 350 bucks; it's better than nothing, because I'm staring at inflation of 7 percent and my wages are only going up 3 percent, and I'm staring at inflation above the 3 percent threshold over to 2025.", but they will also look ashore and say, "You know what? Actually, I'd be better off in Australia or further afield." So $350 is an interesting sum of money, because it's about a one-way flight to Sydney, Melbourne, and Brisbane. It probably won't get you to Perth, but it would definitely get you to the east coast of Australia.
Let's be extremely clear about the numbers in this Budget: 6.9 percent inflation, now a wage growth of around 3 percent. What does the Budget say? It says that, for the next three years, inflation isn't going away. This is not a one-time thing. This is not a temporary thing. Deborah Russell said, "You know, oh, well, it's forecast to come down." Yeah, it's forecast to come down; it's forecast to come down from 7 percent to 3.6 percent to 3 percent. That is still massive inflation. Kiwis—
Hon David Parker: No, it's not.
CHRIS BISHOP: Yes it—David Parker says, "No, it's not." David Parker remembers—I'm not having a go at his age but it is just literally true that David Parker remembers inflation of 7 percent, 8 percent, 9 percent, 10 percent; I don't, because I'm 38 and people my age and below don't remember inflation of serious levels of sustained inflation above 5 percent or 6 percent. They don't remember it because they've never experienced it, and what they're about to experience is what that is. It's the robber in your back pocket. It's the thief that you can't do anything about. It's happening here in New Zealand and it's going to continue and it's going to be bad. It's the thief in your back pocket.
There are things the Government could do to make it better; not this—not this band-aid approach which the Government is proposing in this bill—but have some fiscal disciple. Grant Robertson has spent, since 2017, an extra $51 billion. He said that, for this Budget, he was going to be fiscally prudent and it was going to be all balanced and all of the rest of it, and everyone went, "Well, OK, well, whatever.; $6 billion is actually the single biggest increase in the new operating allowance in New Zealand history, but OK, $6 billion." What they have tried to submerge within the paraphernalia sent out alongside the Budget, what the Government has neatly tucked under the covers, is that it is not just $6 billion of new spending this year; it's much, much more than that. 
You take your $6 billion—it was actually $5.9 billion, to be fair—but they've also pre-spent $2 billion from Budget 2023, so that's money that's been allocated in the 2023 out-year that has been brought forward to 2022, and, to make matters worse, they've taken $400 million from Budget 2024 and brought that forward. So that brings us up to $8.4 billion. Then, on top of that, the Cost of Living Payment package, which we're legislating to allow the IRD to do, is separate. Grant Robertson has just decided that that's separate to the operating allowance, that's outside it. So that's another big chunk of money: $800 million, or so. This is not prudency; this is profligacy. This is an attempt to submerge within the Budget papers a massive Budget blowout. It's a huge increase in spending. 
Does anyone seriously think that in Budget 2023, which we hope will be Grant Robertson's last one, he'll turn up and say, "Well, look, I'm just going to have to rein in the fiscal spending; I've just spent too much."? Does anyone seriously think that? No, because for five years now—Budget 2018, Budget 2019, Budget 2020, Budget 2021, and Budget 2022—there's always a reason; there's always another excuse. There's always a reason. He just turns up and there's another reason to spend more money, and now we find ourselves, if we spend an extra $50 billion—spending's up by 70 percent in the last five years. Does anyone seriously think that we're going to turn up to Budget 2023—which, by the way, is an election year, which is not normally a year in which Governments fiscally constrain themselves; normally, they turn on the spending spigots—and Grant Robertson's going to say, "Well, I'm very concerned about the fiscal discipline; I'm going to have to wind it back."? No. Of course he's not going to do that; we're going to have another spend-up.
The best indication of a future with Grant Robertson and Labour is what happened in the past. They just spend, spend, spend. They're addicted to it—absolutely addicted to it, and it's not good quality spending. 
What is the outcome of 10,000 new bureaucrats? Are we getting a 68 percent increase in effectiveness off that spending? Absolutely not. I'll tell you what it's going on: have a look through the emissions reduction—I hesitate to call it a plan; it's more a propaganda paraphernalia produced by the Ministry for the Environment. I have no doubt that a lot of people have spent an awful lot of time doing a lot of website design work and coming up with strategies and developments and every synonym for "strategy" and "plan" you can think of under the sun. But all that is within that is just more plans. Climate change is what is happening while you're making other plans. Like, it's just literally a series of plans and strategies and development.
New Zealand Transport Agency spin doctors—they spend more money on consultants, more money on plans and strategies and propaganda from the transport agency, than we actually do building roads or any public transport projects. We know that all too well here in Wellington, where we've spent five years stuck in gridlock because the absurdly named Let's Get Wellington Moving project is doing the exact opposite while a lot of people make a lot of money doing consultancy reports for something that is just not going anywhere. They spent $2.5 million on the Mongrel Mob, $51 million on a cycleway that's never been built—a cycleway across the Auckland Harbour Bridge—more money on health restructures. Poor quality spending.
The point is that this poor quality expenditure is driving up inflation. If you don't believe me look at page 44 of the B.3 in the Budget: "Inflation is being driven by strong domestic demand pushing up against constrained supply." Strong domestic demand of which Government spending—extremely high Government spending—is a massive component of it.
So the question is: is this enough or is there a better way? Our argument is that there is, because if you're someone on the average wage, you get nothing from this, and anyone on 50,000 bucks a year or more gets more from National's plan. There's no doubt about it. Our view is that we need permanent spending restraint and fiscal disciple and permanent adjustments to the tax thresholds, which would deliver more money in New Zealanders' back pocket. 
What is the Government seriously saying? "We're going to have a three-month increase in people's take-home pay, and we're going to get to November and December and then it's going to go back up again, running into Christmas."? Yeah, right! This will just be continued. Why don't you just legislate for what we should do in the first place: legislate for National's plan which delivers more money in New Zealanders' back pockets and actually reflects the cost of living crisis that we are experiencing?





BARBARA EDMONDS (Labour—Mana): Thank you, Mr Speaker. It's a real privilege to be able to stand and take a call on the Taxation (Cost of Living Payments) Bill. Now, I've been an MP now for around 18 months, and I've watched politics for a number of years, and it's quite clear that the National Party have never had a good history with numbers. Their previous Budget had a massive hole in it, but, you know, what did they do? They shifted their spokesperson, and they moved them on. So based on what the National Party is suggesting—because they haven't actually provided us with an alternative budget. Based on their tax policy that they're standing by, which are tax cuts, they're saying a person on minimum wage would receive $110 in a tax cut. So based on the measurement that the previous member had used, $350 under this side of the House's policy gets a person a one-way ticket to Australia. Under the National Party, they would dump you in the middle of the Tasman Sea, because that's exactly what the National Party tax policy of tax cuts does. 
A person who earns over $180,000 underneath their policy would receive an $8,000 tax cut; a person on the minimum wage would receive $110. There is an absolute injustice and imbalance in that sort of policy, so that's why we are saying we need people to get short-term relief. This is targeted; it is focused. It is focused on those who are in the most need, those who earn the median wage and have the lowest incomes. Under this tax policy, they will get short-term relief of $350. So let me put that to you in practical terms: that is enough money to help you with your warrant of fitness; that is enough money to help you with the registration. What does $110 a year get a person on the minimum wage? Doesn't even get you your registration. So that's why this Government is absolutely supporting a cost of living payment amendment that we've got on the table today. 
One of our previous members—Dr Deborah Russell; fantastic academic and tax lawyer—said there was a lot of fantasy world, a bit of misinformation that was coming from across the other side of the House. So let me put down the real facts, the real information: a return to surplus in 2024-25—
Chris Bishop: Oh yeah, I'll believe that when I see it!
BARBARA EDMONDS: —unemployment rates projected to remain at record lows—3.2 percent. Yes, Mr Bishop, "Oh yeah", because, actually, even though you're saying you're looking at the Budget documents, we had the Reserve Bank in last week, and we talked about the actual pressures that are causing the inflation, so it would have been good if members on the other side of the House had actually paid attention, because a third of it is from the Ukraine-Russia pressure overseas—international pressures; a third of it is around tradables, which has come through a lot of the pressures coming from all the supply pressures; and a third of it is within New Zealand. So I'm saying to you, the unemployment rate at 3.2, the net debt forecast peaked at 19.9 percent of GDP—that's lower than Australia, the US, the UK, and Canada. And economic growth—growth—4.2 percent in 2023.
If you don't believe me, then how about you listen to the IMF—the International Monetary Fund; independent. And what did the IMF say? When they released their annual review for New Zealand, they found New Zealand was in a strong position. They also said, "Now is not the time for substantive tax cuts that give more significant amounts to CEOs than low-income earners." The IMF said, "Now is not the time for substantive tax cuts." So, therefore, this payment is a temporary measure to provide short-term support for those who earn up to $70,000. And these are the people that are hurting. It's that middle. It's that $70,000 and below. The payment is a temporary measure for those who are not receiving the winter energy payment, which came through earlier because we knew that we had to provide support for people over those winter months. 
The income cap of $70,000 is set to provide support to those who earn around the average annual wage of $65,000. So what does that mean? It means that 2.1 million people will be eligible for the payment. What is 2.1 million people? That's Auckland, Wellington, and Christchurch. That is the population of people who will benefit from the changes that are covered in this bill. So, therefore, I've got nothing much more to say other than the substantive tax cuts across the road will dump New Zealanders in the middle of the Tasman Sea, whereas this will provide a short-term measure of relief for our families—for 2.1 million people. Let me leave that again: 2.1 million people will benefit from this. So, therefore, I commend this bill to the House.





RICARDO MENÉNDEZ MARCH (Green): I rise on behalf of the Green Party to speak on the first reading of the Taxation (Cost of Living Payments) Bill. It's been quite the ordeal listening to the National Party members who keep talking about expenditure and advocating for austerity, ignoring that, right now, many of our low-income communities are struggling to get by. This bill is an acknowledgment that many of our communities are struggling to make ends meet. It is a temporary payment of $350 targeted towards people earning less than $70,000.
But there is a problem. In an acknowledgment that people are struggling, what we are ignoring are some of the communities that actually are doing it the toughest—that the sign of this legislation, and the intent of this policy, seeks to leave behind people on main benefits. We've known for years that these are the communities that are on the breadline. I think it's appalling, and a disservice to the communities that we're supposed to be serving, to not include them in a stimulus package, effectively, lifting incomes to allow people to make ends meet at a time where inflation is growing, where global events are putting pressure on supply lines, and, therefore, the cost of basic essentials is going up.
Yes, people on the benefit are already receiving the winter energy payment—but the Government knows that it is not enough. This is why, in 2020, the Government acknowledged this by doubling the winter energy payment at a time when things were tough. And things are still difficult for those families. It is a shame that over a million people will be excluded from this payment by design and by political choice. It didn't have to be this way. The Green Party has advocated that, as part of responding to our inequality crisis, we need permanent increases to incomes so that families can thrive, not just survive.
Recently, there was a group of organisations, under the Te Tapeke Fair Futures group, that released a report explaining just how much some families were struggling to make ends meet. Some of them were under $307 in order to just provide for basic essentials.
This research was backed by some of our organisations that are doing the most at the front lines—including Barnados, the Manawatū Tenants Union, Monte Cecilia Housing Trust, Auckland Action Against Poverty, New Zealand Disability Advisory Trust, Auckland City Mission, Child Poverty Action Group, the Disabled Persons Assembly (New Zealand) Inc., FIRST Union, Save the Children, and many others. These organisations know the struggles that our communities are going through. In fact, people on the ground have been speaking to the media and to politicians for many years, explaining that we need permanent fixes to our income support system.
So I'm stoked for the families that will find some temporary relief through this legislation, but I'm deeply disappointed that we are ignoring the reality that incomes remain too low. I've heard members of Government talking about how this is a Budget of health. I want to say that researchers and communities have told us, for many years, that we need to be focusing on the things that determine whether someone will be healthy—and incomes play a massive role in that. When families are struggling to make ends meet, they go through toxic stress. That toxic stress builds up and contributes to families getting sick. If we're serious about building an infrastructure that is fit for purpose, and a health system that delivers for all people in Aotearoa, we need to have livable incomes. This is a massive missed opportunity to ensure that everyone is looked after.
The inequality crisis is not going to go away in three months' time; in fact, it is not new. So we're calling on Labour to look at the many recommendations their own Government reports have put out. The recommendations that people on the benefit have been talking about—to increase main benefits; to individualise the income-support system; to scrap benefit sanctions; and to look at genuine, transformative solutions so that our families are able to fully participate in their communities. Kia ora.





DAMIEN SMITH (ACT): I wonder, do the Green Party, as partners with the Labour Party—did they know about this initiative? And, if not so, I can understand the disappointment in the member's communications.
This Government has lost its nerve tonight. Grant Robertson treats our income as if it's just there to be chopped up into taxes, and I see the Minister's left the room. He believes that every—
Hon Carmel Sepuloni: You're not allowed to say that!
DAMIEN SMITH: He believes your money is—
Hon Carmel Sepuloni: Point of order, Mr Speaker. 
ASSISTANT SPEAKER (Ian McKelvie): Order! Order! The member shouldn't refer to people who have left the room.
DAMIEN SMITH: Thank you. This Government believes that your money is a Government resource, even before it's taxed. And, once again, with this Budget, we've now found out the price to gain political support, and it's $350. That's $27 a week, which probably gets you a slab of Speight's. I'd like to price check that, but I haven't had the opportunity yet to do that. 
In terms of the Taxation (Cost of Living Payments) Bill, there's been no regulatory impact assessment; no advice from Treasury on this. So when was this constructed? Was it just dreamt up because, "Hey, we've got a problem with the cost of living, under the pressure from the ACT and the National parties."? And was it slipped in before the Budget was printed a couple of days ago? Because this can't seriously be a strategy that will help people with the cost of living. It's temporary, it's got to be wound down quickly—just like the fuel taxes—and it doesn't actually lead to success. 
That's why the ACT Party argues for major tax cuts—and the public deserve them this time—where we have a simple, three flat-rate structure of 17.5 percent for people under $70,000, and 28 percent for those above. That would have stimulated the economy, it would have helped with the cost of living, it would have actually made sense in the mind of the public, and it would have been something the IRD would have backed and administered easily. But no, we've come up with Mr Parker's initiative that—after his great speech to the nation on taxation and helping people, this is what the Labour Party has come up with. 
Now, in terms of the Commissioner of Inland Revenue using their powers to do this and to sign it off, we've got a situation where, under urgency again, we've missed the story. It's as if Labour has missed the story of the golden goose, or maybe it hasn't. A key part of the "brain drain Budget" is to not tax too many productive people. Households are facing the greatest cost of living crisis ever. Even though the Prime Minister and Mr Robertson were sharing cheese rolls today, people this weekend will be going, "Can I pick up that kilo of cheese which is more expensive, or do I do without?" 
It's only four years ago that—under this Budget, the amount of tax per person has gone from $15,825 up to $21,945. So it's not even giving and taking away; this is just taking away. This is, potentially, the greatest piece of political spin this Government has ever done. It's not transparent; it's just been a hit, and it hasn't been thought through in a fashion that actually will get traction in the household this weekend. It's going to fuel inflation, it's going to drive up—with the Monetary Policy Statement next week—the rates of mortgages and rentals. Everything this Government does is like pouring fuel on the fire. 
The public would rather have tax cuts like ACT is proposing, and not to leave for Australia. We're now the highest taxed country in the Asia-Pacific region; our Aussie friends have pulled ahead, our Singaporean friends have pulled ahead, and our South Korean friends have pulled ahead because they're more productive. And so we want real change; not something that's thrown out which lasts for a year. There's three monthly payments—it's like going down to Noel Leeming, right? This is not how Government tax should be administered, and it is money out the door to try and cover up that this Government has a cost of living crisis—it admitted it today, and we know that this is not going to fix it.
So if you look at a nurse under ACT's alternative budget, they'd be $2,000 better off if they had a better tax rate. A family on an average full-time salary of $73,000, a part-time worker earning $30,000, and two children could be $2,800 better off. A nurse, and a teacher, or police officer near the beginning of the year earning $60,000 would be nearly $800 better off. So why is this Government just not giving back to the people? Why is it so intransient, considering the other programmes that it's given out billions and billions of dollars to? The first people that should have got this money are the citizens of New Zealand. So everyone's getting squeezed—nothing's changed today except a few extra dollars chucked out which will buy a few loaves of bread. The Kiwi battler is going to make a decision about this Government, on how it earns its money, how it pays its bills. It wants the Government to get out of its life, and it wants transparency in the day-to-day management of its household income. 
This was the day for Grant Robertson to tighten his belt, but, no, he loosened it. He's fuelled inflation, he's off to the races again with a five-year plan that doesn't make sense in a holistic way, and Mr Shaw says we need two more Budgets of enlightenment. Well, where does that leave the country at a net debt level? So we've got to start earning away in a productive economy, and we've got to accept that things are tight. But, you know, in the New Zealand household people are tightening up their budgets, they are saving $27. They are actually doing it, right? They've been doing it for a long time now, before this Government has stepped in today. 
So Grant Robertson needs to stop treating our revenues like he's going to tax them and fill the gaps in his Budgets. And he needs to stop telling the people—and insulting the people—of New Zealand that this is what you're going to get to get through this crisis. This is the greatest crisis of living we've seen in a long time in this country. And Mr Parker needs to adopt his attitude about Government resources and taxes, where he's taken in so much money that it's time to contemplate a cross-party alliance to reduce taxes and give Kiwis a break.
So in terms of this piece of law tonight, and the explanatory notes—they've very, very interesting—under the scheme, a cost of living payment has been indexed to $70,000 per annum. I asked Treasury today, in anticipation of this moment, "Could you define to me what a low and middle income earner was?" And they said, "We don't know. We haven't got a definition in the Budget packs." I said, "Well, how are we supposed to do the calculations?" So Treasury has not defined what a low and middle income earner is, and that just about sums it up. So there needs to be changes there as well. So thank you for the opportunity, Mr Speaker, to speak on this bill. We will look at the numbers very carefully, but we won't be supporting it. 





GREG O'CONNOR (Labour—Ōhāriu): Thank you, Mr Speaker. This is shaping up as a fairly typical post-Budget day, you know: we propose, they oppose. That's what we're doing. I'm happy to be on the side that's proposing, at this stage, because there are no alternatives. But just in case there are people listening, they'll listen to the various speakers here—and I'm now following the ACT Party. Now, the ACT Party—there'll be accusations, there'll be people yelling meaninglessly across the House, as we're just hearing now, but I'd just like to quote a little interaction that took place on the radio today—on Radio Live—where one very distinguished New Zealand economist Shamubeel Eaqub was speaking, in fact, with the leader of the ACT Party. And during the leader of the ACT Party's continual accusations that somehow this Government was responsible for inflation, Mr Eaqub shook his head during most of Mr Seymour's speech, saying it made him angry to listen to, calling it "economically illiterate": "It is not Government spending that is driving inflation. We had the UK hit 9 percent inflation yesterday because there is a global inflation crisis. Yes, we should talk about inflation, yes, we should talk about Government spending but you can't just tell lies about what's going on in the economy. [The] whole thing that… is wasteful Government spending that is causing inflation is simply not true. If you're ACT you can say there are parts of the spending that we don't like, and we wouldn't do that because it doesn't add value, it's not efficient. That's fine. But don't do it on the basis of what I think we completely wrong to things to say," Eaqub said to Newshub. 
David Seymour: Point of order, Mr Speaker. 
GREG O'CONNOR: So, those who are listening to that—
Hon David Seymour: I hope that Greg O'Connor didn't mean to accuse me of lying—
ASSISTANT SPEAKER (Ian McKelvie): In fact, I don't think he did.
Hon David Seymour: I hope not.
ASSISTANT SPEAKER (Ian McKelvie): I think what he did was quoted someone else—
Hon David Seymour: Who did, and read it—
ASSISTANT SPEAKER (Ian McKelvie): And he's entitled to quote someone else. He certainly wouldn't have accused you of lying, himself.
Hon David Seymour: —into the record, because—
ASSISTANT SPEAKER (Ian McKelvie): Order! 
Hon David Seymour: —the British have spending too.
ASSISTANT SPEAKER (Ian McKelvie): That's enough—that's enough.
GREG O'CONNOR: I will never be the only person to do that, Mr Speaker. Anyway, I'm a fairly conservative sort of a chap, and a lot of the accusations here are about the spending today. Going back to when we first had COVID and we were looking at, basically, shutting down our economy, we were looking at giving workers or businesses the wage subsidy, and I struggled to get my head around—I'll be quite honest—that we could do this, and it would turn out to be the best thing we could have done, not only for health but for the economy. But, actually, it turned out to be absolutely the best thing we could have done, and, even, I think, the greatest detractors of our Government across the other side will think that that's the case. Now, come forward two and a half years, we are at another crisis, and a crisis that I won't repeat that's happening around the world—although I will repeat our economist's facts about what's happened in the UK: projected to get to near 11 percent by the end of the year. So we are in another crisis, and we've got to look at a pragmatic approach to it, because the losers of that are ordinary New Zealanders. 
Now, those who are going to speak after this, from the other side, just imagine a world where none of these things had happened. Imagine we didn't have the winter energy payment. Imagine we hadn't increased benefits. Imagine we didn't have tax relief at the pump. Imagine we hadn't halved public transport. Where would we be? The accusations being made across the House there is "Get more money into the hands of New Zealanders", which is exactly what we're doing. 
On a select committee I'm on, we've had the shipping companies in, we've had the port companies in, and the general belief that the crises we have in supply chains—caused by a shortage of ships, caused by a shortage of containers and, latterly, caused by China's shutting down their ports—are things that actually can be relatively temporary. The other thing I would ask those who are going to stand up and cast aspersion on this, say: what would happen if the Ukraine war were to end in the next month? I suspect that those petrol prices that we drive past every day would very quickly go down. 
So this is a world that there are things that could happen, are likely to happen, that actually could have us in exactly the same place as we were after the lockdown, after the wage subsidy in particular that, actually, we'll look back and say that this was the best thing we did for New Zealanders. In the past, we gave that money to the businesses; now we're giving it to people. In fact, those that are great believers in the trickle-down theory might just stop and think that maybe what we're doing here, and what we've so successfully done, we've actually introduced the "trickle-up" theory. So I'm very happy to support this. 





Hon PAUL GOLDSMITH (National): My pleasure to speak on this bill—although not a great pleasure, in the sense that we are not supportive of this bill and we're not supportive of this Budget. Fundamentally, we don't think their plan for dealing with the cost of living crisis that New Zealanders face is any good, and our plan would be a lot better. That's why we're standing up for our plan, which is actually about leaving more money in the hands of New Zealanders, not using inflation that has been partly created by Government activities, partly by global factors, to sneak more taxes out of the hands of New Zealanders.
So if this Government had adopted National's policy of just simply adjusting the tax rates for inflation, Kiwi households on the average income would be $1,600 a year better off. So they've taken that extra money from their pockets and then they turn up at the Budget and say, "Oh, you should very grateful because we may give you a cheap bus fare for two months and possibly a cheap railway fare for a couple of months, and some people will get a winter payment, but if you're on the average wage, tough luck—you're not getting anything."
So if we go back to what this Budget was all about: Labour, I think, up until about a month ago, had their clear plans that the Budget was all about climate change and health restructuring. They're going to spend a lot of money—billions and billions of dollars—restructuring the health system just as we're coming out of a COVID crisis, which nobody thinks is a very smart idea, but there's billions of dollars being spent on all that and, unbelievably, no measures of actual outputs of what we're going to get which is better for all that money. That doesn't seem to be an issue at all.
So they were going to talk about climate change and health restructuring, and then, I think, about four weeks ago, they woke up and thought, "Aw heck—aw heck. The issue of the day is actually a cost of living crisis and we haven't done anything about that. Maybe—maybe—people aren't so focused on those issues right this moment when they can't afford to buy a block of cheese and they can't afford to pay the rent and they're wondering how they're going to feed their family and have an opportunity to get ahead. Maybe we might have miscued and maybe the $6 billion of extra spending—the biggest amount of extra spending in the history of New Zealand all focused on other things and not to help New Zealanders deal with this cost of living crisis. Maybe we may have miscued!" and so what we see, is, on top of the $6 billion, they suddenly came up with an extra package. I think they scrambled it in, very late in the piece—that's partly why there's no great deal of information backing up this piece of legislation. So they scrambled it in, added it on top with a little bit of cherry and cream, and said, "There you go, New Zealanders, you should be happy because we'll give you an extra two months of cheap bus fares and if you're very lucky you'll get a short-term bit of help with winter energy payments."
Well, New Zealanders deserve a lot better than that. New Zealanders deserve better than a backwards Budget that is taking this country backwards, back into debt, back into slow growth, and also New Zealand families going backwards where the cost of living and inflation is going forward faster than wages, so that New Zealanders are going backwards. The only thing going forward in this country right now is those stolen vehicles driven by 11-year-old kids, ram-raiding shops up and down the country. That's the only thing that's going forward!
This Government has just missed so many opportunities to help New Zealanders. You don't see anywhere, in any of the Budget material, is a plan to get the country growing more quickly, to actually generate more money; it's all about restructuring and redistributing money from those who work. Nowhere do you see—apart from a slimmed-down version of Shane Jones' original growth plan, which I have no confidence will be well thought through or anything like that—anything about the regulatory reform, the plan for growth that New Zealanders need to get ahead. The recipe for that is pretty simple, it always has been the same, which is to provide a stable, predictable environment where people feel confident to invest, where they know that the rules aren't going to be changed underneath them all the time, and where they're not overtaxed and over-regulated so that New Zealanders can get ahead and actually back themselves to succeed globally.
All we hear in this backwards Budget is more costs, lots of money being spent, and no accountability for the outcomes. That's why this bill is not what we need. National has got a better plan which would leave more money in the hands of New Zealanders' pockets.





WILLOW-JEAN PRIME (Labour—Northland): E te Māngai o te Whare, tēnā koe. Thank you for the opportunity to speak after our finance Minister just delivered a wonderful Budget. I'm really proud of the tough job that he has balancing everybody's wants and needs, and we are here in the Chamber this afternoon, passing the first piece of legislation, under urgency, to give effect to those Budget announcements.
We are here debating the Taxation (Cost of Living Payments) Bill. I take this opportunity to take the Māori Party's call this afternoon. This particular bill is so that we can give effect to the announcement that we will be introducing a payment of $350 to help middle-income people cope with the current inflationary pressures. I have heard from my constituents about the impact that the cost of living is having on them and their whānau and so I know that this announcement today is going to make a real difference for those whānau. That is on top of the package that we already introduced, and have been implementing, on 1 April, which boosted support for families through Working for Families, the family tax credit, Best Start, and expanding childcare assistance. It also boosted the student allowance and the student loan living costs. We've also lifted the minimum wage, reduced the cost of fuel, and increased superannuation, and we have kick-started once again the winter energy payment.
Today, those who are not receiving any of those things I have just mentioned, which is approximately 2.1 million people, will be eligible for a payment of $350. The income cap for that is $70,000. The reason that is the cap is because that is around the average annual wage, and I have heard from people who have contacted me about what we're doing for those on middle incomes. This is what we are doing to help you, who, we know, are also impacted by the cost of living crisis. Approximately 2.1 million people are going to benefit from today's announcement once we pass this legislation through the House this evening.
One thing I want to add to that is that there will be no application process. That's one of the things that I often find when we make these announcements—people straight away ask where they apply and what they have to do. The Inland Revenue Department are going to be able to use the information that they are already able to gain, under the authority they have, to be able to determine those who will be eligible for the payment, and it will be processed.
I don't want to prolong this contribution in the first reading. We've got plenty to get through over the course of this evening and possibly tomorrow. So with that, I commend the bill to the House.





INGRID LEARY (Labour—Taieri): I received emails and Facebook messages this afternoon from Gina, Zaha, David, and Ahman—I hope I pronounced that correctly—saying thank you to Grant Robertson for the cost of living payments. I said I would pass their thanks on because they are constituents in my Taieri electorate in South Dunedin and South Otago who will benefit from these cost of living payments, who have felt pressure from the cost of living because 37 percent of people in my electorate over the age of 15 earn between $10,000 and $30,000, and only 13 percent earn more than $70,000. So this $27 a week will mean much more than the proposed tax cuts by the National Party. My constituents, many of them in that bracket will get $350 per adult in three monthly payments from 1 August. They are the people who are earning under $70,000 who don't qualify for the winter energy payment. So that is getting money where it is really needed, and if we put that together with those who do get the winter energy payment across New Zealand, that equals 81 percent of people receiving targeted support. That's 2,136,000 people. So that is part of a plan that we have to take away the short-term pressure that has been caused by short-term inflation. 
Let's look at what National's plan is. Well, it doesn't actually have a plan apart from tax cuts for the rich. So their plan would give about $2.50 a week in tax cuts for the lowest-paid workers, $18,000 for leader Chris Luxon if he was to become Prime Minister, and a $270,000 tax cut for Mr Luxon had he still been the chief executive of Air New Zealand.
Hon Member: Per annum.
INGRID LEARY: Now, that's per annum—that's right. And if they had to go into Government with ACT, which is highly likely, they would have to freeze the minimum wage because it's what David Seymour has said, and reverse climate change initiatives. We know that climate change is the biggest existential threat that we have at the moment. They would reverse that, and Mr Luxon has not ruled out actually abolishing several of the ministries that serve our people, including the Human Rights Commission, Ministry for Women, Ministry for Pacific Peoples, Ministry for Ethnic Communities, and Ministry of Māori Development—all ministries which have received funding in today's Budget to make sure that we leave no New Zealanders behind. 
I am proud and congratulate Grant Robertson for this balanced Budget because he's done this in an environment where the global economy has been volatile. We've seen inflation in the UK shoot up overnight to 9 percent. That's a 40-year high. But with his prudent fiscal management, he has been able to continue to put people first. We can support low and middle income New Zealanders, and that is also from the work that all New Zealanders have done to pull together during COVID to make sure that we keep New Zealand going, and I really want to thank all New Zealanders for doing that. 
The fourth Wellbeing Budget talks about a secure future. It's a long-term approach. It takes a long-term approach to health and climate, but we have seen these cost of living pressures on people. It is not stagflation, and anyone who doesn't believe me, just look at the Reserve Bank report and their appearance in front of our Finance and Expenditure Committee meeting last week where stagflation was asked about repeatedly. They said it is on their radar; it is not currently a threat to New Zealand, and anybody who tries to say that is talking it up. These are temporary pressures and they need swift and temporary solutions, and that's what we're doing by passing this legislation under urgency so that we can get money into the pockets of New Zealanders to make a difference as quickly as possible. That's 1 August and that will be targeted support, along with the two-month extension to the fuel tax cuts, there is also the extension of half-price public transport, and for those people on community service cards—and there are many, many in my electorate—they will be able to use their Community Connect, which means they will permanently get half-price public transport.
That is going to be an absolute game-changer for people in my electorate, people have lobbied me for many months saying, "Please, can I have changes to public transport." so they can get out and about. It will help their wellbeing. It will help them studying at the university. 
So to those people who contacted me this afternoon, thank you so much for passing on your good wishes to our Government. I just wanted to share that with the House tonight and to say congratulations to Grant Robertson for an excellent Budget in a very difficult time globally.





SIMON WATTS (National—North Shore): Thank you very much, Mr Speaker. It is a pleasure as the member of Parliament for North Shore and part of the National Party to talk on the Taxation (Cost of Living Payments) Bill first reading.
For those watching at home, we've only received this bill within the last half hour to 45 minutes or so, so you will appreciate that most of this is pretty new. But when you look through this bill, this Government has had a significant amount of time to put together a piece of legislation to deal with a cost of living crisis that has been impacting Kiwis across this country for a very long time. But when you get into the detail of this bill—and I'm looking forward to future stages, and I look across there to the Minister Parker—there has not been much detail done on this bill. And that indicates to me—it indicates to those watching at home and those stakeholders who have not been consulted on this bill—that this has been put together in a rush. These guys are panicking. They are seeing the numbers on the walls, they can see the polling data, and they have worked out, "Surprise, surprise, we've got nothing in our tool kit which deals with the cost of living crisis." And that is a big issue for them.
So what is their solution? Well, you'd think, let's do something of substance. Let's do something that's actually going to impact those individuals across this country that are just so heavily impacted, those ones that are struggling to pay their mortgage as a result of interest rates increasing by 2 percent, those that are paying a lot more at the pump or those that are paying a lot more for food when they do their weekly shop with groceries. So what this Government have decided to do is they've decided to do a bit of a lolly scramble, a bit of a sugar hit, and say, "Here you go. Here's $27 a week, $350 one-off, that's it. By the way, we're going to take away the other benefits we've given you around extending the fuel excise and halving public transport fees probably in the future. We'll do this as a bit of a carry over and good luck."
Well, I tell you what, I've probably only had about 45 minutes to look at this bill, but I've had enough time to look at a one-way flight to Sydney, and you know how much that is, Mr Speaker? On 1 August, when this bill comes into effect, it's $300. So I tell you what, they've got $50 to buy a packet of cashew nuts when they get to the shop at Auckland Airport before they leave this country in the brain drain which will result because Kiwis no longer have confidence in this country being able to deliver for them, and that is because of that Government over on that side.
I tell you what, for the ones that decide not to leave to go to Australia on 1 August, they're going to use this money to buy 9 litres of petrol every week for their Toyota Corolla. That's all it pays for: 20 percent of a tank of fuel. That is absolutely nothing for these things. Or maybe they might decide, "I'm going to go into the supermarket, and with my $27 I'll buy one block of tasty cheese and I'll buy three litres of milk." That is it.
And when you look at the criteria of this bill—and I can tell you what, this Government have not done the detail, and I'm not surprised, because they are not over the detail. They do not have the capability in this space, and it is coming out of this bill like you would not believe. The criteria is pretty much undefined. I'm looking forward to the future stages to be able to question the Minister around, actually, what information does Inland Revenue have in order for them to be able to assess the criteria for these payments to be made by 1 August? I'll let you in to a little bit of a secret: they haven't got all the information required in order to make those payments by 1 August. That's why they're waiting for 1 August, because they can't make it happen tomorrow. They have not got all the criteria and information and the data required, and that is because they've just worked out this policy pretty much last week. That is the type of lack of planning from this Government, and this bill personifies the attitude on that side of the House of a Government out of touch; a Government not willing to listen to Kiwis. They haven't even consulted on this taxation bill with people outside of Government. What is going on? It is a band-aid Budget, and Kiwis are going backwards.
I had a look at the eligibility, and, of course, you have to, according to this—and I'll go into a little of that later on—earn under 70 grand a year to qualify. Well, there is 495,000 Kiwis who earn between $70,000 and $100,000. And what about that point that was made by the ACT member before around the fact that "low to middle income" has not even been defined by Treasury? This is an absolute scam. It is not dealing with what the title of the bill says around impacting and benefiting low to middle income New Zealand. It excludes a whole lot of people. The criteria, actually, will end up to say that, actually, a large number aren't going to get it.
And then they have to work out both New Zealand tax resident and present in New Zealand. So what does that mean? Does that mean I can't go on holiday for three months? Does that mean if I've all of a sudden gone over to Australia on the day that this is eligible, I can't get the payment? Have you seriously thought through this bill? No they haven't; they've made it up last week. That is what's happening in this country.
We have got a Government that is making up as they go along. And you know what? That is such a huge disgrace for my children and for my grandchildren that will inherit the significant amount of growing debt by this Government, sitting around 41 percent before you adjust it to the lower number that looks a lot better. They are going to inherit that. Total borrowings have clicked over $200 billion. That is the legacy of a Government who are spending like there is no tomorrow. That is the legacy of a finance Minister—Grant Robertson—who is addicted to spending. And you know what? When you're addicted to something, you can't get off it. And he is going to keep on spending all day long. And that is a real concern. That is a concern for hard-working Kiwis like the people in my electorate of the North Shore, or down in Southland at the bottom of the South Island, or Invercargill or in Auckland Central or wherever you are across the country—
Hon Carmel Sepuloni: What about South Auckland and West Auckland, are they hard-working as well?
SIMON WATTS: —because those Kiwis are hard-working and they are not going to benefit.
And, of course, I can hear the Minister over there yapping on about something. I can't hear her in detail, but I'll read the criteria, because who are not eligible or qualify for this payment, of course, include sole parent support, those on the jobseeker support, student hardship, emergency benefit, superannuitants, all those individuals are excluded from this $27 a week payment. So on the outside, this looks like a really nice thing to do, but I tell you what, when you scratch the surface—like what you do when any of you, any time you scratch the surface on this Government's policy—the truth comes out. And what we can see is this is a policy that is not going to deliver the benefits required for middle New Zealand and those that are squeezed so hard.
What is so disappointing is, again, the fact that this has been so poorly planned. And we have had a long opportunity and chance in order to be ready for today. It is no surprise that we face a cost of living crisis in this country. We have had ample opportunity to consult, to engage, to listen, to be informed by Kiwis in terms of what they are facing in terms of the challenges that they face day in, day out. But have that side of the Government used the time that they have been given to do the simple task of getting out of their offices in Wellington and listening to hard-working Kiwis? Well, the simple answer is no. And this bill proves the fact that they have not done their job.
We've mentioned in terms of where we could be today if they had only taken on some of the advice around National's economic plan: a plan that takes into account fiscal responsibility, a sensible and pragmatic plan that puts money in the back pockets of hard-working Kiwis, a plan that will actually benefit those across this country who are contributing a significant amount. But they have squandered that opportunity, and that is a great, great issue in itself.
I want to end with a fact that the spending today was in the region of $6.5 billion of increased spending—increasing to $7.5 billion next year. That is an absolutely horrific scale of expenditure. And the challenge is that will not deliver the outcomes that Kiwis in this country deserve, and that's why National oppose this bill.





GINNY ANDERSEN (Labour—Hutt South): Getting a lecture from National on the cost of living feels a bit like getting tips on frugal living from the Kardashians. I struggle to take it seriously.
I definitely struggle to take it seriously because this bill provides here-and-now support for those people facing a cost of living crisis in New Zealand. It provides $350 in the pockets of middle New Zealanders over this winter and that is what is needed right now. I would like to acknowledge Grant Robertson for delivering a fantastic Budget that delivers right now what we need and continues New Zealand on the right track. Our economy is one of the strongest in the world, with a triple A credit rating, record low unemployment, and lower debt right now than Australia, Canada, the United States, and the United Kingdom.
However, despite those positive results, we know that global inflation pressures are hurting New Zealand families right here, and the world remains an uncertain and volatile place. That is exactly why Budget 2022 provides further relief to those on lower and middle incomes in New Zealand to help pay for food, to help pay for petrol prices, and to help pay for energy bills until inflation is brought back under control.
So what is National's plan that we've heard so much about? National's plan is to point to the global phenomenon of inflation and blame the Government for that and to say quite a lot about fiscal discipline—a lot—but will not actually say what they'll do about it.
But I'll tell you what: you only have to look back on National's track record in the history of New Zealand to see what they do. They cut health, they cut education, they cut housing, and they cut welfare into those areas. What they do is what they've said already: put money in the pocket of those top brackets of New Zealanders. Offer no real solution except for tax cuts—that's all we've heard.
An interesting fact is that money—that $350 that we've heard today in the House that will not buy very much—is still far in excess than what that family would receive under a National programme of tax cuts. It is far more than what they would receive under that programme.
So it's a sad thing today that those members opposite will vote against a bill that provides here-and-now support for middle New Zealand families, and I find it quite trite that they vote against that and still cry aloud. The payment is a temporary measure to provide short-term support for those individuals who earn up to $70,000 in the tax year who are not receiving the winter energy payment already.
The income cap of $70,000 has been set to provide for those who provide around the median wage of $65,000 a year. The group we're targeting is specifically those who are less likely to have had those increases on 1 April that have already come into force, and to provide more help for those who haven't been able to receive Working for Families and the increases in the minimum wage.
Approximately 2.1 million people will be eligible for the payment and that's a significantly large amount of New Zealanders. The total payment of $350 will be split into three monthly payments of around $116 each, beginning on 1 August, and will be paid by the Inland Revenue.
Now, we know for a fact there is no silver bullet fix to inflation and the rising cost of living in New Zealand. But we are taking a range of actions. We've cut fuel tax to provide immediate relief for Kiwis as the war in Ukraine drives up prices. From 1 April, we're increasing support for families, pensioners, and students, and, in May, our winter energy payment restarts, giving the 1 million people an extra boost to help with their heating bills.
From the day we came into Government, we've worked hard to lift wages, to reduce cost pressures on Kiwis through measures like cheaper doctors visits, free lunches in schools, and a family tax credit. I'm proud to be a part of a Government that delivers a Budget that keeps New Zealand on the right track and provides the support to those people who need it the most.
I commend it to the House.





A party vote was called for on the question, That the Taxation (Cost of Living Payments) Bill be now read a first time.
Ayes 65
New Zealand Labour 65.
Noes 42
New Zealand National 32; ACT New Zealand 10.
Abstentions 10
Green Party of Aotearoa New Zealand 10.
Motion agreed to.
Bill read a first time.





Second Reading
Hon DAVID PARKER (Minister of Revenue): I move, That the Taxation (Cost of Living Payments) Bill be now read a second time. 
I'm going to start with a quote from Audrey Young on Budget 2020: "Robertson's $1 billion cost of living package, including a $350 payment for those earning under $70,000, to address immediate inflation pressures is a good one and well-designed, politically. It is hard to see how the National Party could oppose it (although it will) when cost of living pressures consumes its political agenda these days. Labour's Budget measure of payments is targeted, it gives the lower-paid more than National's"—[Multiple interjections] Sorry, I'll say that again for the member: "Labour's Budget measure of payments is targeted, it gives the lower-paid more than National's tax-indexation plan, and it is temporary … The Budget cements Robertson's credentials as careful economic manager, for good times and bad, the Goldilocks manager: not too much, not too little."
It's so hard when you're a member of the National Party, born to rule but languishing on Opposition benches, completely irrelevant, not even able to implement their flawed economic plans. They're left with jingoistic messages and misrepresentation of both the current state of the economy and their own history over the years. You know, the National Party seems to always forget that average growth rates under Labour administrations compared with under National administrations—Labour does better. This is not just the short-term average; this is an average that goes back to World War II. Since World War II, growth rates are better under Labour administrations than they are under National administrations.
The tone of gloom from those depressing, if irrelevant, speeches from the National Party in the first reading—it ignores the fact that we've just had two triple A credit ratings from the top credit rating agencies in the world. Did you hear the National Party make any reference to that? No, no. Unemployment rate—did you hear them celebrating historically low unemployment rates of 3.2 percent per annum? No—3.2 percent unemployment rate, historically low in New Zealand, and the National Party cannot acknowledge or celebrate it. They talk about Government debt—Government debt—
Hon Paul Goldsmith: What's this got to do with the bill?
Hon DAVID PARKER: What's this got to do with the bill? Well, it's got as much to do with the bill, Mr Goldsmith, as it had in your contributions from your side when you rattled on about Government debt, which in New Zealand is half the rate of Government debt as a percentage of the economy in Australia, a quarter of that of the United Kingdom, and a fifth of that of the United States. 
Then they said—and this is to quote one of the last speakers for the National Party—"spending like there's no tomorrow", "addicted to spending", "a horrific scale of expenditure". This sort of exaggerated rhetoric from the National Party falls on deaf ears amongst the public because they know it's not right. 
I thought I'd drag out the record of the National Party under Bill English and their expenditure as a percentage of GDP compared with the expenditure of this Government in this Budget as a percentage of GDP. This Budget projects expenditure of 31.6 percent of GDP. How does that compare with the National Party's expenditure? Quietness from the other side. Perhaps they've forgotten. I'm quite happy to remind them: 2009-2010, 32.3 percent. They'll say, "Oh well, that's just after the Labour Party left office." OK, fair enough. What happened the next year? It went up: 34.1 percent of GDP compared with this year, 31.6 percent of GDP.
I see the Speaker wants me to come back to the bill. I will do—I will do. This bill promises 2.1 million New Zealanders a payment of $350 each, spread over three months. This will help New Zealanders facing cost of living pressure. It is very, very good. It's equivalent to $27 per week over that period, and it's much more than the National Party's alternatives that they have been speaking of. 
The legislation is necessary because at the moment the revenue department has not got the ability to use information that it holds for tax return purposes, like bank account numbers, for the purposes of this payment of $350. We want to get this payment out to people as soon as we can, and, in order to do that, we've got to give the revenue department the powers that they need to do it. There are a number of technical amendments that are made through this legislation, which I have no doubt that we will have a discussion about in more detail in the committee of the whole House stage. 
Far from spending like drunken sailors, as has been alleged, we have a very balanced Budget here, although it's primarily focused on expenditure in the health sector. There is cost of living support here—a package that totals $1 billion, the largest part of which is $800 million, which relates to this $350 per person paid to over 2.1 million New Zealanders. 
I find it absolutely astounding that the National Party, after all of their rhetoric about being on the side of the pressed middle, is opposing this legislation—
Todd Muller: Squeezed middle.
Hon DAVID PARKER: The squeezed middle—the squeezed middle. And they are squeezed by inflation. We agree with that. The Budget projections show that, in out years, wage growth again exceeds inflation. Of course, in the Labour Party we don't have a problem with people getting wage increases, which the National Party seems to squeeze when they're in Government and have very low rates of wage growth. 
So I commend this bill to the House in the second reading and look forward to the committee stage
ASSISTANT SPEAKER (Ian McKelvie): Members, the time has come for me to leave the Chair for the dinner break. The House will resume at 7 p.m.
Sitting suspended from 6.02 p.m. to 7 p.m.










Hon PAUL GOLDSMITH (National): Well, thank you, Madam Speaker. Thank you for the opportunity to speak. We've had the dinner break. We've all watched the news and reporting of this Budget, which has flocked across the country. The previous speaker referred to Audrey Young's glowing reference to the "Goldilocks Budget". I'm afraid, being the true Goldilocks around here, that Audrey was a bit off beam there and what we've seen, actually, throughout the rest of the country is an incredulity that this Government could take so much money off the hands of New Zealanders with extra taxation, with proposals for a new jobs tax coming around the corner, and then expect everybody to be happy with $350—to some people. Some people have been unkind enough to suggest that's about almost an economy flight to Sydney to start a new life in a place where hard work and enterprise gets better shrift than it does under this Government. And so we're absolutely focused on the cost of living crisis. 
There's been no debate in this House this evening around the issue facing all New Zealanders, and that is this cost of living crisis that New Zealand families are facing, the difficulty of funding their way through to pay for the food on their table, the gas in their tanks, and to make ends meet. The only difficulty, and, I suppose, the only complication, is that the members of this Government, the Ministers in this Government, and the backbenchers who are sitting over there hanging their heads wondering about what their future is going to be—the only surprising thing was that those people, those 50-odd New Zealanders, were the last people to wake up to the fact that there was a cost of living crisis in this country and that's what people were focused on. And so their plans for this Budget all along were to focus on climate change and the biggest health restructuring in the middle of a COVID crisis. And that was the plan for the Budget and it was all sweet. 
Then, about three or four weeks, maybe a couple of months, ago, perhaps related to the publishing of some polls—I don't know—the Government suddenly woke up and thought, "Heck, we haven't done anything about that that, in any remote way, addresses the issue of the day, which is the issue that is most in front of mind of all New Zealanders: how do we actually make ends meet? How do we deal with the fact that prices are going up everywhere and it's harder to make a living and it's harder to keep food on the table?" There was nothing really planned, and so they threw together this last-minute piece of legislation that we're dealing with today, which, along with a couple of cheaper bus fares for a couple of months, and another couple of months trying to deal with the issue of petrol prices and diesel prices, which will all be welcomed—but all they're doing is applying a band-aid on to a much deeper, long-term situation, which is the fact that inflation has got out of control in this country and that New Zealanders are going backwards under this Government, and inflation, the costs of goods are going up faster than wages. Therefore, as everybody can see, everybody can understand—it's as obvious as the nose in front of your face—New Zealanders have been going backwards under this Government. As I said in the previous speech, the only thing going forwards is the stolen cars driven by 11-year-olds into ram raids. That is not what New Zealanders are hoping for or looking for, and they're looking for a Government that understands the importance of having a strong economy, fighting inflation, and ensuring that wages are going faster than inflation. 
So this legislation comes in and brings in a $350 payment. That's their plan. That's their belated plan to deal with the cost of living crisis, and we are voting against it quite simply because we think our plan is better. Our plan is to leave more money out of the pockets of New Zealanders, not take like this Government is doing sneakily. Every week, every month, this Government is stealthily putting up taxes. They're increasing taxes because they are not adjusting the tax thresholds for inflation. And over the course of a year it adds up significantly, to the extent that the average household on an average income have had $1,600 dollars a year of extra taxes taken off them by this Government to fill Grant Robertson's insatiable hunger for more tax revenue. This Minister, this Government, Grant Robertson has been the most rapacious tax collector in this country's history. I thought nobody would ever beat Michael Cullen, but he has. There is never enough tax for this Government because they will always spend more, and we're always going to be left with larger deficits and they're going to be wanting to spend more. 
Now, New Zealanders can, quite rightly, look at this situation and say, "Well, there are some things that we could usually spend more money on, but it's just a pity that there is no connection between the spending and the delivery in this Government, and that's the slight problem." And so when they see the billions of dollars that are going to be thrown at the health system, there is no confidence that it will lead to better outcomes, because we all looked, two years ago, to $1.9 billion promised on mental health and there has been no actual improvement in the services available to people who need the mental health work in so many areas. So people are rightly sceptical of the potential for actual progress from all the money that has been spent. Everybody agrees that New Zealanders are doing it tough right now. Everybody agrees that we need to put more money into the pockets of New Zealanders so that they can deal with the rising prices and cost of living crisis. 
The difference is that on our side we believe that actually a very simple way to start is to stop taking quite so much money in the first place and not use inflation to stealthily and sneakily take more taxes from New Zealanders, as this Government has. That's our proposal. This Government, instead—"No, no. We're going to keep on putting taxes up. Every month, every year, we'll just sneak a little bit more. We'll use inflation." That's why tax revenues are flooding into this Government. "We're going to use it all and spend it"—on a very poor quality spend most of the time. "And in the meantime, because we're a little bit worried about the broader issue, we'll extend the cheap bus rides for an extra couple of months and we'll extend the winter payments for $350. And if you're earning the average wage in this country, tough luck. You're too rich. We're not interested in you."
That is not the message that New Zealanders want to hear. It's not the messages that we need to be hearing in this country. That's why we won't be voting for this band-aid economics that the Labour Government seems to have picked up. Throw a little bit of sugar around for a few months, hope for something to turn up, and kick the can down the road. I don't know how Mr Robertson and his team are going to wind up all the extra help on the diesel and the petrol. It's going to be interesting. When it comes to an end in a couple of months, what are they going to do? That's going to be quite difficult for them. The point is what they're not prepared to do is to give back some of the taxes that they keep on taking from the pockets of New Zealanders. 
So he's clearly thrown this together at the last moment just before the Budget to deal with the issue of the day, which hadn't really been on their radar up until then. They've been focused, as I said, on a massive health restructuring that continues to leave the whole health sector in a state of complete chaos in the middle of winter when we're dealing with COVID. If we think of, even, the Upper Hutt Hospital situation, the people that are supposed to be dealing with it are about to lose their jobs—they're about to lose their jobs and they're supposed to be dealing with a health crisis. They're going to be replaced in six months and there'll be a whole lot of emails in the inbox of this new organisation for some manager that will appear from somewhere, and they'll have to figure out what's going on while everybody else has left the room. So it's a bizarre situation there and that's where most of the new money in this Budget has gone: into feeding this great beast; the most ill-timed restructuring that you could possibly imagine. 
And in the meantime, the Kiwis who are doing it tough in Kaitāia, in Whangārei, in Huntly, in places all around the country, looking at the price rises, going up, looking at all the pressure that they're under in their households, particularly the hard-working families who are both working hard, getting an average income in New Zealand, getting 70,000, 80,000 bucks a year, working hard, trying to provide for their family, feeling like they're not getting ahead because of the increased rents that they are having to face. Rents have gone up substantially under this Government.
Chlöe Swarbrick: Shall we do rent controls, Paul?
Hon PAUL GOLDSMITH: They've—pardon me?
Chlöe Swarbrick: Shall we do some rent controls, then?
Hon PAUL GOLDSMITH: Well, that's a typical response from the Greens. Rather than deal with the driving causes of the housing going up, all the costs that they've added on, the idea that they're suddenly had, that if you pile costs on to those who provide the housing, there is perhaps the slight possibility that some of those costs will be passed on to the renters! That seems to be beyond their logic to understand that that is a possibility: if you add a whole lot of costs on to landlords, there is a slight possibility that some of those costs will be passed on to the renters. That, indeed, is what's happened. They spend their whole time advocating for more costs, and then they complain about the fact that the price goes up, and then the solution to it is to put some rent controls on. I mean, there goes the Greens. 
It's a funny thing for this Government that their coalition partner, the Greens, couldn't even bring themselves to vote for this legislation. So we've just had the Budget and they've stood there and they've said, "Oh, how wonderful we are. We're a Government with the Labour and the Greens.", but the Greens aren't voting for the first piece of legislation that they've brought through. That's how muddled this Government is.
ASSISTANT SPEAKER (Hon Jenny Salesa): Order! Order! The member's time is up. Before I call the next speaker, may I ask the member of the ACT Party to take his pink box off the desktop, please.
Chris Bishop: He's not the leader.
Damien Smith: Sorry, Madam Speaker.
ASSISTANT SPEAKER (Hon Jenny Salesa): I said the "member", not the "leader".





Hon Dr AYESHA VERRALL (Minister for Food Safety): It's a pleasure to take this call on the Taxation (Cost of Living Payments) Bill and be the first Government speaker after the dinner break on this Budget day.
Look, we've all had the chance in the Labour Party to partake of some KFC with our colleagues from the Greens and Te Paati Māori, but the Opposition, instead, decided to go and have a peek at what the major news outlets had to say about the Budget instead, and we heard that in Paul Goldsmith's comments. They would've have been disappointed to hear Newshub describe the Budget as a masterstroke by the Government and that the Opposition has been backed into a corner, and indeed they have been. They've been caught flat footed by the cost of living package in this Budget. Here they are voting against a bill that will see $350 paid to low and middle income families over the coming months. It will do a lot to address the pressures that people are under, alongside the measures to support free, reduced costs public transport, the winter energy payments, and our actions on fuel costs.
This Budget is about protecting our security as a nation, and it extends the Labour Government's efforts to protect our people, just like we did through the pandemic, against threats from outside. If you think about that, we have done that through the pandemic and we continue that in the face of this economic crisis. So the pandemic has led to both supply chain problems and then that was compounded by Russia's illegal war in Ukraine, causing rising inflation in New Zealand and also across the globe, putting economic pressure on families. This Government bill is about providing cash to alleviate the pressure on the cost of living for people earning less than $70,000 and who are not eligible for the winter energy payment. Just like in the pandemic, we are protecting people—that's what this bill does: contributes to our security.
Now, you might ask, "Is it enough?" It is a contribution and other important contributions are made through other measures. It will help 2.1 million people, and students are eligible for this help. Now, the Opposition have a different policy. They have proposed tax cuts that will benefit our wealthiest earners to address the pressure on the cost of living. That won't help low and middle income earners. And, in fact, that approach has been criticised by the IMF who advises against tax cuts at this point. So there is no economic basis to the opposition to this bill, or to the Opposition's tax policy. This balanced Budget has presented. It is targeted at those who need it most without making inflation worse.
When I look across the Government's agenda, I see that this approach of securing our people is widespread throughout the Budget—for example, another disruption of people's security and their livelihoods is threats to their health, and yet we have strengthened our health system through this Budget. We have addressed inequities that have been profoundly unfair throughout our history by funding and developing a Māori Health Authority. We have cleared the DHB debts that have constrained them for far too long in terms of taking new measures to protect the health of their people. We are investing $61 million in public health systems that'll ensure we don't have to reconstruct an underfunded public health system in the face of a pandemic ever again. We are ensuring that the system is responsive to those it has never served before, and I'm thinking particularly about our measures for the rainbow community or for people who suffer with dementia.
Another threat to our security is climate change; in fact, in many ways you could describe it as the mother of all threats. It causes sea-level rise that endangers our homes, it damages ecosystems on which we depend, and it damages crops and our food supply. This Budget, through the emissions reduction plan and associated funding, secures us against the risk of these threats. We have a number of initiatives, including to promote the transition to electric vehicles, to reduce methane emissions in agriculture through investment in science, and through improving the use of biofuels and renewables in our energy supply. Budget '22 secures a positive future for New Zealanders. It is not too late for the Opposition to change their votes. I commend this bill to the House.





SIMON WATTS (National—North Shore): The last speaker—the Hon Dr Ayesha Verrall—says, "It's not too late for the Opposition to change their mind." Well, I want to let her into a little bit of a secret, and that is the Opposition will not be changing their mind. We are strongly opposed to this bill. It is a great shame, because, normally, as bills go through this House, we would have had the opportunity to go through a select committee process, and I'm sure, looking at this bill, it would have gone through the Finance and Expenditure Committee, of which I'm a member—and I see a number of my colleagues around the room in there. But, of course, this bill has not been through any due process. It has not been through a select committee process, and so we are here, under urgency, reviewing a bill which is absolutely full of holes.
This evening, in my short call, I'm going to run everyone through, at home, where the issues are in this bill. And I want to reinforce to those people at home that think that this Government has got a plan, that this Government has been thinking about this bill for a long time, that this Government, when they drafted this bill, have considered a lot of options and have been very thoughtful—I'm going to, sadly, put the facts on the table to show that, actually, this bill has been made up on the hoof. It is a bill that has been made up, probably, only in the last four to six weeks, and it is absolutely, categorically clear that this bill is full of holes. And that shows a Government that doesn't have a plan. It is not clear in terms of what they're trying to deliver and, more importantly, they don't have a sense of what the reality is on the ground for hard-working Kiwis.
Today, we heard the outlining of Government spending related to this, of which this bill is going to contribute in the region of $6.5 billion this year alone. That is the single biggest outlay of Government spending, and this bill, in terms of its fiscal cost, will account for about $800 million of that spend. And I want to quote to you some of the words around in the supplementary analysis report of this, and I'll tell you what: of course, we didn't have the bill till only prior to the first reading, unlike this Government which had been working on this for about four to six weeks. But I only got to page 3, and I got five points, so let's just go through those and work those through.
The fiscal cost of payments is expected to be $747 million. This is based on a payment of $350 to an estimated 2.136 million recipients. That estimate is highly uncertain, because the size of the eligible population is unknown. Well, how about that? So we've got a policy here that actually is targeting a population that the officials have indicated—they're not even sure how many people are there. So given the fact that they don't know how big the eligible population is, they've put a round number of $800 million because of the uncertainty around that estimate. So that's the first example. For those sitting at home, going, "Well, you know, this is tough; it's a tough business. Everyone's under pressure at the moment." Well, that just gives you an indication that even the fiscal costs of this bill haven't been well thought through or, actually, haven't got any real substantive basis in order to back them up.
The second aspect goes right back in the executive summary of the supplementary analysis around the options analysis, so you'd expect that the Government would consider a number of options to deal with the problem of a cost of living crisis that is impacting Kiwis and has been around for pretty much most of this year. But oh, no, no. They haven't. The line at the top on page 2 reads, "The Treasury recommended against progressing a broad-based payment." So even the Treasury do not support this bill if you look at the first line of page 2 of that analysis. And they go on to provide the details why, which is all pretty sensible stuff. But, of course, a Government that is well known for not listening, for not taking on feedback, and for thinking that they know best had just kept on trucking on and continuing with this bill.
I now want to move to the next category in the report, which talks about the eligible population. The eligible population criteria for this bill is like a sieve, right. It is just full of holes, and we'll get into that in the committee of the whole House stage. But I want to just cover off the key element here. Again, I quote: "Inland Revenue was not able to accurately forecast the number of eligible individuals for the 2021/22 tax year."—i.e., IRD, the department which is going to be responsible for implementing these payments on 1 August, if they are lucky, are not able to forecast who is going to be eligible for this payment. 
This is not a joke. Just for those that are at home, watching this thinking, "Maybe, I've flicked onto a wrong channel and am looking at bloopers within Parliament or something like that." This is no joke. This is the reality of a Government who is completely out of touch, a Government and a Minister who are not over the detail, and what this shows is this bill has been thought up on the hoof, probably as a result of a bad poll. These guys have got desperate. They've gone, "Oh crikey, we haven't got anything to deal with that issue. What have we got? Let's have a go at this." And their own officials—whose heads are down at the moment, going, "Crikey, what are we going to say to the Minister in the committee stage?"—are saying this is not able to accurately forecast that. It's in the supplementary analysis report. That's the facts; that's where it is. And I'm hearing on the other side a little bit of comment that they don't seem to believe it. They just need to read their own report.
I want to go on, as well, because I've covered three. But let's talk about the administrative impacts of this bill—again, in that report. And, again, the Inland Revenue officials have provided some guidance on this. "This payment"—and I quote—"would require Inland Revenue to devote a significant number of their frontline staff to deliver the payment and manage the contact-seeking support about this payment during one of Inland Revenue's busiest periods." Just think about that. Let's just throw this payment to individuals in New Zealand—2 million or so people—at the busiest time for Inland Revenue, but that Government doesn't care about those Public Service individuals, they don't care about the burden that this will place on them, and they absolutely wouldn't even understand the reality and the implications of implementing a bill. And what they've gone on to say—the Inland Revenue has anticipated that the resources required in order to implement this are in the region of 750 full-time equivalent hours being required—and I quote—"in the weeks of 1 August, 1 September, and 1 October."—750 resources. Where are these people going to come from? Well, I can tell you where they're going to come from: they're not going to come from anywhere, because the Minister has not got over the detail. He's come up with a plan, he's come up with a policy and a bill, but he has not thought through the detail on how this is going to be implemented. 
And I haven't even talked about the fact that this bill in terms of $27 a week—as I mentioned to you before—is about 9 litres of fuel for the Toyota Corolla. That is the extent. I heard before—one of the people said, "It doesn't even get you an Uber Eats for a week." This is inconsequential in terms of what real, hard-working Kiwis across this country are facing in terms of cost pressures on their lives right now. The ASB Bank has outlined that the cost of living increase for food alone for most families in this country is in the region of $150 a week. 
Twenty seven dollars for those under $70,000 and, again, the criteria is pretty loose. You only have to be in New Zealand and a New Zealand tax resident. Do you have to be a permanent resident? Do you have to be a resident in New Zealand or, actually, can you be someone from overseas who's working here on a working holiday visa and still get the payment? Well, I would be interested to hear the answer for that from the Minister in the next stage, because when hard-working Kiwis at home find out the reality that this is just another example of policy that has not been thought out, policy that is not going to deliver the outcomes required for hard-working Kiwis, they are going to be even more disappointed in a Government that they do not trust. 
I've given an insight, a little bit, into five key areas within the first three pages of a document provided by officials in regard to this bill. I think it categorically proves and substantiates that this bill has been made up on the hoof. It is a broken bill built on a backward Budget by a Government that doesn't have a plan, a Government that is out of touch with hard-working Kiwis across this country. National opposes this bill.





Dr DEBORAH RUSSELL (Labour—New Lynn): Let me tell you what motivates this bill. It is a simple question: how can we help low and middle income New Zealanders? How can we help people who are doing it tough because there is a worldwide inflation problem? How can we help people in this country who don't get benefits, don't get the winter energy payment, and don't get super? What can we do for people who some on other side like to refer to as the squeezed middle? The answer is that we have a cost of living package that is designed to help exactly those people. It's based around cutting transport costs and putting some money in people's back pockets. That is what motivates this bill.
The Opposition have been quibbling over it. First of all, they've complained that they don't know the detail. The most recent speaker—Simon Watts—said he wasn't sure whether it applied to New Zealand tax residents or New Zealand residents. Well, frankly, I do know that detail and he clearly does not. Tax residency is quite different from residency for citizenship purposes, and people who complain about knowing the detail ought to know that in the first place before they get up and complain about it. It's straightforward—it goes to New Zealand tax residents, people who have been residents in New Zealand for 183 days or more within a one-year period. It's quite straightforward. Anyone who wants to comment on tax ought to be able to tell you that.
But going on from that, they complained about the fact that perhaps IRD might not be able to tell us exactly how many people are going to be affected by this bill and are going to eligible for the payment. Again, there's a straightforward reason for that. The 2021-22 tax year returns processing is not yet finished. So the Inland Revenue Department can't know exactly how many people will benefit from it, but they know about how many. We know it's going to be about 2.1 million New Zealanders—close enough to get enough fiscal cost on it. In fact, anyone with a good business brain ought to be able to sort that out, and we can do that on this side of the House.
Simon Watts: This is a bit embarrassing, Minister. She's pointing out where all the gaps in your bill are.
ASSISTANT SPEAKER (Hon Jenny Salesa): Order on this side of the House! You've had a chance to make your speech; now I'd like to hear Dr Deborah Russell.
Dr DEBORAH RUSSELL: They pointed out that it's going to be tough for IRD to process these payments. Yes, it is going to be tough. It is a big ask. But we're pretty confident that IRD can manage it. It will be tough, it will be hard, but, you know, times are tough and hard out there for ordinary New Zealanders, and that is why we are doing our best to answer that question: how can we help low and middle income New Zealanders? This is a new and unusual policy in New Zealand. We haven't done something like this for a very long time. It is unusual, but that does not mean it should not be done. The times demand that we try something new and that is exactly what we are doing in this space.
I want to address some of the words that were used by Paul Goldsmith in speaking on this bill recently. I heard words like "rapacious" and "aggressively greedy" as though somehow a Government trying to collect the money it needs in order to fund services is greedy about it, and, of course, that ties into the mantra from the other side about tax cuts. They talk about tax cuts but they never talk about service cuts. They never talk about running down the health system, which is what you have to do in order to fund tax cuts. They never talk about short-changing the education system, which is what you have to do in order to have tax cuts. They never talk about the services that we provide for all New Zealanders because that is the best way we can ensure the wellbeing of New Zealanders: by making sure there is a decent health system, by making sure there is a decent welfare system, and by making sure there is a decent education system. That is also how we look after New Zealanders, and in order to that we need to have a decent tax system. Simply chanting "tax cuts" without saying where you would cut services is irresponsible and it shows an Opposition that is not prepared to do the hard work—on this side of the House we are, and on this side of the House we are confident that this payment will help New Zealanders. It will put money in people's pockets. It will help just a little bit. It will make a bit of a contribution to the issues we all have with inflation at the moment, and that is why I am proud to support this bill.





RICARDO MENÉNDEZ MARCH (Green): Thank you, Madam Speaker. Reflecting on the fact that through the course of this debate, I've been hearing National Party members advocating for cuts to taxes and, effectively, services and, at the same time, also throwing some dog-whistles about this bill potentially reaching some of our migrant communities—so I think we've got this kind of scapegoating narrative on the one hand, and then the Labour Party members are expressing concern about the wellbeing of low-income New Zealanders. And I agree: the Green Party is deeply concerned about the state of our inequality crisis and the fact that so many low-income New Zealanders are doing it tough. This is why we are deeply frustrated that this cost of living payment bill is not reaching some of those New Zealanders who are doing it the toughest: people who are on the main benefit, some of our senior citizens who are relying on superannuation and they're still renting and are struggling to make ends meet. It makes absolutely no sense to be giving a stimulus and exclude some of the people who have been doing it the toughest.
I was looking at the departmental disclosure statement and one of the sections was around external consultation, and there was, basically, an admission that stakeholders other than key Government departments were not consulted on the proposals of the bill. For the purpose of this bill, I think we've got a trove of feedback from community, from researchers, and from advocates on the ground about the state of things in Aotearoa and the fact that poverty continues to be a massive issue. The Government could have looked at the Fairer Future report which showed that some families are $300 a week behind to be able to participate in their communities. The Government could have listened to the countless people on the benefit who are speaking about the need to constantly go to Work and Income to get a hardship grant because they cannot make ends meet. They could have listened to the stories that have been out there for so many years. So while I would have loved for the Government to consult with key stakeholders and communities affected, they could have also looked at what was already out there and realised that including people on benefits would have been the right thing if their genuine intent was to support low-income communities. 
I look back at the narratives that this Government was talking about when it came to the intent of the Budget, which was to ensure that our communities are healthy. I repeat what I said in the first reading speech: if we want our communities to stay healthy, we need to address low incomes, because far too many communities are getting sick because they don't have adequate and abundant kai because they're stressed from not being able to meet rent and because they're transient from moving to one emergency housing place to another. 
So if this Government is serious about our community staying healthy, they should be looking at including people on the benefit in this bill, ensuring that everyone is looked after and committing to permanent increases to incomes for the families that are doing it the toughest. The inequality crisis did not start with the rising inflation or the war in Ukraine that has caused some basic essentials to go up; it has been here since before even this Government came into power. If we're going to do service to the communities that we talk about, that we serve, then I urge this Government to include people on the benefit and to look at permanent welfare reforms so that all of our communities are able to thrive and fully participate in our communities. Kia ora.





DAMIEN SMITH (ACT): I wonder what Mr Thomas Piketty would make of this, in terms of the structuring and hastiness of this social policy. I was very interested in how the coronation was met between this payment and rising sea levels and methane emissions by the associate health Minister, so that left me rather confused.
In terms of prioritising funding from this—let me just imagine what happened in Cabinet. Newshub poll came in, three-quarters of New Zealanders said, "This Government's just not helping with the cost of living.", and everybody sat around and went, "What do we do? What money have we got? Let's reel a billion dollars out of the last of the COVID fund." "Yeah. That's good. Let's use that to give a payment to everyone out there and that'll get us through that two-month period." I think that's probably what happened. I think it's probably very simple to ascertain that several of the Ministers would probably have went, "Hmm. This is not, maybe, the way to go.", but public pressure is an amazing thing when it comes to polling and politics at this time.
That's what the ACT alternative budget, which is fully costed, would give people thousands of dollars to help with this crisis; not $27 a week.
Hon David Bennett: What about services?
DAMIEN SMITH: And then—we have kept essential health services; we've just reduced Government spending. That is the logical way for the Government to have embraced the significant milestone in this Budget today. But, nope, the golden goose doesn't apply to Kiwis. A key part of the Budget is to tokenise payments which are exciting a lot of young people, actually, tonight, around the country. People between 18 and 20 are all thinking, "Right, here's some money to go down to the pub. It's all good." There's four in a household, that's a good old session if you get these payments rolling in. Surely that should have been thought about and tested as being inappropriate; a mass blanket payment under this Budget.
So if you're weighing up what's happening in Australia, there's still a $6,000 gap between what they earn and what we earn. Structurally, we've got to embrace getting this right and doing it right, as opposed to this type of payment.
If you look at the COVID fund and the uses over the period, it's had many, many iterations but not one like this sugar hit that's come out today. We have to believe that a cost the living payment for a short period of time isn't going to solve the long-term problems of inflation in this country. The Green Party have recognised that the cost of rentals, the costs of superannuates, people without savings—there are social issues out there that, over the last four years, has led to a gap significantly increasing between what people were paying in tax with a Labour Government and now what they're paying today.
In terms of oversight of this payment, it must be pretty embarrassing to a Government and Treasury to be not on the same page. This is the cost of a vote, I guess, in terms of pacifying people. But what happens now, in six months' time, in a year's time, at the next Budget? Will we have the tax cut Budget then, or should it have been done now? In terms of our view of the world, it's clear that the Government sees and Mr Robertson sees Kiwi people's money as being something that is to be consumed by the Government and even before it's taxed. So he's once again used a Budget to reward political support.
We have to be honest, it says that this cost of living payment doesn't really secure anybody's future tonight. It helps with someone that comes in and buys a couple of loaves of bread, some cheese, maybe a little bit of butter—and I've probably overestimated those.
So, in terms of taking this seriously, we still want to encourage the Minister in the next Budget to adopt ACT's two-step principles of reducing income tax for hard-working people to 17.5 percent up to $70,000, which would help nurses, it would help families, it would help teachers, it would help anybody who, now, the Labour Party are recognising aren't the squeezed middle after this speech tonight. It would allow a top tax rate of 28 percent to be put in place for people who already pay their tax at the top end and work hard and contribute to this economy.
Inflation is not going away. The Reserve Bank have said that in the Monetary Policy Statement next week. The Official Cash Rate uplift will be heading towards 3 percent to 3.5 percent, which means extensive raising of interest rate payments in mortgages, and, also, if you've got young people under the roof of your house, the expenses are going to go up even further. This is a very serious situation. Growth estimated at now 2 percent per annum, as opposed to 5 percent. So we have a lot of forces that is going to cause potential instability.
The appetite for Government spending is just insatiable; we'll know in two years' time whether it's worked and/or we've got billions of dollars that have been put out the door that haven't got any traction, haven't achieved any results—especially in the health sector—and we know that people aren't going to stop complaining tomorrow about the cost of living crisis that is here in New Zealand. This is not going to stop this. There'll be another poll in a months' time which will still say people have still got the same issues that they have and nothing has been fixed by this Government. So we will be opposing this bill, but we'd like to speak to the Minister and the parties about a more extensive tax structuring philosophy when it comes to the Budget next year.





JAMIE STRANGE (Labour—Hamilton East): Madam Speaker, thanks for the opportunity to take a call on this bill. I think that there is a reason why the ACT Party are languishing in the polls, because there was no clear understanding of a plan to deal with the issues that are facing New Zealanders. Whereas—
ASSISTANT SPEAKER (Hon Jenny Salesa): I remind the member to come back to the bill.
JAMIE STRANGE: —I'm proud to be part of a Government who are supporting New Zealanders—hard-working New Zealanders—supporting middle New Zealand as they go about their lives. And the reality is—as we have heard in this debate from all sides of the House, we all acknowledge it—there are challenges with the cost of living. There are inflationary pressures happening around the globe. We do have a strong economy here in New Zealand. We have an economy that is very much export-led, primarily based on producing food for the world. The world will always need food, and we do that very well. We're growing, we're diversifying our economy into areas like tech, various manufacturing forms, and we are continuing to grow our economy. And as we heard from the Minister previously in this debate, we have had many years of positive GDP under Labour Governments. All through the early 2000s—high levels of GDP growth. And that growth has continued.
Obviously, COVID was a challenge. At the moment, we're faced with a particular challenge in terms of the cost of inflation. Even though we do have a strong economy, we are not immune to the pressures that are faced around the world. This is a Government who are listening to the people on the streets. We're in touch with New Zealanders. We're not out of touch with New Zealanders, like some members opposite. We have a plan to support New Zealanders because we understand the challenges that we're going through.
Clearly, this plan to fuel money into the economy to support New Zealanders—a $350 payment for those earning under $70,000. When we compare that to the National Party, the National Party have some sort of vague plan around tax cuts for those at the top. And the National Party have said, previously, there's this trickle down philosophy, and, hopefully, one of the next speakers from the National Party can enlighten us a bit more about that, because the idea of giving money, giving tax cuts, to those at the top and expecting that money to trickle down to those in the middle and those at the bottom is a fallacy—it's a fallacy—it does not work. Those at the top, they'll spend their money overseas, they'll go on overseas holidays, they might buy another five houses or something. Whereas, if you support middle New Zealand and those at the lower end, like we did on 1 April—
Damien Smith: You didn't get the memo about this bill.
JAMIE STRANGE: —I'm trying to hear the member—that money will go directly into the economy; it will support businesses. Now, some people will say, "Well, won't that fuel inflation?" Well, we've been told by Treasury, because it's a short-term payment of $350 over three payments, it won't negatively affect inflation. However, it will have the impact of supporting New Zealanders as they go to the supermarket, as they go to the petrol pump, because certainly there are challenges here.
I'd like to acknowledge the Minister Grant Robertson for his speech today. He has delivered a Budget that strikes the right balance in terms of supporting New Zealanders now and looking long term. This bill here is a part of that Budget. This bill plays an important role in supporting New Zealanders right now, because we're hearing what people are saying. We're out there on the streets, listening—we're not sitting in our ivory towers, locked away; we're on the streets, listening to New Zealanders. New Zealanders have clearly told us that they're struggling with the cost of living, and we're listening and we're responding. I'm proud to be a part of a Government that listens to New Zealanders and that is supporting them.
ASSISTANT SPEAKER (Hon Jenny Salesa): The next call is a split call. I call on Matt Doocey—five minutes.





MATT DOOCEY (National—Waimakariri): Well, thank you very much, Madam Speaker. What is the purpose of a Labour Government if it doesn't stand up for working people? Here we have a bill tonight where the average Kiwi on the average wage will get nothing out of this bill. The average Kiwi on the average wage of $72,000 will get a big New Zealand Transport Agency (NZTA) zero—you know those zeros that NZTA wasted $10,000 dollars on? An average Kiwi on the average wage will get nothing. There was a time when a Labour Government would stand up for hard-working Kiwis; they do not represent working Kiwis any more. It's on a guaranteed tax plan that a National Government will stand up for hard-working Kiwis. 
We have not had any time tonight to interrogate this bill. We've had no committee of the whole House stage. But what I want the Government members to do is to start fleshing this bill out—start explaining to us: why do you need 750 full-time equivalents to deliver this bill? What we know with a Labour Government is that won't be a ceiling; that will be a minimum. So we're looking at about 1,000 more bureaucrats on top of the 10,000 they've already employed. What will be the cost, Minister, of that 1,000 extra bureaucrats to administer that? The bill says it will cost $16 million. Is that including the extra funding that's in the paperwork that none of the Government MPs have talked about? IRD has asked for extra funding to employ the 750 full-time equivalents. How much is that going to cost? Ten thousand bureaucrats plus 1,000—now we're up to 11,000. When is it going to stop?
Even the Minister in his first reading admitted 200,000 Kiwis who are entitled to this—they don't even have their bank account details. Over 10 percent—they don't even have the details. Let's be honest: who would trust these guys to run a hot bath, let alone deliver a programme like this? This is destined for failure. Why we know that is because one of the very few documents we have for regulatory oversight says "analysis of the problem and potential options has been significantly constrained by shortened time frames". No one's done any work on this bill because they only magicked it up a couple of nights ago over a late-night wine when Grant reached over and he probably said to Jacinda and Chippy, "Oh, the public's getting a bit insatiable for tax relief. What are we going to do?" 
Here we are: a band-aid Budget—a band-aid $350 for hard-working Kiwis. What is the purpose of a Labour Government if they can't fight hard for working Kiwis? I tell you what, you go and listen to the comments on the news tonight, and the hard-working Kiwis aren't impressed. They aren't impressed about this band-aid response to, in fact, a very serious crisis in New Zealand. 
This is a failed socialist experiment, this Government. Everything they do is failure—a failed socialist experiment. Now they're reaching in and blowing $6 billion—the biggest spend—plus another $2 billion in the next Budget, another half a billion, and add on $800 million for this policy pledge. I tell you what, it's the hard-working Kiwis that are going to have to pay it back on top of all the extra costs that they are paying for, and now they've got debt that's growing by the day. The interest on the debt this Government is growing is twice what we pay for the New Zealand Police Force a year. This Government is out of control. But hold on, because there was one learned colleague from the Government benches who mentioned the poll, and he's dead right, because the poll was reflective of where middle New Zealand is: middle New Zealand does not trust this Government. 





SARAH PALLETT (Labour—Ilam): Thank you, Madam Speaker. I rise this evening in support of this bill and—sorry, I'm a little tiny bit taken back with the suddenness of my colleague across the row ending. Obviously, completely fascinating, but somewhat abrupt in its ending.
Matt Doocey: Point of order, Madam Speaker.
SARAH PALLETT: I'm sorry, are you starting again, Mr Doocey?
ASSISTANT SPEAKER (Hon Jenny Salesa): Point of order, Matt Doocey.
Matt Doocey: The Government MP was surprised my time had finished. I'd like to seek leave for further time.
ASSISTANT SPEAKER (Hon Jenny Salesa): No. That is not granted.
Hon Member: He sought leave!
SARAH PALLETT: Speaking to the point of order, Madam Speaker, I wasn't surprised by his time ending; I was merely surprised by the abrupt way his sentence finished. Thank you.
ASSISTANT SPEAKER (Hon Jenny Salesa): You're seriously seeking leave for more time?
Hon Member: He said that.
ASSISTANT SPEAKER (Hon Jenny Salesa): I put that leave for more time for Matt Doocey. It is not granted.
SARAH PALLETT: Thank you, Madam Speaker. Good try, Mr Doocey! Right now, the fundamentals of our economy are strong. Our strong health response has protected our economy through COVID-19, and we've done better than almost any other country because we put people first, because the best response to any crisis is to focus on the people. We know that the best health responses will result in the best economic responses. You can't separate a solid economic response from a solid health response.
We are, though, in the middle of a global pandemic. Whilst we've done well, we can't escape the fact that forces are in play that are affecting all of the economies of the OECD countries in the world—all of the countries of the world.
We heard today that in the UK, inflation has risen to 9 percent in the 12 months to April—9 percent: the highest level since 1982. I have to say, when I heard the news, an expletive that I won't repeat in the House did escape my lips. It is predicted to rise again, unfortunately.
What did the chancellor have to say about this? The Chancellor of the Exchequer. He said, and I will remind the House that he is a Conservative MP, "There is no measure any Government could take, no law we could pass that could make these global forces disappear overnight."
We in Government have been arguing this point, that there are some things that we cannot change, but we can respond to them. We can see examples like my friend in the UK, who has seen her fuel costs rise by thousands of dollars this year, causing them great economic hardship.
We understand that things are tough for many families here in New Zealand. That's why we've introduced a comprehensive cost of living package, a package that will give a payment of $350 to all people earning $70,000 or less. That's 2.1 million people, approximately, assessed on an individual basis, not a household basis. We are also extending our fuel tax cut, extending our road-user charges cut, extending our public transport fees rebate of 50 percent, and permanently halving public transport fees for those on the community services card.
So when you hear members of the Opposition talk about tax cuts, they mean tax cuts for the wealthy; they don't mean relief for what they describe as the squeezed middle. They don't mean that, and you know what? They won't tell you what they will cut to give themselves a pay rise. Is it the new Hillmorton Hospital that the Opposition proposes to scrap? Is it the 80 new adult psychiatric beds in the new Hillmorton Hospital? Is it Whangarei Hospital? Is it Nelson Hospital? Is it money for the eating disorder services? Is it for the Pharmac money that we've increased? A 43 percent increase to Pharmac medicines budget since 2017 is what this Labour Government is going to be providing. Is that what they're going to cut in the Opposition?
They're busy telling us that $350 is nothing. They're busy telling us this when they're simultaneously telling us that $2 a week for the lowest earners—which is their tax cut proposal for the low-earning people of New Zealand—oh, we're supposed to be grateful for that; that's a lot of money?
Frankly, this is not true. We're not going to spend $350 on a one-way ticket to Australia because people on low and middle incomes don't spend $350 on a trip to Australia. They spend it on food, on fuel, on car registration, on looking after their families. Looking after their families is precisely what this Government is doing.
ASSISTANT SPEAKER (Hon Jenny Salesa): I call on—
Hon Member: Halbert.
ASSISTANT SPEAKER (Hon Jenny Salesa): I call on Shanan Halbert.





SHANAN HALBERT (Labour—Northcote): Thank you, Madam Speaker, and—[Interruption] Ha, ha! Thank you, Madam Speaker.
Simeon Brown: Wakey, wake!
SHANAN HALBERT: Wakey, wakey. And it is a "wakey, wakey" day under this Government as we launched a wonderful Budget—a Budget that makes a difference for every New Zealander in this country. I've heard the narrative this evening that it's not enough, that it's not enough—it's not this; it's not that. But in Northcote, I've done the numbers. It looks like up to 60 percent of Northcote constituents will be better off under this piece of legislation.
We know that our economy has been—is—one of the strongest in the world, with triple A credit ratings, record low unemployment, and lower debt than Australia, Canada, the United States, and the United Kingdom. However, despite these positive results, we know global inflation pressures are hurting some people, all across New Zealand, in our own communities. That's why today counts.
I turn to some of the points that another member from the Opposition spoke of earlier, a colleague from the North Shore. We know that the North Shore is better under a Labour Government. National had a stronghold on the North Shore for over 15 years, and I heard one of the members last night talk about no infrastructure investment on the North Shore. Well, we know there definitely wasn't any infrastructure investment under National, but we see it under Labour, we see it in houses, we see it in the North Shore Hospital, we see it in the Northern Busway extension—all the things that matter to changing people's lives in Northcote, and that's what counts.
One of the points tonight that the North Shore member raised was that this was only $27 per person in the average family—$27. Well, can I say: $2 under National—$2 versus $27. Well, I'll count that up: $25 more per person. Well, that's a lot. But what we haven't seen in all of this discussion of the cost of living crisis that this particular bill addresses is that people are better off under this Government. We have put forward a balanced, a practical Budget that is going to change the lives for many people in what has been a challenging time. Challenging times will not last for ever, but they know, just like in COVID-19, this Government backs them—like things through the wage subsidy: they were supported to stay in their employment. Well, here we are: under the cost of living crisis that the Opposition wanted to call us out for, we are responding. We are responding with this piece of legislation, we're responding with extra pūtea—extra money—in the hands of good people and families where it matters.
We're responding in public transport. We're extending half-price fares, and what a wonderful Minister that just walked into the House, who is taking action to change the lives to respond to the congestion challenges of Tāmaki-makau-rau Auckland, but, most importantly, to respond to the emissions that transport puts into our taiao, our environment.
What a wonderful piece of legislation that is before us tonight. It delivers for people. It takes action in a practical and very humble way. This is a responsible Budget. I'm proud of the work of the Hon Grant Robertson, and I commend it to the House.





Hon DAVID BENNETT (National): Thank you, Madam Speaker. I just want to, first, start with a little introduction for members of the public as to what happened to the Labour Party in the last three weeks. Now, they would have seen the polls and they would have known that they were in big trouble, and the squeezed middle cost of living argument was starting to take residence in the New Zealand public. Now, they would had to have rewritten their Budget in the last two weeks to actually try to achieve something to deal with that issue.
That's what happened, and there's only two members of the Government that would actually have known what happened. The rest of them are all backbenchers. They wouldn't even know it. They would have only worked at caucus on Tuesday when the leader came in, or the Minister of Finance would have come in and told them, "I've got this great plan to give this money to all these people." They had no idea—they had no idea. Mr Parker and Mr Woods here, they're both sitting so silent and looking down because they knew—they knew. They were in Cabinet. They would have had the discussions. All these guys here, most of them aren't coming back. They're going. And they tried to save them, and that's what happened. And the Labour Party members would have gone to caucus on Tuesday and they would have had this big presentation saying, "Look at what we're going to do for the squeezed middle." Don't be so dumb. Understand what is happening. Your party has destroyed the New Zealand economy and today you have controlled that destruction even further. Don't take it from those ones in the front. They'll still be here. You won't be, and that's what you need to understand. 
Now, that's the Labour Party. That's the dynamics of what has been going on in their party. But let's actually look up what it is: a payment to every New Zealander that's under $70,000 of income. Well, look at the Australians when there was a recession a few years ago for the global financial crisis (GFC). They gave $1,000 to everybody to spend. The Labour Party is not that generous, are they? They didn't give a thousand bucks like the Labor Party did. Guess what happened in Australia when the Liberal Party gave that thousand dollars! Everyone just spent it on TVs. It didn't actually help the Australian economy at all. And if anyone looks back at what the approaches were to the GFC, spending money by giving a payment to a community was seen as the least effective approach. The most effective approach is what the National Party did here, which was actually invest in infrastructure, invest in skills, and invest in the ability for New Zealand to grow its income going forward. 
That's what this Budget should have done. This Budget should have been a long-term Budget for New Zealand; it shouldn't have been a short-term Budget to try and pay people off. That's all it is, and it's not going to save the Labour Party; in effect, it will do the opposite for the Labour Party: it will create more inflation in the next few months.
ASSISTANT SPEAKER (Hon Jacqui Dean): Order! Order! I'm going to ask the member to come back to the bill.
Hon DAVID BENNETT: Well, the major part of the bill and the Government's promise for this Budget is a payment to individuals, and that payment will actually create inflation. There's no other way to look at it. It's just going to be spent in consumer spending; it's not actually for the infrastructure of New Zealand to grow a stronger economy. That's where Labour's missed the trick. If they actually wanted to use that money effectively, they should have used it so that we could grow our way and pay our way so we can have the services we want. The services and health and education aren't going to come from giving everyone a slight payment. That's not going to do it. The way that the services come is if you increase the tax take by New Zealand having a bigger economy. That's how you get more services in the country. The Labour Party doesn't understand the fundamentals of economics.
 But there is another thing that those two senior Ministers that are here will actually have known about that the backbench don't know about yet, and that's that New Zealand's probably going to be in recession in a few months' time. Look at all the other major economies in the world going through a high inflationary environment. All the projections are of recession. And guess why those two senior Ministers didn't give you that money today! They didn't give us that money in April near an election; they gave that money in August, leading on, because they knew that was when the recession was about to start. I bet you they've got that advice from Treasury and from the Reserve Bank that there is the potential of a recession in New Zealand and they are trying to stave off that recession, because you cannot win an election going into a recession and the Labour Party will do all it can to try and win the election, even if it means misusing New Zealanders' money. And that's what they did today. They misused the investments that New Zealanders give to this House. People don't pay this tax to this House for fun; they work damn hard out there to make the money so this House can make the best decisions for all Kiwis. That's why we have a Parliament. That's how the economy works. It is not to be used by a political party for posturing and trying to win votes. In effect, they are actually going to lose votes because all they're doing is creating more inflation, fastening that chance of a recession coming, and, therefore, ordinary Kiwis will be losing a lot more than the money that they are going to get out of this. 
We've heard talk today about what you could actually buy for that kind of money, and it's little or nothing. Most people know how expensive it is now to get their groceries each week. Most people know how expensive fuel is. We can't blame overseas all the time. Look at the structural imbalance in the New Zealand economy. What could have been a better way to spend that money? You know, we had Jamie Strange stand up before, from Hamilton. Well, the Labour Party cancelled the road from Cambridge to Piarere. That was $600 million. They actually cancelled—they didn't go ahead with Southern Links, which would actually be very important for Hamilton, which would be about the same kind of $600 million. There's two projects there that would have actually been better investments for New Zealand than giving everybody 350 bucks to go buy a TV that's imported from China—because that's what's going to happen. I bet you there'll be sales at The Warehouse for TVs just at the right price. Every student bar will be setting up nice little packages for students to take advantage of. There'll be all these little consumer treats that are out there, which the business community will take advantage of the Labour money. The Labour Party have fallen into another trap, and the reason they are in that position is because, first of all, they don't understand how to make money; they don't understand how to run an economy. 
Secondly, they think you can buy votes. They think the public is stupid. They think they can actually be smarter than the public. That's the urban academic elite that is the Labour Party. 
Thirdly, they actually were under pressure. They had no understanding of what to do. They were panicking. But the learned members of the Labour Party's senior bench were panicking in the last couple of weeks. And the result of that panic—they would have gone to their officials, "What can we do? What can we do? What are the options? What can we do in two weeks that we don't have to do any work on?" And the option would have been: "Well, you can give everyone some money." That's it. The Labour Party ticked it off and their poor little backbench sitting there now, stunned as mullets, looking at each other, going, "What's happened to us? We shouldn't have listened to these two in the front row. We should have actually stood up for our people." Well, there's a chance, to the backbench of the Labour Party. There's a year to go to the election. Stand up for the people in New Zealand; don't be led by your front bench that are only interested in their own salaries and positions. Actually make sure, if you get to spend New Zealanders' money, you spend it on things that are good for New Zealand and don't make all these rash promises. 
In the economic development area, we've had Stuart Nash come up with a beautiful promise of $100 million for a banking finance system for small business. It won't even get off the ground. It's got no chance. That guy could not sort that out in the next year. They have got no idea. They had this thing for regional and strategic investments that it was to take over from the Provincial Growth Fund. They gave $58 million for it last Budget. They've only spent $6 million of that $58 million in the whole year.
ASSISTANT SPEAKER (Hon Jacqui Dean): The member's time has expired.





GLEN BENNETT (Labour—New Plymouth): Well, I stand up for the people of New Zealand, this afternoon, this evening. And, as a Bennett, I think from a village far, far away from the previous Bennett—David Bennett, I am proud to stand here and support this piece of legislation this evening. We've had things thrown at us all afternoon, evening, and our previous speaker just talked about us to not be so dumb, that we're destroying the New Zealand economy—he's put his headphones in, so, obviously, he doesn't want to hear this—that we'd fall into the trap. But I just want to say tonight, thank you—thank you to the Hon Grant Robertson for his contribution to not only New Zealand society but to this Budget today. 
When I look at this Taxation (Cost of Living Payments) Bill, I see our finance Minister responding to need. I see our finance Minister responding to what is going on within Aotearoa New Zealand. This isn't about polls. One member across the floor said this was made up a couple of days ago. Another member said it was made up six weeks ago. The previous member said it was a couple of weeks ago. This was about responding to need. 
I also want to say that another thing that's been thrown around is about it being rapacious. Now, as a commoner myself, as a working-class member of our community, I had to look this word up, because I didn't actually quite understand. And they keep throwing this "rapacious", "rapacious", "rapacious". But then it's about being greedy, about wanting more money or possessions or wanting more. But our Cabinet Minister, our Minister of Finance, is definitely not that kind of person. I think of him as smart, as driven, as compassionate, and having hard-headed compassion to ensure that, at this time when we're dealing with our challenges, he is responding to need within our community. Now, this is a targeted payment. We've heard others talk about this as the 2.1 million or so people. That's almost twice the population of the South Island that are going to benefit from this payment. 
Now, we've heard from the Opposition that this is the cost of a flight to Sydney. Someone said earlier that this is a cheap trip to the pub or won't pay for your Uber Eats for a week. Well, we get abused and told that we're out of touch with New Zealand society; well, I think it's the Opposition that's out of touch, when they're talking about things like flights to Australia or buying Uber Eats or going to the pub, because the community that I live in, they wouldn't be looking at flights to Australia right now; they'd be looking at what that's actually going to help them with, whether it's helping with a new washing machine, whether it's going to help them in terms of a trailer load of firewood, whether it's going to help them with servicing their car or getting a couple of new tyres for their vehicle. This payment is going to serve the people in my community, and I'm grateful for it. 
And let's just be clear, $350—but think about a family. Two for my car—it would be two new tyres for my car. So thinking about a family, a couple of parents, $700—$700 that goes into the coffers for a family. So when we say we're out of touch, I believe it's the other side, when they're talking about they're quickly googling what a flight to Sydney is. Well, my people are googling things that are actually going to help their whānau and their communities. I'm proud to be part of this party and proud of this Government that is here to support New Zealanders at this challenging time. 
In closing, I just want to mention the Hon Paul Goldsmith, who, again, talks about—you know, he was going on and was complaining, and then he talked about other things, a couple of cheap bus fares and this type of thing; it's not much at all. But, again, announced today in the Budget was around the community services card, that is there and is going to be half-price bus fares for ever and ever, and I'm grateful for that—that we're actually addressing, we're responding, and we're ensuring that New Zealanders can move forward. It's not easy, but we're willing to take a stand. And the Taxation (Cost of Living Payments) Bill is one that I support.





A party vote was called for on the question, That the Taxation (Cost of Living Payments) Bill be now read a second time. 
Ayes 67
New Zealand Labour 65; Te Paati Māori 2.
Noes 42
New Zealand National 32. ACT New Zealand 10.
Abstentions 10
Green Party of Aotearoa New Zealand 10.
Motion agreed to.
Bill read a second time.
ASSISTANT SPEAKER (Hon Jacqui Dean): This bill is set down for committee stage forthwith. I declare the House in committee for consideration of the Taxation (Cost of Living Payments) Bill.





In Committee
Part 1  Amendments to Tax Administration Act 1994
CHAIRPERSON (Hon Jenny Salesa): Members, the House is in committee on the Taxation (Cost of Living Payments) Bill. I remind members that they are able to participate remotely. If you're on Zoom and want to take a call, please type "call" into the chat. You should also use the chat if you'd like to raise a point of order. If we receive new tabled amendments, I'll advise members so that they can refresh the House papers page to see the new amendment. Finally, it'd be helpful for members to ask multiple questions, if they have them, or if the member's in charge during the call.
Members, we come now to Part 1. This is the debate on clauses 3 to 6 Amendments to Tax Administration Act 1994. The question is that Part 1 stand part.
SIMEON BROWN (National—Pakuranga): Well, thank you, Madam Chair. I appreciate the opportunity to take a call on the Taxation (Cost of Living Payments) Bill, which is now at the committee of the whole House stage. It's quite ironic that this particular Part 1, which is about interpretation and setting up the cost of living payments scheme, is even called the "cost of living payment scheme". It says "to provide financial support to certain low- and middle-income persons affected by an increase in the cost of living". Well, quite ironically, it's a $1 a day payment, actually less than a dollar a day payment. It says here "affected by an increase in the cost of living". I'm not sure whether this Government actually understands what is happening in New Zealand right now with the cost of living. In fact, all the one-termers over the other side who've been taking calls in the previous debates, trying to explain how much they care—how much they care. This was only dreamt up two weeks ago. This Government doesn't care. They're just reacting and responding because the reality is that New Zealanders are facing a cost of living crisis.
I note the clause doesn't even say "crisis"—doesn't even say "crisis". They can't even bring themselves to say "New Zealanders are facing a cost of living crisis". It just says address the increase in the cost of living, and it stops there—address the increase in the cost of living, stops there. New Zealanders are facing a cost of living crisis, and today's Budget, which this bill is part of, does nothing to address the real issues facing many, many New Zealanders. The fact is 7 percent inflation in New Zealand, brought about by a Government which printed billions and billions of dollars of cash and which has been, frankly, irresponsible, wasting money—wasting money left, right, and centre—and now is coming to this House with a $350 payment; quite irresponsible, and, quite frankly, out of touch with the needs of New Zealanders. So I ask the Minister in the chair, why doesn't he actually just say the word? New Zealanders are facing a cost of living crisis.
Why does the piece of legislation not actually address the real issues that New Zealanders are actually facing? That real issue is actually the fact that we need proper tax relief, and the fact that this Government is constantly taking more and more taxes because they are not adjusting the tax thresholds. National has put forward a plan, a very comprehensive plan, which addresses the real issue in our tax system, which is about actually saying inflation is meaning that while New Zealanders' incomes are going up, inflation is going up faster, and that their tax system means they're paying more tax despite them going backwards. So, National is saying: actually, it's time to have a comprehensive look at those tax brackets and make sure that they reflect the increase in inflation, and to ensure that New Zealanders actually keep more of what they earn.
This Government has come to New Zealanders today and said, "We know best. We know how much money you need. You need $350. Oh, only these people over here, we'll give you $350, and then that's it. And we'll give it to you over a three-month period, in three different instalments. And by the way, we're going to hire 750 people—750 people—to manage, at IRD, that process." What about this old-fashioned principle of actually saying "New Zealanders, we trust you, and we're going to let you keep a little bit more of what you earn because you know best where the cost pressures are in your life, you know best what is needed, and you know best how to get through this cost of living crisis." 
On this side of the House, we actually back New Zealanders, we believe in them, and we actually want to see good policy which actually provides a sensible solution, not the simple, simplistic, socialistic approach put forward by this cost of living payments scheme—
CHAIRPERSON (Hon Jenny Salesa): Does the member have a question of the Minister?
SIMEON BROWN: The question is around: why is the Minister not actually addressing the cost of living crisis and not even referring to it in clause 4(2), which says "a cost of living payment scheme". He doesn't even say "crisis"—doesn't even say "crisis". That's the reality of New Zealanders out there in the main streets and in the towns up and down New Zealand and the suburbs of our cities. This bill doesn't even address it. I ask the Minister: why is this Government not even mentioning the word "crisis"?





CHRIS BISHOP (National): Thank you very much, Madam Speaker. Look, this is the first of what I'm sure will be many calls on this very tricky piece of legislation. I do have a couple of points I want to make. 
The first is that I just want to say to the Minister, quite seriously, it is disgraceful that the bill contains a statement about the regulatory impact statement (RIS) that says that the supplementary analysis report, which members can find on the floor of the House—the bill says that the copies are on two particular websites, the tax policy IRD website and the Treasury regulatory impact statement website. Neither of those websites have the RIS on it, as of about half an hour ago. In particular, they didn't have them on it at 2 o'clock, when the bill was tabled for the first time. The Opposition saw this bill—sorry, at 4.30, once the urgency motion was moved. 
Look, it's Budget. It's fair enough. Governments, including past National Governments, have tabled legislation urgently and we ran them through the House, and it's probably a very poor lawmaking practice, but I wouldn't be churlish and complain about it because National used to do it as well. But I don't think it's unreasonable that members have opportunity to scrutinise the supplementary analysis report. 
So we got access to it because it was finally placed on the floor of the House later on, or later in the bill's first reading. I, for one, while the Minister was giving his speech, tried to look up the regulatory impact assessment report, desperately trying to see some stuff in it, and it wasn't online. I went to the tax policy website and it's not there, and I went to the Treasury website and it's not there, and it wasn't on the floor of the House. So we had the first reading debate without it. 
That's a shame, because as the Minister knows, and as Matt Doocey pointed out, there's a lot of stuff in the supplementary analysis report, most notably the fact that the IRD said, "Don't give this job to us." and the Treasury said, "Don't do it at all." So I would have thought that was, like, some pretty interesting information that Parliament would want to know about. The Treasury said, "The IRD should do this.", and the IRD said, "No, no, no, we don't want anything to do with this." You know what else they said? They said this will have a significant impact on our services, including for the very people the payment scheme aims to help, because they're the very people who contact the IRD and say, "Oh, look, I need a bit of help with this and I've got some issues here." 
What the supplementary analysis report shows is that those people are going to be affected, because there's going to be a significant number of front-line staff to deliver the payment, and it's going to be extremely tricky. It's going to "compromise Inland Revenue's already stretched workforce and affect the taxpayer population,"—I'm quoting from the supplementary analysis report—"including the families and individuals that this payment would be intended to support."
So it says, "While Inland Revenue can administer the payment"—which is fair enough, I suppose, because they're a Government department, they do a great job, and they move heaven and earth to help the Government—"doing so will significantly impact their services to its customers." So that is pretty material information that the Parliament has a right to know about. So that's my first point, and I'm pretty unhappy about it, and I would welcome the Minister's comments. 
The second point is a genuine point, and it goes to the departmental disclosure statement, which was available on the floor of the House. Now, we'll get into the time issues later, and I'm sure members are going to want to explore when exactly this bill started to be developed, because poor old Glen Bennett said, "Oh, no, look, this has been planned for ages." It's in the Government documents that it was come up with in the last two weeks. Let's just put aside the facade that this this was some well-organised and executed plan to assist New Zealanders with the cost of living. Let's just not joke with the House. We all know exactly how this worked. 
But my question for the Minister is: why is this legislation required? I know that sounds funny, but if you read 3.6 of the departmental disclosure statement, there's actually quite a serious policy discussion around, basically, cutting a long story short, whether or not the bill's required. I draw the Minister's attention to the legislation design and advisory committee, who were asked by the IRD officials for their view on whether the eligibility criteria should be set out in secondary legislation or in an administrative notice. The LDAC, as they're called, says, basically, "On balance, we think the balance is slightly tilted in favour of treating this as an administrative scheme, principally due to its nature as a short-term response to its immediate problem". Well, as I understand it, that's not what's happened. The question for the Minister is why the Government's done what they've done.





Hon DAVID PARKER (Minister of Revenue): In respect of Chris Bishop's question about the time of tabling of the disclosure statement, I'm advised that the documents were provided to the Bills Office—Bills Office or the Clerk—yesterday, and that there's been no attempt to delay the tabling of that document on the floor. So it wasn't because it wasn't provided late by the department.





SIMON WATTS (National—North Shore): Madam Chair, thank you very much for the opportunity to take a call in regards to this bill. I know my colleague Chris Bishop is, no doubt, going to come back and ask a few more questions in regard to the point that was just raised. I want to ask some questions, and I actually have a series of 10 or so questions, so I'll take your advice the way in which we do that. I'm referring to new section 7AAA, "Administration of the cost of living payment scheme", inserted by clause 5. My question relates to subsection (3), which specifies that "The commissioner must publish, on an internet site … the eligibility requirements". My question to the Minister is: when can taxpayers expect to see that information published. So that's the first question, and I'll go on for a couple more and then we'll go from there.
The second element is in regards to the explanatory note of the bill. The explanatory note contains the term "main eligibility criteria." So my question to the Minister is: what else is missing? "Main eligibility criteria" implies that there are elements outside of that. So my question, quite simply, is: what else is missing from that?
For this series, I'll finish off on this last question: can the Minister confirm that the income amount is $70,000 or less? In the Budget speech that the Minister of Finance gave today, he said that this payment will be available to people aged 18 and over who earn below $70,000 per annum, based on last year's tax data, and who are not eligible for the winter energy payment.
I want to note—and members may think this is quite a small detail, but it goes along with the theme that it is our belief, based on the information we've got in front of us, that this bill has been pulled together at late notice and on the hoof. So I ask again: who is qualified to get this payment? Is it those on an income amount of $70,000 or less, or is it, as the finance Minister quoted today, below $70,000? I'll leave it at that series of questions.
Hon DAVID PARKER (Minister of Revenue): I'm advised that the criteria will be published shortly after enactment—so very close to enactment. On the question as to what's left, what's left is minor administrative detail, and the example that officials have given me is that what might be the date that's chosen for assessing whether someone is a resident or not for tax purposes to qualify or what might be the way administratively they choose to define when someone's going on or off benefit. It is that level of administrative detail, rather than the level of the payments.





CHRIS BISHOP (National): Well, thank you very much, Madam Chair. I've got another question, but I want to return to the point I made before which is—it's sort of neither here nor there whether the material was supplied to the Bills Office. The point is, the bill—which, as I say, we got a copy of at 4.30 p.m. If you watch the video, you can see the Minister move the urgency motion, and the Clerk came in and put the bills down, and we all went and raced to see it because, you know, we had literally six minutes to read it. I'm not making a point about that, because successive Governments have done that since time immemorial, and it would be churlish to complain about it. But I just make the simple point that the bill explanatory note—[Interruption] What's that? 
Hon David Parker: You are whinging about it.
CHRIS BISHOP: No I'm not. I'm whinging about the fact that I don't think it's unreasonable as a Parliament—
Hon Members: He's whinging. 
CHRIS BISHOP: Well, OK. Well this is a serious point—members might want to laugh but this is a serious point. It is not unreasonable, as a parliamentarian, to expect that when you read an explanatory note of a bill which you have seven minutes to read, that if you go to the websites that the bill directs you to, the things that are meant to be on the website that the bill says are on the website are there. That is a simple proposition; it's not unreasonable, and I just make that point. I won't belabour the point any more, but I hope the Minister takes it on board because it's poor decision-making and poor policy-making. 
The question I wanted to ask was—this, basically, defers the decisions as to eligibility to the Commissioner of IRD. And it's a simple question, which is: what if the commissioner decides that the eligibility threshold's not 70,000 or below? It's Government policy that it be that, but what if it's not what the commissioner decides? So how does that work? Because this is a highly unusual way of implementing a Government policy-making decision. There may be a simple answer to that, and it may be that I've just overlooked it, but I'd just welcome the Minister's guidance on that.
Hon DAVID PARKER (Minister of Revenue): In respect of the timing of that document that the member wanted to see on the web not being available on the web—I hear his complaint. It has been tabled on the floor of the House the whole time, so it was available to members in the House. And I suspect that the reason why the exact timing doesn't line up on the web compared with in the House is that the department would not have wanted to put it up early accidentally and break the Budget—
Chris Bishop: It's still not online now—it's still not online now.
Hon DAVID PARKER: Well, that is of no moment to the member because he's got the physical copy that he's read—
Chris Bishop: What about people watching? What about the public?
Hon DAVID PARKER: Well, actually, they're not debating the bill. [Slamming sound] Oh, literally throwing his toys there! In respect of the idea that the commissioner might somehow change the criteria, the commissioner has no such discretion. These things are set by the Government.





RICARDO MENÉNDEZ MARCH (Green): Thank you, Madam Chair. So my questions to the Minister arise from the intent of the bill, as laid out in the general policy statement, as well as some of the speeches we've heard from Labour Party MPs. It has to do around the intent of providing relief for people facing cost of living pressures, and specifically the mention of eligible low-income individuals. It's clear that the bill doesn't set clear criteria about who this bill is supposed to get the $350, and that's going to, sort of, be decided outside of the bill. But it is clear to me, reading the explanatory note in the bill, that the Government intends to exclude people on the benefit, as they already receive the winter energy payment. 
What I want to understand is: does the Minister believe that people on the benefit are not facing cost of living pressures? Despite the increases to benefit, they continue facing those cost of living pressures. I'm also thinking about under-18s who may be in paid employment. The way that the explanatory note is set out in the intent of the bill seems to be to exclude under-18s who may be doing paid work. 
So I want to understand what the Minister's intent is regarding (a) the exclusion of people on main benefits, the exclusion of under-18-year-olds who may be doing paid work, and what the reasoning was to aim to exclude those groups. Does he not think that they're facing cost of living pressures, and whether broadening, perhaps, the intent of the bill to include them would support more New Zealanders, as spoken about by many of his colleagues? So this is why we've put a tabled amendment around making it really clear that this bill should actually be including people on main benefits, and also people who may be superannuitants who may be struggling. I want to note, as well, that many of our over-65s who may be in rentals are facing massive cost of living pressures, and those pressures exist despite the winter energy payment. So is it his intent to exclude those people, and why?
Hon DAVID PARKER (Minister of Revenue): Yes, that is the design of the scheme. The view of the Government is that this was properly targeted to those that aren't on benefits. The member will be aware that, in addition to inflationary increases of adjustments to benefits, there have been increases to benefits a number of times under this Government. At this time of year, also, those people are entitled to the winter energy payment. This is struck on the basis of half the rate of the winter energy payment for a couple and is directed to those people who don't get it. As a consequence, we won't be voting for the member's tabled amendment in respect of a bill in which they're abstaining.





SIMEON BROWN (National—Pakuranga): Thank you, Madam Chair, for the opportunity to take another call on Part 1 of this bill. The question I have is in regards to clause 5, new section 7AAA, which, effectively, ensures that the Commissioner of the IRD has the role to administer the cost of living payments on behalf of the Crown. And I just want to note in the supplementary analysis report, which we have here, the advice which says that the Treasury has advised that strong aggregate demand, combined with constrained supply and a tight labour market, will result in inflation staying above target in the near term.
And then I wanted to turn back a couple of pages where it mentions that this particular policy is going to require around 750 staff to operate—750 staff to operate. So my question to the Minister is: we have a tight labour market, and you're going to find 750 people in a very tight labour market and make the tight labour market tighter? Have you considered whether this actual policy is inflationary and whether it's actually going to put more pressure on the tight labour market, and, if so, what is the impact that this is actually going to have? Because the reality is this seems to be a policy looking for some sort of solution, dreamt up on the back of an envelope at about 11 o'clock at night two weeks ago, without actually thinking through the consequences. And the reality is: has the Minister had some advice from the IRD as to whether they're confident they'll be able to find 750 people to be able to actually administer the particular policy?
I already note that in the supplementary analysis, it says that up to a quarter of the people receiving payments may not be able to receive them within the time frames, due to the fact that the IRD might not have sufficient information about their particular tax details. So we may have a situation where a quarter of the people aren't going to be able to actually get their payments in the time frame because the IRD doesn't necessary have all the information to be able to process it. 
And then you've got the problem of 750 staff being required to come on board in a very short period of time before August to assess millions of applications to actually see whether they're—
Simon Watts: 2 million.
SIMEON BROWN: How many times did you say?
Simon Watts: 2 million.
SIMEON BROWN: Two million—2 million applications, and then make a number of assessments for every application to make sure that they are eligible for every one of those three payments. This is a bureaucratic nightmare—it's an absolute bureaucratic nightmare.
I just wonder: did the Minister potentially ask for some advice as to whether maybe adjusting the tax thresholds might have been slightly more efficient? And, actually, not only efficient for the IRD—maybe they might not have had to hire as many people—but also maybe, actually, that would have given taxpayers the ability to decide how they spent their own money, rather than taxes being taken off people, and then people having to apply for a complicated process to get three payments of $117 over three months, to then come back, once they'd filled out the appropriate tax documents and proved that they were residents and that they'd been earning under a certain threshold, and that they weren't in prison or dead and all of the other things which are required by the rules in this process, and then get some money back. That is the definition of socialism, and the definition of a Government which believes that they have control, they want control, "It's our money"—it's the Government's money. They are the ones who have the money. They are the ones who own the money.
Well, actually, it's taxpayer's money. They worked hard for this money. They worked hard to earn it. They worked hard so that they could try and get ahead, and they give money to the Government through the tax system because they believe it will be for the benefit of all New Zealanders so that they can get the services that they need, not for this Government to use it like a play thing and just build bureaucracies. I ask the Minister to answer some of those questions around the implementation of that policy.
Hon DAVID PARKER (Minister of Revenue): To the extent that I could ascertain questions in that contribution, there was an assertion there that people eligible for the payment have to make an application—that's not the case. The payment is made administratively by the department for those who are entitled to it; they don't have to apply. In respect of the administrative functions that we need people to carry out, one of the main functions is to gather bank account numbers. We're anticipating that people who want this payment will want to give us their bank account number because they will want the payment. So we don't think that's going to be onerous, except that the number is about—there's a large number of people for whom we need bank accounts.
In respect of the question as to whether this is inflationary and did we give consideration to that, of course we did. And on our analysis, we realised that this would not be nearly as inflationary as policies that would give CEOs earning large amounts tax cuts every year of $270,000 per annum. Not an income tax policy that we would favour, but we know that the National Party would. So we find their concerns about the inflationary effects of what we're doing for low and middle income earners to be crocodile tears.





SIMON O'CONNOR (National—Tāmaki): Thank you, Madam Chair. Always a welcome chance to take one's mask off. Let's see what happens from here, shall we?
A couple of questions for the Minister. I'm interested, actually, to pick up on a question of Chris Bishop's from earlier on. I'm wondering whether the Minister in the chair has spoken to the Minister for the Environment to understand how many more trees have had to be culled tonight in order to provide paper-only copies, when we could have—people like myself; I'd love to have gone online—I'd love to know if he's had a conversation with that Minister, and, in particular, what the Minister for the Environment said to the Minister in the chair.
Secondly, I'd be really interested—and it's always to do with Part 1 but it's in the policy background. He notes, to get this payment, you are not to be "incarcerated". Always really useful. The only problem, what does "not incarcerated" mean? I'm not actually trying to be stupid. There's multiple elements to this. Does that include people in remand? Is that people who are sentenced? Does that include or exclude people who are on electronic bail or people who have been bailed?
Finally, I'd like to know: it's not quite a constituent but a Donna Summer has written and she says she works hard for her money—she says, once again, she works hard for her money. And does he believe that he's treating her right?
Hon DAVID PARKER (Minister of Revenue): I'm not going to respond to that last flippant remark. In respect of the question is, did I ask the Minister information about the number of trees? No, that would have been a stupid question because it's obvious the answer is zero. I didn't need to ask the Minister for the Environment.
In respect of the question, which is a proper question, about what does "incarcerated" mean, it means people who are in custody. That could be someone who is on remand in custody. If they're not in custody on remand, then they wouldn't be included in the incarcerated. If they're in prison, yes; if they're on home detention, no.
Chris Bishop: That's going to be easy to work out.
Hon DAVID PARKER: Well, that information is already shared by Corrections with Inland Revenue.





KAREN CHHOUR (ACT): Thank you, Madam Chair. I just had a couple of questions for the Minister around the targeting that you've been talking about—saying this is a targeted payment. The scenario in my household would be an extra $1,400 coming into my household, with four children living at home over the age of 18 who will all be eligible for this payment. Is the Minister confident that that is targeting the payments to people in need?
And my other concern is that this will be done automatically, and will there be an option for people to opt out if they feel that they don't need this money?
CHAIRPERSON (Hon Jacqui Dean): Simon Watts.
SIMON WATTS (National—North Shore): Madam Chair—sorry.
CHAIRPERSON (Hon Jacqui Dean): Sorry, I've called Simon Watts.
SIMON WATTS: Yes, thank you, Madam Chair. I just saw the Minister stand up at the same time, and we're going to play a bit of up and down yo-yo, but that's OK.
The question I have in regards to clause 5, inserting new section 7AAA, and I said I've got a series of questions, so I'm continuing on with that. Inland Revenue will administer the payments based on information that they hold, and so my series of questions relates to that point. Can the Minister confirm that Inland Revenue holds date of birth information for all individuals in the country that are over the age of 18—quite a simple question, right? But the criteria of this bill is that anyone over the age of 18 is eligible. So my question is: does the Inland Revenue hold that information? If they don't, well, we've got a little bit of a problem.
My second question is around the Inland Revenue and the Ministry of Social Development, and I'm interested to know whether there's existing information-sharing arrangements, between those two entities, which cover specifically the winter energy payment, because, of course, looking at the criteria, that is one of the exclusion factors for getting this payment. So if that information sharing isn't in play, Inland Revenue will not have the ability to assess criteria, and we know that that's not often a reason why this Government don't make payments out to people, but that is another important aspect.
The last question in this series here is: will the Inland Revenue be proactively contacting individuals before 1 August, which is the date on which this is, in order to ensure that, proactively, they hold all the necessary information to be able to make a payment—for example, asking taxpayers to update their myIR to check that the Inland Revenue holds the correct bank account details, so they can actually get their payment of $27 a week, which, as I said, is 9 litres of fuel in a Toyota Corolla per week; 20 percent of a tank of gas.
Simeon Brown: 9 litres?
SIMON WATTS: That's it, Simeon Brown. So those are my three questions, and I'd appreciate the Minister's response.
Hon DAVID PARKER (Minister of Revenue): Referring first to the ACT member's question in respect of the question as to whether people can opt out, yes they can; there's provision for that.
In respect of the targeting, we are aware that on occasions, there will be a number of people in a household earning less than $70,000, who are over 18 years of age, who will get the payment, and that is our intention. We would note that, overall, this will be better targeted, than, we would suggest, alternative tax cut policies from the member's own party.
In respect of the issue as to the collection of bank accounts, there will be social media campaigns—well, not campaigns; that's the wrong word: information presented to people in order to encourage people to provide their bank account details through myIR, or, if they can't do it that way, by way of contacting Inland Revenue through other channels.
CHAIRPERSON (Hon Jacqui Dean): Matt Doocey.





MATT DOOCEY (National—Waimakariri): Thank you very much, Madam Chair. I think that was a very good choice, personally.
Look, I'm sure you'll agree that without having the select committee stage, there would have been a number of questions we would have liked to have asked the advisors, so I'm hoping I can take an exploratory route into some of the key areas especially that are coming up, in this first stage, with the supplementary analysis. I think I want to take the opportunity, with the Minister for Youth in the Chamber, as well, to understand what discussions went on about why under-18s who are living independently and working were excluded from this payment. I'm sure the Minister for Youth would have advocated for them to be included, so it would be interesting to work out why that was not agreed with, because, of course, there will be a number of young people under 18 who will be in the position where, quite rightly, they should be entitled, but they're 16 or 17 and maybe not 18. 
Looking at some of the advice in this document, it does say inflation has risen over the past year and is expected to be widespread and to persist in the future. This makes a one-off payment a poor mechanism for supporting households with a longer-term problem. So I'd be interested to hear from the Minister why they are pursuing against the advice. 
There's an interesting comment under the executive summary where it talks about other Government priorities that could be pursued using the funding for this payment—for example, initiatives that more directly impact on the interim child poverty targets. So, again, that would be interesting just to hear a bit more about the conversations behind that of why they didn't pursue something that maybe was more targeted and linked in to child poverty targets, as well. 
As has been referenced in previous discussion, but just to hear from this Minister, why it was continued with the Inland Revenue as the delivery agency, considering they weren't that interested in doing that. 
And, if I may, the final comment is under "Limitations and constraints of analysis". It says, "There is a risk that significant issues with the resulting proposal have not been identified." And this is to do with the compressed time lines. It would be interesting to hear from the Minister about how he's going to mitigate those significant issues so we don't have any problems with implementation.
Hon DAVID PARKER (Minister of Revenue): It is a deliberate design of the scheme to have it for people who are 18 or over and not younger, and we're not proposing to change that. I don't know if the member has a tabled amendment to that effect, but if he did have it, we would oppose it. 
In respect of the issues as to whether there are outstanding issues that are unforeseen, that's always possible as was outlined in the document that the member quoted from, but we're confident that there are no major issues that we've overlooked.





SIMON COURT (ACT): Thank you, Madam Chair. Minister, I have four questions, but I just want to offer a perspective first. You've chosen—the Government has chosen, through the Chair, to offer a $350 tax rebate to people earning $70,000 or less, who fulfil the criteria you've set out. While it's laudable that the Government does recognise that there is a cost of living crisis, and that it's a struggle for the economy, it's a struggle for communities, given the increasing costs—whether it's fuel, whether it's energy, building materials, the fact that even the Infrastructure Commission says it's taking so long to get resource consents—it's added billions and billions of dollars on to the cost of delivering infrastructure and homes over the past four to five years, which is primarily the term that this current Labour-led Government and the previous Labour coalition Government have been in power. So it seems like the cost of living crisis—while there may be other things the Government can point to—can largely be sheeted home to a series of policy failings or failing to address issues in a timely manner, Minister. 
But, thinking about what caused the cost of living crisis—and, of course, we have a significant increase in the cost of energy, we have a significant increase in the cost of transportation fuels which are contributing to the pressure on household budgets—I'm wondering: did you consider ACT's alternative budget, which would have changed the tax rates so that those earning up to $70,000 would have actually received a tax cut that would have given them over $2,000 in the hand, using the ACT tax formula which limits the two tax rates to 17.5 percent and 28 percent? So, Minister, you've offered—through this bill, through this amendment to the Tax Administration Act—a $350 one-off payment, and so I'd like you to consider how that contrasts with ACT's proposal to limit Government spending and allow a $2,000 tax rebate for people like nurses or teachers in the middle of their career, which is, typically, what they would earn—those middle-income earners who supported us through the COVID epidemic—pandemic, if you like—and who continue to do it tough out there on the front lines. 
So I have four specific questions for you, Minister: will people who are self-employed be eligible for this payment, who earn $70,000 or less on an annualised basis, as set out in this proposed amendment to the Tax Administration Act; if so, on what criteria will that eligibility be based? Will it be during the time period 2021-22 when they've issued invoices, or will it be when they've received payments? Because what we know right now is that many, many businesses are suffering from cash-flow issues because their customers are unable to pay on time. So it's absolutely vital that we understand, Minister: will the eligibility for small business—if they're eligible—and for self-employed people allow them to base that on cash flow, cash received, rather than invoices? 
My second question is: did the Minister consider any other ways to help Kiwis facing a cost of living crisis, particularly with their energy and transport fuel bills? For example, the ACT Party have proposed that the emissions trading scheme revenues—the billions that this Government, supported by the Green Party, had proposed to allocate to business, to buy them out of their coal-fired boilers, or to Auckland Council to buy them electric ferries to compete with Fullers Ferries, who've just bought their own hybrid electric ferry, a fantastic thing that can go right round the Hauraki Gulf, it'll be able to reach places that the Government-sponsored ferries couldn't ever possibly hope to reach. They can only go between downtown Auckland and Devonport—now, that's all you'd expect from a Government service, wouldn't you? It would be half-baked. It'd be mediocre. It'd be 10 times the price. 
Minister, did you consider offering Kiwis a carbon tax rebate of $250 per person or $1,000 for a family, on top of ACT's $2,000 tax cut for middle-income earners up to $70,000? And was this policy modelled? Was there any modelling as to whether this would have a benefit to individuals or to the wider economy based on this money coming out of the COVID Response Fund, and what is the Minister's response to Treasury who have asked, forgive me—[Time expired]
Hon DAVID PARKER (Associate Minister of Finance): Thank you, Madam Chair. As to the member's question as to whether we considered a tax cut of $2,000 per person instead of this amount, no, we didn't because we knew that would, if there was responsible fiscal management at the same time, require very substantial cuts in public services. We would also note that we don't think most New Zealanders agree with that as a policy prescription, because they know full well that the Government has had to draw down on taxes and some increased debt in order to fund the support needed to get people through COVID and to have the out turns that we have had, which is a return to growth to pre-COVID levels, and very, very low unemployment. So New Zealanders back what we have done and they know that that came at a cost and that the finances of the Government need to be restored and couldn't be restored without substantial cuts in services, if that sort of policy was pursued. 
In respect of that, as a percentage of GDP, I would note that our spending this year is 31.6 percent of GDP projected, compared with under the National-ACT Government in 2010-11, 34 percent of GDP. 





MAUREEN PUGH (National): Thank you very much, Madam Chair. I'll just unmask and enjoy the fresh air. This bill has, obviously, caught a lot of people by surprise today, and with the limited amount of preparation and notice that we've had, of course it's been a bit of a challenge working our way through some of the detail. 
But there are a few things that have become obvious quite early on in the piece, and I'm going to turn my attention to clause 5, new section 7AAA. It says in the bill that this scheme is going to be a grant, and I just wonder if the Minister can provide other examples where IRD administers and delivers grants to taxpayers or to recipients, as it is. 
The other thing I would like to know follows on from the contribution Simon Court has just made. Now, we heard earlier on from Matt Doocey that the IRD is going to need to increase their staffing levels by about 750 people.
Simeon Brown: How many?
MAUREEN PUGH: Seven hundred and fifty, Simeon Brown. And so we do know that that's going to be a challenge to do that recruitment, and we are now at the busiest time for Inland Revenue, as annual accounts are being finalised for a lot of businesses. So for these businesses, we are talking about a lot of them being small businesses, and these are the businesses that have been struggling over the last couple of years to even stay afloat. And what we want to be sure of is that their annual accounts are going to be able to be processed in a timely manner and that these people and these businesses will be eligible for this grant. So, in terms of the time frames, with the delays that we can potentially expect in the processing through Inland Revenue, can the Minister please give us some confidence that the recruitment will happen in a timely manner and that it's not going to delay the business as usual for IRD to process those annual accounts? 
We are talking about the small-business owners—the dairies, the cafes that have struggled so hard, the tourism operations that have struggled immensely over the last couple of years, and we're even talking about farmers. Even farmers may qualify for this grant, being under $70,000 in profit, so we want to be really careful that this is going to be administered efficiently, effectively, and in a very timely way. 
Now, if that doesn't happen, Minister, can we also get some acknowledgment from you, or confidence from you, that these grants can be made retrospectively? If in six months' time, annual accounts are still being finalised, can they go back and be retrospectively applied for, and, if they can, that's great; if they cannot, how can the Minister explain the fairness of that? 
I have one other point that I'd like to raise while I've got the talking stick, and that is about the bank account details that people may not have. The Minister has said that we are going to do some advertising and that there will be media around this and people will apply, but if they don't happen to see that—and I do know a lot of very young people that don't necessarily read the news channels on social media or the hard copy papers—and if they don't know about it and find out much later, are they still going to be able to apply retrospectively for this grant? Thank you. 
Hon DAVID PARKER (Minister of Revenue): I'll endeavour to answer a number of questions from prior questioners. In respect of the self-employed, they are included. The assessment is based on their net income, which is their gross income less allowable expenses before losses that have been brought forward. 
In respect of other examples of grants administered by the department, of course they were responsible for COVID support payments. 
In respect of staffing, not all of the 750 staff required are new. There will be redeployment of existing staff within the department. 
As to my confidence as to whether the department can deliver this, I think the exceptional work that was done by the department in respect of COVID support payments should give everyone in this House confidence that they will do it well.





DAMIEN SMITH (ACT): Thank you, Madam Chair. To the Minister, was any modelling conducted to assess the dollar per day per person rate for this cost of living payment subject to taking into consideration inflation? Does the Minister agree with Treasury? It warns that after this Budget, the tax increases or spending cuts pressures are inevitable. And will the management of this system by the IRD blow out the key performance indicators that I understand the IRD have, from my observation of them on the Finance and Expenditure Committee?
Hon DAVID PARKER (Minister of Revenue): Dealing with a question first from a prior questioner in respect of—a farmer, I think, was the example given by the member from the West Coast. The last date for applications from people who were—not applications. The last date when eligibility will be determined will be in March 2023. For people to be eligible by then, they will have had to have filed their tax return for the year ended 31 March 2022. If they haven't and they are late by that amount of time, then they will be too late to get the payment. 
In respect of the ACT member's question as to whether this will affect delivery of other services by Inland Revenue, they will be juggling between their different priorities, as they have often had to do during COVID periods, and they will use their judgment as to the prioritisation they give to their different functions. I'm expecting that their core functions will, by and large, remain unaltered, but there will be some reprioritisation. I am aware, for example, that they have put aside some of the compliance work they were planning early on in respect of the brightline test that was introduced by the previous Government and extended by us, and that has already been delayed because of priorities for other work, like administering COVID support payments. Those sorts of trade-offs have to be made within departments and will continue to be made over the coming years.





JOSEPH MOONEY (National—Southland): Thank you, Madam Chair. Minister, I just would like you to elucidate a little bit on why you set—or why the Minister established a cost of living payment totalling $350, being half the couple rate for the winter energy payment, as the amount to pay under this scheme? Noting that New Zealand is facing a significant cost of living crisis with the inflationary impact in our economy.
Noting that this is not something that's not unique to New Zealand, but is something that we are uniquely experiencing in New Zealand. But if we look overseas, for example, the United Kingdom is facing its biggest drop in living standards since 1956 as wages fail to keep pace with rising prices. Living standards, the disposable household incomes, when adjusted for inflation, are expected to drop by 2.2 percent this year, the biggest fall in a financial year since records began in 1956. So this is a serious, serious issue that New Zealand is facing.
But my question is: why has Labour decided to give a one-off $350 payment, and why is it set on that amount rather than looking at something like National's tax plan, which is a permanent plan, something that everyone would benefit for years to come? So it's a structural change to the system that would benefit people on an ongoing basis, in an inflationary environment that looks like it's going to run for some time—for example, under National's plan, anyone on $50,000 a year or more would get more from National's tax plan; if you're on $50,000, you would get $362 instead of $350 from Labour; if you're on the median wage, $57,000, you get $800 a year, rather than $350 from Labour; and if you're on the average wage, $72,000, you would get $875, nothing from Labour. I note that this would be an ongoing benefit that people would get under National's tax plan. This is going to be an ongoing issue with this inflation environment. It looks like it's going to continue for some time. 
So there's two questions there: why has the Minister not considered an ongoing adjustment to account for the ongoing issue with inflation? And why has the Minister set on a $350 cost of living payment on a one-off basis?
Hon DAVID PARKER (Minister of Revenue): Just for the benefit of the committee of the whole House and, in particular, Mr Bishop, I'm advised that that supplementary analysis report is now online as well as on the floor of the Chamber. I thank him for raising it to my attention.
In respect of the reason that we chose that amount, we thought that that was a worthy contribution to household living costs facing the cost of living pressures to which the member referred. It, of course, is in addition to the assistance that we've given through slashing excise duty, road-user charges, and halving public transport costs as well as various other supports that've been made to other subsets of the population who aren't getting this payment but have had other supports from the Government.
I would note that the gap between wages and inflation this year in the forecast economic indicators on page 158 of the Budget Economic and Fiscal Update that has been tabled today shows that inflation is forecast to be 6.7 percent during the forecast 2022 year, against wage growth of 4.6 percent. So we're trying to bridge part of that gap, but we think that we've got the balance right.





TANGI UTIKERE (Labour—Palmerston North): I move, That the question be now put.





SIMEON BROWN (National—Pakuranga): Thank you, Madam Chair. Look, there are a number of questions that we have still to raise on this side of the House. I do note that this bill has not been to a select committee, so whilst some members on the opposite side may wish to just want to let this piece of legislation pass into the night, it's important that the questions are asked, because that is our job—to hold the Government to account and to ensure that there is openness and transparency.
I do note that I don't believe the Minister answered my colleague Maureen Pugh's question in relation to the retrospectivity, because there will potentially be a number of issues in relation to some people who may not see the social media campaign—which I'm sure the comms department at Inland Revenue can't wait to get stuck into. They might need to grow the comms department to do that one too. But, regardless, some people might not get their details up to date so may not get their payments. So the question was: can they later on, maybe a couple of months after the payment system has finished, come back to IRD and actually get a retrospective payment? I think that's a very important question, because this is the Government of equality and equity and making sure that no one's left behind, but are they prepared to leave some people left behind through the incompetence of their systems?
The second question is in relation to the fact that this is a $350 payment. It's not a big payment. I think we can all agree $350 is not a lot of money. Even Glen Bennett, the one-termer from New Plymouth—he said it's only going to be able to replace two of the tyres on his car; not even the full set—just two. He's looking forward to doing it. Maybe less wheelies on the weekend; more MP work—that way he might get re-elected, but I doubt it.
But the point I'd like to make is it's 350 bucks. It's not a big payment. IRD is going through this huge bureaucratic process to work out whether people are eligible, etc., etc. They have to do that for every single payment. They have to check the eligibility of the particular person each month for three months to make sure that they are eligible for the payment. So, I guess, if they go into jail or they die, unfortunately, or whatever the situation is, or they suddenly get a pay rise, they go across—and, obviously, that's good news. 
But why is this just not one payment? Why did the Government come to the position where they wanted to have three payments? Is it just because they want nice comms for three months in a row? They're going to put out a press release on 1 August and say, "117 bucks is coming your way", and then on 1 September, "Another 117 bucks", and then on 1 October, "Another 117 bucks". Because, actually, I think there's a real question why this is not just being done once to give people the $350 that this Government is saying is the great cure for costs of living, the cure that they will be fixing this problem with. Why is it not just one payment to eligible people to ensure that not only they're able to get 350 bucks but they can then do what they want to do with the 350 bucks—if it's Glen Bennett, get his two tyres on his car fixed, and good luck to him; I don't think he's eligible, though, by the way—and then be able to actually make those decisions? 
But instead they get 117, then another 117, another 117, and, of course—
Simon O'Connor: How many red zeros can you buy?
SIMEON BROWN: Well, you can't even get a big red zero for 117 bucks—not even the whole $350. You need five grand—5,000 bucks. I'll tell you what, the average taxpayer in New Zealand, Mr Wood—their tax is around $10,000. That's two red zeros. So I just think for those taxpayers—
Chris Bishop: It's the red zero metric.
SIMEON BROWN: It is the red zero metric. Two red zeros—10 grand. That is a shame. He spent one New Zealander's entire tax they pay—entire tax they pay across an entire year—on two red zeros. Just disgusting. That's the wastage we see under this Government. 
But back to the point. Why are we not just having one payment? Not only does that give the people who are eligible—which is not including Glen Bennett, as noted before—the ability to make those decisions but also it removes, I'm sure, a significant amount of bureaucracy, and I'm sure that will save the taxpayer some money as well. 
I do ask the Minister, on that particular point, did the Government ask for advice around whether it should be one payment or three? Did the Inland Revenue provide advice as to whether it should be one or three and what might be more efficient for them? I do note that they have been scathing of the fact that they have, effectively, dropped this job on their department to do. Look, I mean, they're all good public servants. They will do the job. They will be stretched, and they'll have to hire another 750 people. But the point I make here is: was there any advice requested as to whether, actually, one payment or three and what the impact and the cost benefit or the cost addition to doing three payments instead of one might be; if not, why not, and, if so, what would be the saving to the taxpayer if it was actually just one payment to actually make sure that there was some efficiency and to improve the whole system? 
Look, I mean, the Minister might get up and say, you know, "Well, we don't want people getting that much money too quickly." I mean, 350 bucks; it's not even two tyres on Glen Bennett's car. We're not talking about big money. 
So in the cost of living crisis, I really just want the Minister to answer those questions, because, actually, he should be advocating for efficiency in the State service, efficiency in the Public Service, but what we see is wastage, emblematic mostly from Michael Wood and his two big red zeros.
Hon DAVID PARKER (Minister of Revenue): The member again made the assertion that these are 750 extra staff. Some of them will be reallocated within Inland Revenue. In respect of the year and the retrospectivity point, as the member described it, if eligibility is established by 31 March 2023, which, as I explained, is the date by which eligibility has to be established by the filing of a tax return for the year ended 31 March 2022—if they establish eligibility by 31 March 2023 but they don't provide a bank account, we do allow them another year to do that, and pay out later. But if they don't do it by 2024, we no longer carry forward the obligation to pay.
In respect of the issue as to whether we considered one payment compared with three, yes, we did. One of the reasons why we chose three was that it better reflects people's actual circumstances if, for example, they move off a benefit.





RICARDO MENÉNDEZ MARCH (Green): Thank you, Madam Chair. Just backtracking to the answer from the Minister regarding the exclusion of people on the benefit.
The Minister was drawing on, I guess, the fact that people on the benefit already receive the winter energy payment, and I've heard arguments around the fact that there's other lifts to incomes for people on a benefit. But I was wondering if, as part of the analysis of creating and designing this bill and the intent of this bill, the Minister sought any information around shortfalls that people on a main benefit have when it comes to meeting the cost of living. I know that there was no external consultation, but we do have research that does show that people on the benefit have pretty significant shortfalls when it comes to making ends meet.
I'm interested to know whether he believes that the winter energy payment allows low-income people to genuinely meet the cost of living and if he believes that's why they were excluded—because the evidence tells us otherwise—and, if so, I simply do not understand how the fact that people on very low incomes who may get a top up but yet somehow are still struggling to survive are excluded from this payment that, while modest, will make a difference. For people on a main benefit, it is the difference between often surviving, like being able to keep a rental. For people on closer to $70k a year, it's a much different impact having an extra $350.
So if we're genuinely concerned about the wellbeing of low income people, I just want to know what analysis was done around the ability for low-income people on a main benefit or people under 18 to actually be able to meet the cost of living.
Hon DAVID PARKER (Minister of Revenue): The analysis by Cabinet included the other measures in the Budget for beneficiaries, people on main benefits, including the pass through of child support payments and the extension of longer-term public transport subsidies for those on the community services card.
CHAIRPERSON (Hon Jacqui Dean): Matt Doocey.





MATT DOOCEY (National—Waimakariri): Thank you very much, Madam Chair. Excellent choice.
I just wanted to spend just a brief time, if I can, to ask the Minister a bit more about the cost of this scheme. So it is said in the paperwork, if I'm correct, $16 million, but then there is the reference to needing the full-time equivalents (FTEs) for 750, and there is a reference or a statement in there that Inland Revenue (IR) has sought funding. So I'm just getting some clarity: is the $16 million excluding the 750 FTEs or is it inclusive of that $16 million? And when it says that IR has sought funding, how much funding has it sought, and, then, I suppose, what would be the outcome if the funding was denied? Does that mean there wouldn't be anyone to administer the programme? So it would be helpful to understand the true cost of what the $16 million is and how much on top of that may be paying for the 750 FTE, which does seem a lot considering we do know the bureaucracy has grown by 10,000 under this Government—so you would argue there's probably someone with a bit of time around the beltway. So it would be helpful for us to understand the overall figure a bit more.
Just coming back to an original question where I asked the Minister about the exclusion of under-18s, I respect his comment that that is the floor, I suppose, or the minimum age, but I would just ask if he could tell the committee the reason why they've decided to keep it at 18 and not take it down to 17 or 16.
Hon DAVID PARKER (Minister of Revenue): In respect of the question as to administrative costs, the member is correct that the total is $16 million. Of that, $2 million is being funded by the department out of baselines. Therefore, there is $14 million additional. That $14 million funds the additional costs that the ministry will face through the taking on, for example, of the temporary staff. And it also includes a component for the ministry to catch up on some of the work that may be delayed as a consequence of this programme.





Dr TRACEY McLELLAN (Labour—Banks Peninsula): I move, That the question be now put.
CHAIRPERSON (Hon Jacqui Dean): I still have a number of members who are seeking the call in this Part 1 of this committee stage. I'm very mindful that this debate is in the context of a committee stage under urgency. The matters in this bill are substantial and the contributions thus far are relevant, and I don't believe I'm quite ready to take that call. Thank you very much.





IAN McKELVIE (National—Rangitīkei): Madam Chair, thank you. I've listened to this debate from the start with particular interest, and it occurred to me that there's a sector of our community that has been left out of all the Government initiatives that have taken place since COVID began. Those are the people I can easily relate to—although I don't claim to need the payment—and they are our superannuitants. If we look at what's happened to our superannuitants since COVID began, they've, effectively, been protected, but in a lot of ways that protection hasn't helped their cause from a mental perspective or a financial perspective. And the interesting thing about the financial perspective is that that one sector of our community, other than their normal increase or annual adjustment—I suppose you'd call it an inflation adjustment—have had no particular attention paid to them at all by this Government in the form of increased payments of any sort. 
The winter energy payment came in some four years ago, and was welcomed by those who didn't opt out of it. Some opted out it—and it's an odd way to do something isn't it, when people opt out rather than opt in. I'll get to my question in a minute, but if you look at the average income of a couple on superannuation, Government superannuation, it's not going to amount to anywhere near $40,000, including the winter energy payment. Yet here we are making a payment to people on an income of less than $70,000, but we haven't included our superannuitants in this payment. My question to the Minister is: why have we not considered them? I understand the issue with respect to means testing—we don't do means testing in New Zealand but I understand the issue that you could raise with respect to this. But there are a lot of superannuitants, the vast majority of superannuitants, in fact, who live on that $35,000 to $40,000 a year. Why weren't they considered for a payment as part of this bill?
Hon DAVID PARKER (Minister of Revenue): Because the annual adjustment of superannuation is the higher of inflation or wage increases. So if we look back in recent years—and, again, the table on page 158, the economic indicators, records that in recent years—and I'll just go back to, say, 2018. In that year, average wages increased 2.8 percent, inflation increased at 1.5 percent, so the increase of super was well ahead of inflation that year. The following year, inflation was 1.7 and average wages increased 4 percent. Again, superannuitants would have had an increase based on wages, which would have been ahead of inflation. 
Similarly in 2020, their increase would have been based on the wage increase of 3 percent relative to inflation of 1.5 percent. Last year, it was closer: 4 percent wage increase, still ahead of 4.3. This year, inflation is forecast to be higher than wage growth and therefore superannuitants will get the higher of those two figures: the inflation figure of 6.7. So they're not in the same position as low to medium income wage earners in respect of the cost of living pressures. That is not to say that they do not face cost of living pressures—they do, but the situation is slightly different.





SIMON COURT (ACT): Thank you, Madam Chair. To the Minister: for context, there's an analysis published by Thomas Coughlan from New Zealand Media and Entertainment, who has reported that Treasury thinks that the Government would have to deliver one of the biggest ever Budget spends next year just to stand still with inflation pressures, which are likely to add to the cost of the Government's programmes by $3.5 billion next year. Now, that's Treasury advice, which I'm sure the Minister has seen. So that raises a real dilemma for this Government and for a future Government in having committed to such extraordinary growth in spending, $6 billion this year on top of spending in previous years.
Question for the Minister: is it likely that a payment such as this one-off payment would need to be paid next year to account for the cost of living increase that New Zealanders will face? At the moment, inflation's running around 6.9 percent. That would add, by my brief calculations, for somebody on $70,000 a year, which this payment is targeted at, if their cost of living was increasing by the rate of inflation, that would be an over $4,000 a year increase in their cost of living.
So, look, is it possible that this payment would have to be replicated next year? Will the Government be able to afford it? Is this payment inflationary on top of all the other Government spending with clearly no ability to manage any reduction in spending in any single department? 
The assumption is, from the Minister, that there would have to be cuts in order to deliver ACT's tax cuts, and he's pointed to various aspects of baseline services, which ACT rejects—in fact, if you read our alternative budget, it's quite clear, we propose to maintain baseline spending and deliver front-line services in education and health. The cuts that ACT propose to save money to fund our $2,000 tax cut for somebody on $70,000 a year actually come from deleting ministries which deliver no value to the taxpayer, which are completely unnecessary. But you can read all of that in ACT's alternative budget.
So the question for the Minister: does he agree with Treasury that warns that tax increases or spending cuts will be needed next year, and is this measure inflationary or is it simply signalling that the Government will have to give New Zealanders a much-larger tax rebate next year, and is this being funded from debt or is this being funded from earnings? Because, Minister, if it's being funded by borrowing from future taxpayers, from future generations, is this even ethical if the Government's not prepared to look at its operational spending, which it's also funding from debt, and make necessary cuts to wasteful Government spending?
Hon DAVID PARKER (Minister of Revenue): Of course, this year's spending includes a one-off substantial payment to clear the historic deficits of district health boards that have accrued over a long period of time. That won't repeat.
In respect of the total spending as a percentage of the economy, as I have said in earlier contributions—I think I've been over this a number of times—this year, it's projected to be 31.6 percent of GDP; next year, even taking into account inflation on both the revenue and the expense side, it's projected to be 31.1 percent of GDP; the following year, 30.4 percent of GDP. I think, as the member would've heard earlier, the date when we return to surplus is one year earlier than was achieved by the National-ACT administration following the global financial crisis. I would also note that those spending figures, as a percentage of GDP for this year, are 31.6 percent, compared with 34.1 percent of GDP spent by the ACT-National coalition in the 2010-11 year.





SIMON WATTS (National—North Shore): Thank you very much, Madam Chair. Look, I want to come back to a question that I asked the Minister before and have not been provided an answer; it's pretty important, it's in regards to clause 5, new section 7AAA, in regards to the eligibility payments. So these payments are going to be automatically made to people's bank accounts. The question I ask, quite simply, is: can the Minister confirm that Inland Revenue holds date of birth information for taxpayers and all the taxpayers that are going to be eligible for this payment? Everyone over the age of 18 who meets the other criteria are going to get the payment, but does Inland Revenue have that date of birth information? If they don't, I want to understand—well, obviously, there's going to be a significant issue in terms of the ability to actually make the payment. So that's my first question.
The second question in regards to the eligibility criteria under clause 5 relates to the statement around the fact that—and it's the fourth bullet point—and it's around "and present in New Zealand". And so my question here is: when must you be present in New Zealand? Is it from 1 August to 31 October? Can you leave New Zealand after the third payment on 1 October? For example, can you go on holiday? Can you go on holiday during that period? Maybe to anywhere outside of the country for a short period of time, particularly if you're 18 and maybe say your parents are saying, "Look, we're going to take you on a holiday." That would be reasonable, and they would earn under the income threshold.
And the aspect around this, again—and I asked a question around information sharing before between the Inland Revenue and Ministry of Social Development, of which the Minister did not answer that question either, which gives me more concern that, again, I ask the question: does IRD and the Ministry of Social Development have an existing information sharing arrangement which covers the winter energy payment? A key criteria for this payment. He hasn't been able to answer that question, and, again, that is concerning.
But my point around being present in New Zealand is: does Inland Revenue have an information-sharing arrangement with New Zealand Customs? In order to substantiate the criteria for this payment, Customs is going to need to provide information to IRD to stop people at the border or identify someone who's leaving New Zealand who may be not eligible. And what's interesting, and I quote from the Ministry of Social Development website in regards to the winter energy payment, is: "If you're heading away from New Zealand over the winter months, we can keep paying your winter energy payment for up to 28 days. Tell us if you plan to leave New Zealand for more than 28 days, otherwise we might pay you too much and have to ask for some money back." So I want to understand in regards to that those series of questions.
And, lastly, in regards to will the Inland Revenue be assessing or analysing prior year earnings for individuals and taxpayers to ensure that they haven't artificially had or earned net income of $70,000 or less? And why I ask that is because we've seen graphs from Inland Revenue that indicate that Inland Revenue actually thinks that taxpayers are artificially paying themselves $70,000 or less in regards to personal income tax. So those questions I'd appreciate a response from the Minister.
Hon DAVID PARKER (Minister of Revenue): In respect of tax residency, it'll be based on annual tax residency, not whether someone's gone on holiday for a couple of weeks to Australia. 
In respect of the issue that was asked as to the date of birth, generally IRD does have date of birth information. Sometimes there are gaps. Where there are gaps and people think that they're eligible for the payment, they'll be able—through the means that we talked about earlier—fill in the data gap in respect of the date of birth and things will flow from there. 
In respect of the winter energy payment, the criteria, yes, we do have data-sharing agreements with Ministry of Social Development, but we don't actually rely upon them for this, because the eligibility for this payment is based on not being eligible for the winter energy payment, and that's clear from pay returns that come through the revenue, so can be automatically matched.





DAMIEN SMITH (ACT): Thank you, Madam Speaker. I listened with interest to the Minister's response in terms of how this figure was ascertained, and it was explained that it was the difference between wage increases and inflation, and we just settled on a figure. When I asked Treasury today how they defined lower and middle income wage earners, they did not have an answer for me. It's not in the appendix of any of the documents I've read today. So I ask the question again: was any modelling done to say this would be 250, 350, 450? And is there any sensitivity analysis about how you've linked this to the cost of living scenario that people are facing out there?
Secondly, the question again is: was it appropriate to appropriate the $1 billion from the COVID fund when COVID hasn't been totally wound down, to this programme, as it's a cost of living crisis programme not a COVID fund programme?
Hon David Parker: Madam Speaker.
CHAIRPERSON (Hon Jacqui Dean): The Hon David Parker.
Hon DAVID PARKER (Minister of Revenue): "Madam Chair", I should have said; sorry about that. As to the appropriateness of deciding that it was timely to bring back some of the COVID recovery fund payment into the core and use some of it, we thought it appropriate.
In respect of the issue as to the wage threshold, or the $70,000 threshold, that was based on the average wage being around $65,000, and we thought that that was slightly above that. It was an appropriate cut-off point.





TANGI UTIKERE (Labour—Palmerston North): I move, That the question be now put.





A party vote was called for on the question, That the question be now put.
Ayes 67
New Zealand Labour 65; Te Paati Māori 2. 
Noes 42
New Zealand National 32; ACT New Zealand 10.
Abstentions 10
Green Party of Aotearoa New Zealand 10.
Motion agreed to.
The result corrected after originally being announced as Ayes 77, Noes 42, Abstentions, 10.





CHAIRPERSON (Hon Jacqui Dean): The question is that Ricardo Menéndez March's tabled amendment to clause 4 replacing subclause (2) to amend the definition of a cost of living payments scheme be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 12
Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.
Noes 107
New Zealand Labour 65; New Zealand National 32; ACT New Zealand 10.
Amendment not agreed to
CHAIRPERSON (Hon Jacqui Dean): Order! Members will be silent during the vote. [Interruption] Right, that member will stand, withdraw, and apologise.
SIMON O'CONNOR (National—Tāmaki): I withdraw and apologise.
A party vote was called for on the question, That Part 1 be agreed to.
Ayes 67
New Zealand Labour 65; Te Paati Māori 2.
Noes 42
New Zealand National 32; ACT New Zealand 10.
Abstentions 10
Green Party of Aotearoa New Zealand 10.
Part 1 agreed to.
The result corrected after originally being announced as Ayes 77.





Part 2  Amendments to Income Tax Act 2007
CHAIRPERSON (Hon Jacqui Dean): Members, we come now to Part 2. This is the debate on Clauses 7 to 9, "Amendments to Income Tax Act 2007". The question is that Part 2 stand part.





Hon DAVID PARKER (Minister of Revenue): It might assist the House if I explain this short part. It has two provisions. One is to say that the cost of living payment, when received, is tax-exempt; so there's no tax charged on the payment received. That's clause 8 of the bill. And then clause 9 says that it doesn't affect other payments like Working for Families.





SIMON COURT (ACT): To the Minister, you've just pointed out that this is a very brief amendment and that the payment is tax-exempt, but are taxpayers exempt from having to fund this payment? All of those taxpayers who are not eligible for the payment are not exempt from the cost of making the payment.
So I'd like the Minister to consider the impacts of this piece of legislation, which has been brought to the House under urgency tonight, whether taxpayers are exempt; whether, in fact, those even receiving the payment, who are taxpayers, are exempt? If the money has been borrowed and appropriated from the COVID response fund, which was borrowed to respond to the COVID pandemic situation when New Zealand's borders were closed, where aircraft had stopped flying to New Zealand, which meant that the Government at the time had to say, put funds into Air New Zealand to make sure there was cargo coming, is it appropriate that this payment, this one-off $350 payment—which amounts to less than a dollar per day over a calendar year.
Now, when I was a young person and I used to watch television, ads would come on the television, and they would say—they would say—please donate money to this poor country where people earn less than $2 a day, and yet this payment is for a dollar a day, which wouldn't have even solved poverty in an impoverished, starving country in the 1980s.
So a dollar a day, let's just consider the $350 payment, which the Minister says that people who receive it will be exempt from paying tax on. So let's assume that that's your starting point, Minister. These individuals who receive the payment will live in a country called New Zealand, which has borrowed tens of billions of dollars to fund the COVID-19 response. That's where the money has been appropriated from. That money was intended to deliver shovel-ready projects, most of which the shovels are still sitting in the shed, clean and shiny, apart from the ones which potentially Minister Wood or Minister Parker or Minister Robertson—if he's here—have held for a moment, just long enough to get their fingerprints on the shaft while the shovel touched the ground so they could get that photo op for the shovel-ready projects.
But let's just come back to what the COVID-19 response fund, which this is appropriated from, was for. It was to respond to COVID, and it was borrowed. So it would appear by your statement, Minister, that these payments are tax exempt, ignores the enormous debt elephant in the room that this Government has created, which is that even the taxpayers who receive this payment will be liable through their future taxation to pay the interest on the COVID-19 debt, to pay that interest potentially for decades as these bonds mature over time, and at a much higher interest rate, no doubt, than the Government assumed they could borrow the money from when they took it from the air or hit print over at the Reserve Bank and created the money out of thin air, that money that has since created an inflation pressure that is common to all countries around the world which have used money printing to generate some kind of revenue for their Governments at a time when they weren't collecting money from normal business activity. So to say that it's exempt from tax, Minister, appears to be missing the point that every taxpayer who receives it and everyone who doesn't will, through their taxes, pay for it in the future through the interest on the COVID-19 debt that that Minister, who is part of this Government, is responsible for incurring on behalf of New Zealanders. So I want the Minister to explain how taxpayers are not going to pay for this.
And, Minister, considering that and considering what other options the Minister had—as I pointed out before, at the current inflation rate of 6.9 percent, the cost of living increase for a New Zealander on $70,000 a year is over $4,000. So does the Minister seriously believe that this $350 payment, less than $1 a day on an annualised basis, is going to make any difference whatsoever in the quality of life, in the wellbeing, and the family circumstances of people earning the average wage in New Zealand? If he can get up and explain this then, then the ACT Party might potentially support it. But at this stage we wouldn't.
Hon DAVID PARKER (Minister of Revenue): The latter part of that contribution related to Part 1, so I won't respond to it. The earlier part was repetition of the same point made by his colleague in respect of Part 1, so I won't repeat my answer.





SIMON COURT (ACT): Thank you, Madam Chair. So would the Minister care to explain, in terms of Part 2, clause 8(cb): "a payment under the cost of living payments scheme, as defined in section 3(1) of the Tax Administration Act 1994:", which he described as not being subject to taxation for those who receive it, does not have a tax implication for all New Zealanders who will have to pay back the debt that this Government has incurred, the debt that the COVID-19 response fund represents, which the Minister has called on to use not to save New Zealand from COVID-19, not to protect us from COVID-19 coming across the border or to make sure that freight and logistics can move stuff in and out of the country—would the Minister care to explain how, while taxpayers who receive this payment are not required to pay tax, in fact, they don't have any future tax obligation to pay for this one-off payment? Minister, could you please explain that in terms of Part 2 of the bill? 
Hon DAVID PARKER (Minister of Revenue): The clause is very clear. It means what it says, which is that the payment when received by someone is not taxable.





BARBARA EDMONDS (Associate Whip—Labour): I move, That the question be now put.
CHAIRPERSON (Hon Jacqui Dean): The question is that Part 2 stand part—sorry; a bit of late-night confusion. I was putting the question; so I will continue putting the question. The question is that Part 2 stand part.





A party vote was called for on the question, That Part 2 stand part.
Ayes 67
New Zealand Labour 65; Te Paati Māori 2.
Noes 42
New Zealand National 32; ACT New Zealand 10.
Abstentions 10
Green Party of Aotearoa New Zealand 10
Part 2 agreed to.
CHAIRPERSON (Hon Jacqui Dean): Members, the time has come for me to leave the Chair. The House will resume at 9 a.m. in the morning. Good evening.
Sitting suspended from 9.56 p.m. to 9 a.m. (Friday)