Parliamentary debates: Wednesday, 17 September 2025

Good morning. When we finished last night, we were on the first reading of the Income Tax (FamilyBoost) Amendment Bill.

Labour will be supporting this bill. It puts money in the back pockets of New Zealanders at a time when it is desperately needed. We are facing some real difficulties with the cost of living, particularly here in New Zealand. The rest of the world is moving on. The rest of the world seems to be out of a post-COVID low and getting towards a more level state—perhaps even a bit of a growth state—but New Zealand is stuck. The reason we’re stuck is thanks to this Government and its lack of vision, and in particular, its narrow view of what to do to support an economy—nowhere seen any more so than in the 19,000 jobs that have been lost in the construction sector, the 19,000 jobs that put money in people’s pockets that was then circulated through the economy and supported other families. We are in a cost of living crisis precisely because of this Government.

Let’s think about the nature of that cost of living crisis. Food prices in the last year, when that party was in Government, are up 5 percent; fruit and vege are up 8.9 percent; meat is up 9.4 percent; bread is up 9.5 percent; cheese is up 14.3 percent; milk is up 15 percent; electricity—when that party is in Government—is up 11.4 percent. All they do is bleat about the oil and gas changes, changes that wouldn’t have had an effect for 15 years. Yes, there is a cost of living crisis caused by that Government.

Because people need money in their back pockets, we will support this bill, which puts money in people’s pockets, but—and here’s the big “but”—the real story is not the changes that are going to put money in people’s pockets; it’s the absolute great and glorious clustermuck that led to this point, the great and glorious mess that was created by that party, with what they promised and simply could not deliver. That party promised that families in New Zealand would get up to $250 a fortnight in tax relief. That was what they promised. Of that, $150 a fortnight was to come from FamilyBoost. It turns out that that party cannot find a single family that has received the full $250 a fortnight. They promised that 100,000 families would get FamilyBoost. They promised that, and what people heard was that 100,000 families would get $250 a fortnight back—carefully phrased in terms of “up to”. We’ve gone looking for that family that might’ve received $250 a fortnight, and not a single family can be found. In fact, only 244 families have received the full amount of FamilyBoost.

That’s why we are in this House today. It’s not because that party is being generous, it’s not because they have a good policy here; it’s because they mucked it up the first time around and, now, they are coming back to try and fix it. It is a catch-up. Frankly, the fact that it is a catch-up and the fact that families have not been able to get the money from FamilyBoost, and the fact that no one, as far as we know, has received the $250 a fortnight that that party promised and the fact that we are here today speaks to the bureaucracy and the difficulty of this particular payment that is supposed to put money in families’ back pockets. We are here today, fixing up the mistakes that that Government has made.

In terms of the number of families who have received FamilyBoost, what we know is that, so far, only 27,000 families have received money each quarter. Now, there are more families that have received some money, but only 27,000 families have received money each quarter that this policy has been in place. In order to claim the money, those people have to keep their childcare receipts, feed them into Inland Revenue, and claim the money back. The bureaucracy is amazing, and that is partly why only 27,000 families have gotten a bit of money from it.

If that Government had been serious about supporting families, they would have adopted a much simpler policy. The policy that we had on offer, the policy of extending 20 hours’ free early childhood education to more children, and to ensuring that children aged two and up could be in subsidised childcare, would have helped all families without the bureaucracy. We are supporting this bill because it gives money to families, but all it is is a huge mess.

Mōrena e te Pika. Kia ora and mōrena e te Whare. I want to start with a whakataukī, because it is Te Wiki o te Reo Māori—a relevant one, I think.

Ko te manu e kai ana i te miro, nōna te ngahere; ko te manu e kai ana i te mātauranga, nōna te ao—the bird that partakes of the berry, their domain is the forest; but the bird that partakes of knowledge, their domain is the world—which I think sits off the foundation of what we actually all should be thinking about when it comes to doing the best that we can for our tamariki and for our mokopuna.

Unfortunately, when I look at this bill—acknowledging it is a bill that has come through here with urgency—we were expecting it to address some of the fundamental flaws that we saw when this scheme was first introduced into the House, but we see that those have not been addressed. For example, we still see that what has been outlined will still be administratively burdensome to claim the tax credit, particularly for busy low-income families. It’s a retrospective refund, so many families will struggle to be able to get that. What that means is you’ve got to be able to have cash on hand, first of all. You’re going to get a refund, but it assumes that parents are actually going to have the money in their hands as well.

We are in the middle of a cost of living crisis. We only have to look around the streets where we see so many different sectors striking. I was watching the news this morning. Teachers are going on strike. They’ve had nurses on strike. There are issues right across as well. All of these people in all of these sectors all have parents in them, and some of them will have young children as well, so folks have to reach into their pockets to be able to pay for their tamariki and their mokopuna to go to early childhood education (ECE).

Also, I am just noting that over the first year—and I’m assuming that’s why this bill came here—only 249 families claimed the full tax credit, despite the Government expecting that thousands of people were. So the idea that this is going to all of a sudden open up the floodgates is also of concern, when actually what we should be doing is making ECE free. We should be making ECE free. We should be addressing the core problem with the ECE sector, which is that it has been gobbled up and controlled by private companies. Just to note that the Government spends around $2.7 billion on early child education each year, so it doesn’t make sense that the cost for whānau is still so incredibly high.

It’s the system that we have as well. We only also have to look at the disproportionate pay that people get. If you’re a kindergarten teacher, you are going to get paid substantially more than if you are in a privately run early childhood centre, despite doing the same job with the same hours. It points to the fact that, actually, this bill doesn’t address all the problems. It is, unfortunately—and I hate to use the analogy—rearranging the deck chairs on the Titanic. The issue is: if you’re rearranging the deck chairs on the Titanic, what’s the point if all you’re going to do is get a better view of the iceberg?

It is important, I think, for the Greens to put on record that what we would do in terms of our reforms would be to put early childhood centres at the centre of it; not tax cuts for landlords, not tax cuts for tobacco companies, not prioritising millions and millions of dollars on defence for what I can only see is pandering to the Trump administration.

Oh!

We should actually be putting at the heart early childhood education. I can tell from responses from the other side over there as well, and the fact that this bill has come to the House under urgency—they’ve kind of just tacked it on because the plan as designed isn’t working. It isn’t addressing the fundamental flaws within the system itself. That is why it’s so incredibly important that we bring more equity into that system, that we actually move the system to be more run by community-led early childhood centres and we make it easier for families to be able to take their kids. The Greens had been advocating for free ECE.

As I started, I will end as well with another whakataukī—I’ll end with the same whakataukī, because maybe there’s some understanding there for all of us: ko te manu e kai ana i te miro, nōna te ngahere; ko te manu e kai ana i te mātauranga, nōna te ao. Let’s do better, whānau, kia ora.

Thank you, Mr Speaker. Well, I am proud to be part of a Government where ACT is actually fixing what matters. You know what? This bill—and I’m pretty astonished, actually, that the Opposition is actually supporting it, given all the hype that they’ve been rousing around this isn’t enough, there’s not enough families getting enough money out there. But what I am proud of is for the first time in a long time, we have a Government that has recognised that the middle is getting completely squeezed.

Maybe I should give a little bit of a history lesson to the Opposition around what has been happening in New Zealand. We have seen lower incomes rising time after time, we’ve had really big increases in the minimum wage—and, yes, we’ve seen some upper wages increasing too—but the bulk of New Zealanders, the middle class, the mums and dads haven’t seen wage increases in 10 or so years. This is where it’s really hurting everybody. We’ve seen high inflation, we’ve seen the cost of living going through the roof, and this bill aims to put some measures back to those that are getting up every day, getting out there, earning money. They’ve got their kids, they need to put them in some childcare because in today’s day and age, both mum and dad do need to work to get ahead.

This is a step in the right direction. By lifting the threshold and lowering the abatement, the Government is finally recognising that middle-income families are actually feeling the squeeze too. I’m really proud of that because this Government is focused on fixing what matters to New Zealanders. I commend this bill to the House.

New Zealand First supports this bill as it delivers the relief that households deserve and helps parents stay in the workforce and invest in the early education of our youngest New Zealanders. It’s a shame that the member did a little hit and run from across the aisle with the attack on the economy, but I would just like to show that, sometimes, good ideas can come from wherever you think they least come from.

When I was running the Institute of Public Policy, I had Dr Ian Hassall, an ex - Children’s Commissioner; and Dr Emma Davies, who was specialising in research around children, and we had a debate about productivity. So I asked, “Where is the best place to invest if you want to increase productivity in the long run?” It is in children and early childhood education. That is where you’ll get the greatest benefit because that’s where they’re learning the most. We commend this bill to the House for many reasons, this being one of the primary ones. Thank you.

The National Party’s very, very happy with this bill. It increases the percentage of early childhood education expenses claimable from 25 percent to 40 percent, raising the maximum quarterly tax credit from $975 to $1,560. That means up to $6,240 per year for families—a great cost of living initiative.

Thank you, Mr Speaker. It’s a pleasure to be able to speak on the Income Tax (FamilyBoost) Amendment Bill. Just to pick up a point that Dr David Wilson raised in his speech, it is true that the first five years of a child’s life is incredibly important, particularly the first two years. In the first two years, a child is more likely to be able to learn languages, to be able to retain information, and the brain synapses and the connections that they have in those first two years is incredibly important. So I want to acknowledge the points raised by Dr David Wilson.

As many people in this House know, I am a mother of a lot of children. We have been very fortunate—for a number of our children, we didn’t have to send them to early childhood education (ECE). We didn’t have to send them to an early childhood education centre because we had to; we could send them to an ECE because we wanted to. We also had the privilege of being able to have one parent stay home, and that’s because we made the choice that it was going to cost more in ECE—it was going to cost more than our mortgage payments to be able to send our children there. We made a conscious decision as a family, and a financial decision, that one of our parents would stay home because those connections in those first five years are so important for the growth and development of children going forward.

This particular bill, as much as the Government members will be very happy to bring this bill to the House, is actually an admission of the failure of this Government’s policy. This policy has been a failure. There have been a number of statistics, which Dr Deborah Russell referred to, that have shown this policy to be a failure. Initially, the Government, when they were campaigning, said 130,000 families would be applicable for FamilyBoost. When they got into Government, those numbers were revised down to 100,000. What we have actually seen, as Dr Deborah Russell has talked about, is that only 27,000 families have consistently received FamilyBoost since its inception last year on 1 July 2024. That’s only 27,000 families who have actually received it consistently.

Why I wanted to point out that particular statistic is because—going back to my earlier point—some families have no choice but to send their children to an early childhood education centre because they need to work. But yet the Government promised 100,000 families would be able to get FamilyBoost, but, to me, it is a failure if only 27,000 families have been able to actually consistently get this for the last four quarters.

The other element and the other statistic which Dr Deborah Russell spoke about was the fact that there were meant to be 21,000 families who were able to receive the full amount of the FamilyBoost. For members of the House, just to remind them, that was around up to $975—that was the maximum amount, but, actually, the statistics have shown over the last four quarters only 244 families have actually received the full amount.

The reason why I want to lay out these statistics is for the reason why this side of the House, why the Labour Party, is supporting this bill. It’s because we acknowledge this is a Government failure—of their policy. We acknowledge that times are really tough for families right now in Aotearoa. We know that food prices, energy prices, insurance premiums, rates, those administered costs have gone up, so we support this bill because we want families to get the little that they can in order to support them. That does not mean that we accept that this policy is a success, because, quite clearly, the statistics show it has not been a success.

What it also shows is that that Government has broken a number of promises to Kiwi families. Again, the other statistic that Dr Deborah Russell talked about was the zero. That side of the House, the Government, cannot find one family—one family—that has received the full $250 that was promised during the election campaign. That is a travesty because, ultimately, there would have been families across the country who would have depended on that, who would have depended on the $250 to help plan for the year. Instead, we only have $975 going to 27,000 households. That is a really poor policy, a super poor policy, which is why Labour will support this bill, because it’s fixing up the mess—fixing up the mess that Nicola Willis—

Ha, ha!

—because of her failure to be able to put in a policy that actually worked—and she may laugh about flip-flop, but that’s the problem: she’s not taking it seriously.

It’s funny when they talk about poor policy but then say, “Oh, but we’ll support it.” Sixteen-thousand families will be better off with up to $1,560 a quarter. I commend the bill to the House.

Mr Chair—oh, Mr Speaker.

The Hon Willow-Jean Prime.

Sorry, Mr Speaker. I’m still collecting my thoughts after listening to the Minister of Finance laughing over there at the contribution of my colleague the Hon Barbara Edmonds; the Minister gleefully laughing and welcoming Labour’s support for this legislation this morning, not listening to the reason why Labour is supporting this. Labour are supporting this to fix up your mistake—sorry, Mr Speaker; not you, sorry, Mr Speaker—the Minister of Finance’s, the Government’s mistake.

This Government promised—promised—New Zealanders at the election that this policy would bring much-needed relief in a cost of living crisis, and here we are—

60,000 families, Willow-Jean.

Oh, now? Now, because you didn’t do it at the beginning? What about the ones you promised at the election? Then, almost two years later, here is the Minister fixing up her mistake. This is an admission that they had not done the work on their policy to be able to deliver it. I do wonder if this was because they never wanted to spend the money in the first place.

Mr Speaker, you have heard the House ask time and time again: where is a single family who has received what this Government promised? They have not been able to show this House one single family who has received what they were promised prior to the election.

This legislation that we are discussing this morning is an admission by the Minister of Finance that her original policy got it wrong. To fix up that mistake, here is a piece of legislation that is now promising that it will reach further numbers of people. We will hold this Government to that. We will hold this Government to showing us the full 60,000 people who are going to benefit from this policy.

One of the things that parents have raised with me is the poor thought that was put into this policy development—the hurdles that they have to jump through, as busy parents, to access much-needed support in a cost of living crisis. This Minister is putting more life admin on busy parents. There are much simpler ways that this Government could get some money to our busy families who require it, but, no, this Government and this Minister want to make that as difficult as possible.

This policy is coming so late in the piece. Why did it take the Minister of Finance so long to admit the errors that were made, the broken promises to the voters, to finally come into the House now and fix this mistake? Yes, Labour are supporting this because we recognise that families are doing it really tough, that they need real action on the cost of living, that this Government should not have taken almost two years to admit its errors and to fix up its mistake and finally make this available to those families. We are supporting this legislation this morning because they should have been getting this all along, instead of being given promises from this Government which were then broken.

In the final 40 seconds, what I want to point out is that the policy from the Child Poverty Action Group—it says: “The failures in the policy design are ones [that they were] warned about … the high administration costs, the retrospective nature of it, and not knowing if you will receive it from one quarter to the next. These failures are reflected in the poor [uptake].” I implore the Minister to look at how she can make this more administratively straightforward for our families who are struggling. What is she going to do about that?

In summary, I commend this bill to the House.

I move, That the Income Tax (FamilyBoost) Amendment Bill be now read a second time.

As I set out in my first reading speech, this bill expands the successful FamilyBoost scheme to help more families pay for their early childhood education costs, and it means that households will get larger rebates on the early childhood fees they pay.

This bill has become quite symbolic of the journey that the Labour Party in particular has been on in which the arc of sensible policy has bent towards pragmatism because, of course, the Labour Party’s position, to date, has been to oppose this form of cost of living relief for families with young children and early childhood education. They voted against the FamilyBoost scheme, but, of course, that scheme has gone on to ensure that more than 60,000 families—colleagues, more than 60,000 families—have benefited from cold hard cash going into their family bank account that they would not have otherwise received, as a result of this scheme because it has successfully provided rebates to families who face high fees and have children in early childhood education.

Now, Labour opposed that, and that was curious to me because it did seem somewhat contradictory to be calling for cost of living relief but voting against one of the more concrete things that our Government has done to deliver it. But today, we have had a moment of sense in this Parliament, and I want to commend colleagues opposite for supporting the FamilyBoost scheme. It’s OK to have a flip-flop when you end up on the right side of the flop, and so good on you. You’ve come around, you’ve seen wisdom. FamilyBoost is an excellent scheme delivering real income relief and it’s great that the Parliament as a whole can get behind it, and I look forward to colleagues across the House promoting this scheme to the constituents in their electorates, encouraging families to apply for this rebate and get the relief that they deserve.

I note we do still have a hold-out and that’s the Greens, and I look forward to some gymnastics to explain why it is that families with young children should not get this income relief. I’m sure the Greens will somehow link it to climate change and, possibly, Palestine.

Now, what does this scheme mean? It means that the abatement rate for families earning more than $140,000 per year will reduce and the changes will put more money in the bank accounts of those households currently receiving FamilyBoost. So, in effect, where they once got 25 percent rebates on their fees, they’ll now get 40 percent. So for those 60,000 families that have already made claims and said, “Actually, this is pretty easy. All I did was I went to my very cooperative early childhood education centre who put together a three-month invoice for me.”—as many of them have—“I uploaded it on to the IRD website and, a couple of days later, the cash went into my account. Now, next time the cash goes into my account, instead of it being 25 percent of the fees, it’ll be 40 percent of the fees. I’ll be getting more money in the future.” Great news for those households.

But here’s the next thing: because we are changing the abatement rate, we are extending the group of households who are now eligible for this scheme. Where once there was a cap on the family income, we’re now expanding that out so that families with incomes of up to $229,000 will now be eligible. What that means is that thousands more families can now apply for rebates on their early childhood education fees.

I know this is really meaningful, and I suspect that’s what’s happened with the Labour Party’s voting decision today, because I have met with families who have said to me, “Look, we really like this scheme, but we’re just on the outside of it because between my income and my husband’s income, we’re just over the limit. Would you look at expanding the limit so that families like ours can be eligible for it?” That is what we have done. We have responded to that, we have listened to that, and we have expanded the scheme so that more families can be eligible.

I just want to point out something that has always been the case, which is that the amount that households receive through FamilyBoost depends on one thing in particular, which is how much they actually pay in fees for early childhood education. I want to acknowledge that not all families face high early childhood education fees, and that’s for a range of reasons. Sometimes, it’s because they don’t have their children enrolled for many hours because of their care and work arrangements. Often, it’s because their early childhood education service doesn’t charge very high fees and by the time they get their 20 hours subsidy, their Ministry of Social Development subsidy, there’s not much fees left to pay. However, regardless, families who are within the income threshold, no matter what fees they pay, once those things are accounted for, are eligible for rebates.

The maximum rebate is only available to those paying $300 a week in fees. However, if you’re paying less in fees than that, you’re still eligible for a rebate. Let me step you through this, colleagues. Let’s say your household pays $100 a week in early childhood education fees—not an uncommon amount for a family to spend—well, under this FamilyBoost scheme at the moment, you’d be eligible for $25 a week in rebates. Well, today, what we are voting for is to make it so that you are eligible for $40 a week in rebates, which, over the course of a quarter, really adds up into the bank account.

Let me extend that because it’s been very clear to me that members opposite don’t understand the scheme—so I think they should listen—which is that if a household is paying $200 per week for early childhood education, then currently they’re eligible for $50 a week in rebates. But under this bill that Labour are graciously voting for today, that expands to $80 per week. The point that I am making is, quite simply, that the amount of your rebate depends on how much you pay in fees. Now, it seems to be the position of the Labour Party that everyone should get the same rebate, but, obviously, by voting for this today, they’ve seen that this is the better way to do things.

Inland Revenue estimates that around 16,000 additional families, perhaps more, will access the FamilyBoost scheme because of the changes we are legislating today, and so that is meaningful. It means more families getting assistance with the cost of living at a time in family life when households face so many additional expenses. Many members in the House today will have experienced this period of life and some are still experiencing it when you have children, your costs go up suddenly. Often you need to move into a bigger rental or get a bigger house because there’s a baby and there’s a toddler and they can’t all fit into the two-beddie that you once had, so your housing costs go up. You’re paying for nappies, you’re paying for formula, you’re paying for car seats, you’re paying for prams. It’s right at the time when, actually, your working hours are reduced because of your caregiving responsibilities, so your income is under strain. Then you make that decision that both of you are going to return to work, that you’re going to take on those extra hours of work, and by the time you take on those extra hours and you pay your early childhood education fee, you pay for the car parking to go to work, you start to ask yourself, “How do I make this all add up?”

What FamilyBoost says is that we recognise your effort. We recognise your aspiration that you are working, that you’re paying those early childhood fees in order to support that aspiration, and, we, as the Government, are on your side. We recognise those costs. We’re not going to judge you for which early childhood service you choose, how many hours you send your children for, how old your kids are; we’re going to have a simple scheme that says if you’re in that stage of life, we will refund up to 40 percent of your early childhood education fees in recognition of your effort and family circumstances. So this is a very positive way of standing alongside families at what can be a financially difficult and stressful time in life.

It is the case, that in order to benefit from this scheme, families do need to register and they do need to make claims. Now, 67,000 families have already done so, and I commend the Labour Party for hearing those families and moving from their position, which was previously to deny them the support, because those 60,000 families have voted by applying for the scheme and made it clear that the scheme matters to them. As a result of the changes we’re making today, more families should apply because more families will be eligible.

If anyone in this House wants to know what they can do to support families, then they should make sure they talk to them about this scheme, encourage them to apply, and make clear that more families are now eligible than was previously the case. I strongly recommend that households do that.

Families have been telling Inland Revenue that it actually took them around five minutes to make a claim. I once again want to commend those early childhood education services who have made that process simple by, in many cases, changing their invoicing approach to have collective three-monthly invoices so that the family get the print-out, they upload it to IRD, and they’re right as rain. In fact, more than half of the families who have submitted written feedback on the scheme indicated that they found the process top-notch and easy.

Families who have not already registered and claimed for last year’s rebates can still do so. This is important: families have said, “Oh, well, actually, I never got around to it so I missed out.” Actually, you haven’t. You can still make a claim for fees from last year, so take the time and do it.

Look, to recap, this is about making more families eligible for cost of living support. The changes can be met within existing funding. I want to once again thank Labour for their huge turn-around and their support for the FamilyBoost scheme, and I urge the Green Party to stand on the right side of history and follow Labour’s lead. A divided left is an ugly thing to look at.

The question is that the motion be agreed to.

What an ugly speech—what an ugly speech. Here’s why it’s ugly: it is ugly because it is a cover-up. It is a cover-up for the non-delivery of their flagship policies at the election. That’s the only reason we are back in this House today. It was because they proposed an unrealistic policy, they couldn’t deliver on it, and we are back in the House today fixing it up to cover face for Nicola Willis.

We are, of course, supporting a policy that does put more money in people’s back pockets in a cost of living crisis—a cost of living crisis caused by their failure to support the economy. Now, caused by their failure to support the economy, we are back in here covering up Nicola Willis’ failure—a complete failure.

It’s a failure in terms of non-delivery. They promised that 100,000 families would receive up to $250 a fortnight—said it was a fortnight rather than a week. That’s what they promised, but they simply did not deliver it. That was not possible for them. So that’s one of the things that they simply could not deliver. People voted for them on the grounds of getting $250 a fortnight. They did not deliver.

Let’s talk about some of the particularly worrying concerns about non-delivery. Unfortunately for the Minister of Finance, her own officials have pointed to a particular area of non-delivery, and it’s one that we ought to be deeply, deeply concerned about. Sitting in the regulatory impact statement—I’m going to direct people to look at paragraphs 27 and 28—it talks about the population impacts of the Minister’s policy. Generally, it says early childhood education (ECE) participation rates for Māori and Pacific children remain lower than those of other groups. Since FamilyBoost operates as a rebate model, requiring fees to be paid upfront, it is uncertain whether changes to the policy settings—that is the changes that the Minister has proposed—will increase ECE participation among those communities.

This is a policy that puts money in families’ back pockets, but not Māori and Pasifika families. We want to have a long, hard think about the actual delivery of this policy if it is not getting to some of our families who are most in need. Then it says the specific impacts of lower-than-expected reach and average payment amounts suggest that lower-income households, including those overrepresented in this group such as Māori, Pacific, and some disabled people, may benefit less from FamilyBoost. Check the regulatory impact statement. This is because they often use low-cost, donation-based, or poorly subsidised ECE services. As a result, these households are not the ones who are getting some extra money in their back pocket. In a cost of living crisis, those families are not going to get extra money. This policy is there to provide extra money; it is not going to happen for these families who are most in need.

Let’s carry on. It’s reflected in the scheme’s notably low uptake among families using kindergartens, playcentres, and kōhanga reo. In contrast, higher-income families have greater unsubsidised fees, so they are more likely to apply for and get FamilyBoost. This is a non-progressive policy. It’s a policy that benefits the well off more than it does the less well off. Again, that means median families: we know median families are struggling. We know that people need some extra money in their back pockets—of course we will support that, but behind this policy is a record of failure; it is not a progressive policy.

In terms of actually claiming it, we had the Minister saying that—sorry, I want to go to the bureaucracy that surrounds this policy. Now, the way that FamilyBoost works is families pay their fees upfront, they get receipts from their childcare provider, then they go to Inland Revenue’s website and claim the rebate. It’s an extraordinarily labour-intensive policy, and we can tell this. It takes 95 full-time employees at Inland Revenue to administer this policy—95 fulltime-equivalent employees at Inland Revenue to make sure that this policy succeeds. That’s because it’s an incredibly manual policy. Instead of having an automatic policy, such as the one proposed by the Labour Party at the previous election, we have this incredibly labour-intensive policy, which requires 95 fulltime-equivalent employees to deliver it at Inland Revenue.

That’s an extraordinary amount of people who are working on this scheme. In fact, the administrative cost of that in the 2024-25 year was $13 million. That’s how much it’s costing to deliver this policy; a huge administrative cost.

Normally, that side of the House worries about the quality of spending in Government departments. Well, here’s a whole lot of time and effort and money being spent to deliver a policy, because it was a policy which would not work right from the start, and the Minister was told that.

Face saving for Nicola Willis.

Yeah, face saving for Nicola Willis. There’s that kind of failure sitting in there.

Then the Minister had the temerity to say that families who have claimed the rebate have found it easy. Well, yes, the families who have been able to claim it would find it easy, but where is the research for the families who have not been able to claim it? How do we know what barriers are sitting there, which means that people are not accessing the payment? It’s all very well to say that people who’ve managed to do it found it easy. What about the people who have not managed to do it? So that is a failure as well.

Then there’s the ad hoc nature of this change; a whole bill going through under urgency in order to change the primary legislation in order to fix up the Minister’s mistake. I see members over there have their faces in their hands worrying about it.

There’s a link to the current tax bill that is going through the House that has just been introduced to this House this week. I want to direct members’ attention to a clause in the current tax bill, because it’s an important one. I take it that members won’t have the current tax bill right in front of them, but clause 80 in that bill inserts a new section, “MH 6 Orders in Council for FamilyBoost”. What it does is it enables the Minister, by Order in Council, to change the settings for FamilyBoost—to change them on a dime, to change them pretty much at will, to change them because perhaps the policy isn’t delivering.

I mean, what that clause in the new tax bill suggests to me is that the Minister anticipates that, even with her changes, there still will not be sufficient families taking up this policy—people still won’t be claiming it, and so she’s given herself a fail-safe. She’s not going to need to come back to the House to tweak the settings yet again; she can just do it from the comfort of her office and hide her policy failures by sneaking it through quietly with an Order in Council.

This bill is, I think, a testament to the failure of vision on that side of the House. It’s a testament to the failure of Nicola Willis’ policy around FamilyBoost. Despite all she was told about how it would not deliver, despite all she was told about how the data was unsure, despite a clear policy alternative about an absolutely sure way to ensure that families got support for their early childhood costs, she decided to go down this path—a path which simply could not be achieved.

I think it’s time for the Minister, instead of just touting the numbers, instead of saying it’s an increase to FamilyBoost—of course it’s an increase to FamilyBoost. But the reason for it is because the Minister’s policy, right from the start, did not deliver. It’s a bit like those wretched boats: simply not delivered. This is Nicola Willis’ record of failure, and it is beyond amazing that she would turn up to the House and say that this is a success.

Early childhood education (ECE) is crucial support for tamariki. It’s one of the best investments we can make as a society in reducing inequality and improving productivity and ensuring that all tamariki are able to live up to their potential. The future flourishing of Aotearoa, and if you want to think of that in economic terms, is very much about the investment in our people. The research shows that the first few years of a child’s life is the most important for their ongoing long-term outcomes.

There’s no question that the Green Party wants to support early childhood education. When I was Minister for Women, I had the privilege and opportunity to speak to officials and Ministers from other countries and those from the Scandinavian countries like Iceland, Sweden, Denmark. What I found in Norway was that there was a clear agreement that if you want to get better outcomes for women, the policies you have to invest in are paid parental leave and quality early childhood education. The benefits are much greater than just for the children; it’s the ongoing productivity because it means parents can go out and work or volunteer or go to education, whatever it is they’re going to do, and not be under that financial pressure.

Now, currently in Aotearoa New Zealand, we had a policy of 20 hours free early childhood education. I personally have benefited from that. I have one child in early childhood education now and one who’s in primary school who did go to early childhood education. I’m so grateful for the support that they had from the kaiako, the teachers—the loving, supportive, nurturing environment, which meant that I could still be a representative in Parliament and have young children and my partner can continue with his paid work because he’s very passionate about that as well.

However, despite the 20 hours free ECE for three-year-olds and four-year-olds, we still have some of the highest early childhood education costs in the entire world. For families with children in early childhood education, it’s the biggest cost after housing. The Government’s spending a lot of money on ECE, but a lot of it isn’t getting to the families because we have a number of for-profit centres that are returning a healthy return. Now, we have a Government that’s looking to lower the standards, make it possible to have more non-qualified teachers so that it’s easier for owners of those centres to reduce their costs, cut their costs at the expense of the care of the child.

It is such short-sighted policy and today we have the Minister of Finance, Nicola Willis, come in here and proudly claim that this FamilyBoost policy and the legislation going through the House right now is somehow a big win for families and that those who are not supporting the bill, like the Greens, are somehow opposed to investment in early childhood education. What a joke. It’s ridiculous. The Green Party showed in our Green Budget in May that we could provide free universal early childhood education to all New Zealanders, and that would make sense, it would be with qualified teachers, and that would be a genuine investment in the long-term future and productivity of our country.

Why would we support this failed policy of FamilyBoost, which, over the first year, only 249 families claimed the full tax credit when the Government was expecting thousands. Well, I could have told Nicola Willis—I’m pretty sure I did tell Nicola Willis in 2023 on the campaign trail—that this policy was not going to be accessible; it was not going to reach the families that needed it most. It shows how out of touch she and the Government of the day are that they think low-income, working parents have the ability to easily pay upfront early childhood fees and then claim them back four times a year. It’s actually ridiculous.

It’s not easy for the centres. I’ve been out there talking to kindergartens, for example, and they’re very worried about the moves that the Government is making, mainly under the direction of David Seymour, to deregulate the sector, to undermine the quality and training of kindergarten teachers and early childhood educators—just to make it like kiddie farms, basically. I mean, that’s really one of their main donors—the kiddie corp legacy. The people who make their money out of early childhood centres, not because they care—I mean, maybe some of them care about the care of their children, but it’s pretty clear that they’re less interested in healthy, safe, quality teaching and more interested in cutting costs and being able to make lots of money.

That’s just not what early childhood education should be about. It’s a public good. It benefits all of us. The last Labour Government did have a policy that would have been really administratively simple, that would have benefited a lot of families, that would have reduced the cost of living a heck of a lot more than FamilyBoost, and that was extending the free 20 hours to two-year-olds—two-, three-, and four-year-olds. That was about to come in in March 2024. Did it come in? That would have saved families thousands and thousands of dollars if they had two-year-olds in early childhood education. It would have been administratively simple. It would have reached far more families. Let’s not pretend that FamilyBoost is some great policy that is going to benefit lots of families struggling with the cost of living, when they could have had 20 hours free at early childhood education centres for two-year-olds in 2024.

The FamilyBoost scheme entirely fails to address the fundamental issue of the profit-driven ECE sector passing on huge cost to parents and the Government with little transparency about how the funding is used. It’s complex for families, administratively expensive; it doesn’t address gouging by private ECE owners. It doesn’t address the fact that early childhood educators are often not earning enough money to live where we need the centres. So there’s a massive shortage of early childhood education places in Te Whanga-nui-a-Tara—in Wellington. That’s because early childhood teachers, if they didn’t buy a house in Wellington 20 years ago, were really struggling to be able to do their job and live near their work.

So there are issues around housing and transport affordability, which of course the Green Party is aware of as well, but there’s a simple, positive alternative: free early childhood education provided by community organisations rather than for-profit businesses with quality kaiako—quality teachers. The Government could afford to do this—absolutely—if the coalition Government genuinely believed in economic development and things that would boost productivity and address inequality and provide equality of opportunity to every tamariki in this country, they would be looking at a policy like what the Greens have proposed, which is free, universal, quality early childhood education.

I hear that the members opposite are sceptical. They just think we can’t afford it. Well, Iceland can. Iceland’s a country with—what? —350,000 people. They’re not making money out of minerals or oil; they actually have renewable electricity. They have demonstrated that when you invest in people, it is sustainable, and you get a thriving society. So there’s no reason why New Zealand could not have a more visionary policy and something that’s actually going to be effective.

I mean, one thing I can definitely tell you is that investing in early childhood education would get a better return to the economy than spending $2 billion to $3 billion on 1 kilometre of one lane of motorway in Wellington—the centre of Wellington. Like, that’s how outrageous and how utterly backwards this Government is that they think that throwing some money at tarmac is somehow going to benefit the economy. It shows the poverty of thought—absolute poverty of thought—that they don’t understand.

You’re pro-tunnel in Seatoun—you’re pro-tunnel.

As—Mr Brewer—I failed to mention the other day, I don’t think the National Party actually has the support of the people of Rongotai, because the Green Party got 50 percent more party votes than the National Party did. The Green Party alone got more party votes than every Government party combined in Rongotai, so they absolutely have—oh, and then the Labour Party was very close. OK, the Labour Party was a very close second. The Green Party and the Labour Party together got 66 percent of the vote in Rongotai.

So the Government doesn’t have a mandate. They’re out of touch. They don’t understand what’s genuinely going to benefit the economy or the long-term health of our society. That’s why they plug away with these failed policies that are administratively burdensome, and that don’t reach the families that need it most. It’s all about branding. They think if they go out there and brand themselves as good managers of the economy, “Oh and we care about early childhood”, but only for certain families, not for all families. They don’t recognise it’s not just the families with children in early childhood that benefit from policies like investment in early childhood; it’s the entire country—it’s the entire country, and New Zealanders deserve better.

We’ve just had two contributions this morning in the first and second reading for this bill—one from the member Tuiono and one from Julie Anne Genter—from the Green Party. They have both been a mishmash of confusing anecdotes and getting off track, it has to be said. I heard a couple of quotes in there that might be considered relevant. We heard “not accessible to families” and “certainly not all families will benefit”. Well, I can only assume, based on that, that the Green Party is not supporting because, to surmise, that’s because their average voter base earn above the cap, but, other than that, I couldn’t see why the House wouldn’t support this unanimously. The ACT Party does. Thank you.

I find, with some irony, that members across the aisle are casting aspersions on the management of the economy when one particular party was fully in charge of the economy and it was like looking at a train wreck in slow motion. The Marxist manifesto that’s come from the Green members about how we run our economy says that we’ll all be equal and, I suspect, we’ll all be equally poor. This is not just an investment in our kids. It’s an investment in our human capital, our productivity, and our prosperity into the future, which I think all members across the aisle can agree with, and we look forward to their support of the passing of this bill.

Thank you, Mr Speaker. I’m just going to take a call on the second reading of the Income Tax (FamilyBoost) Amendment Bill. I actually quite like following Dr David Wilson’s contribution. Again, congratulations to the new member who’s joined us in the House. I do find some of his contributions actually very considerate and measured. I didn’t agree with some of his comments around the economy, but, actually, what I did agree with is the acknowledgment of having to come together to help families with the cost of living. That’s exactly why Labour is supporting this bill. We know, and we have affirmed through the first reading, that this bill is actually fixing a failure of a Government policy.

What I found quite disappointing in the first reading of the bill was an interjection that came from the Minister of Finance where she laughed. She laughed about the Labour Party supporting them to fix their bill to support families with the cost of living. I found it quite revealing of the Minister of Finance’s view. This is a bill that’s had to be introduced to fix a problem in her own policy because of the failure for families to actually take up this policy. She’s had to increase and change thresholds and rates so that, hopefully, more families can actually access the FamilyBoost payment. I found it quite revealing that she wanted to laugh about that, given that this is a bill to fix her failure. Perhaps she was actually laughing at herself and not at the Opposition, who was trying to support this bill.

One of the reasons why I believe that this policy has been a failure—and it’s been traversed by members in the House previously—is that, when this Government came in and they decided to repeal the ECE, or the early childhood education, 20 hours free policy that was extended to two-year-olds, that was actually one of the very first policies that this Government decided to repeal. That was a terrible, terrible move because, actually, that ECE 20 hours free meant that families didn’t actually have to do anything. They could just take their two-year-old to their early childhood provider and get, basically, the 20 hours free. There was no paperwork that they had to do other than the normal enrolment of their child into an ECE.

This Government decided to add a bureaucracy and add more red tape, which I thought was quite ironic given their war against red tape. They decided to make it harder for parents to access entitlements for them to be able to subsidise their early childhood education for their children. As Dr Deborah Russell has set out earlier today, what that bureaucracy has practically meant is that there are 95 more full-time employees at the Inland Revenue Department administering this policy at a cost of $13.9 million. Just to help the House understand that, that’s 20 percent of the money that the Government has set aside for this policy spent on administering this policy. I know the Inland Revenue Department; they are very good people who work very hard and would try and make it as efficient as possible—95 fulltime-equivalents (FTEs) needed just to administer this new policy.

It is ironic that, for a Government that wants to make it easier for people to send their children to early childhood education, one of their first acts was to repeal a policy that actually did make it easy, that was hands off and no work, and then they put in a policy where now parents have to make sure they’ve got their invoices and receipts and file a return. That’s come at a cost of $13.9 million for a new bureaucracy that’s had to be set up to actually administer this.

Another interesting statistic for the other side of the House is that IRD have had to field over 28,000 phone calls for this policy. They’ve also had to deal with over 20,000 web messages. This is the red tape and bureaucracy that has been set up by a Government who ironically wants to fight red tape and bureaucracy. Instead of a very simple policy that was in place and that was hands off for parents, they put in a new policy that required parents to do more compliance and also built a new bureaucracy surrounding it.

The other interesting element that has come out through written parliamentary questions around the failure of this policy is that over 41,000 families have actually been declined FamilyBoost. The main reason why they’ve been declined is because their quarterly income is over the income threshold. It’d be interesting to see how those numbers change with the changes of the threshold within this particular bill. The element for me that is most surprising about that is that there’s still only 244 people who’ve actually got the full entitlement. Again, the Government promised it was going to be 21,000 families who would receive the full entitlement, but, actually, only 244 people received the full entitlement. That is an absolute failure. I go back to that initial remark I made around the Minister laughing about it. She should be laughing at herself. This is a failure of a policy, which is, again, why Labour is supporting this. At the moment, families need money to be able to support them.

The other interesting element that has come out through the regulatory impact statement, in relation to administration costs and the ability to make this policy as easy as possible, is that rather than the Government actually putting through urgency some more measures to make the administration easier for families; they actually went and consulted—and I give credit to the Inland Revenue officials who did this—with kindergartens, ECEs, and some experts around what sort of changes they could make to make FamilyBoost easier. The interesting point, which is at paragraph 33 of the regulatory impact statement, is—and I quote—“Most suggestions had a focus on encouraging uptake through making the process easier or more accommodating for families, however, these suggestions could not be achieved within the short-term.” There, in the regulatory impact statement, you’ve got very good officials who are consulting with the sector and saying, “We want to make FamilyBoost easier for families.”, and then you’ve people that they’ve consulted with coming to say, “Well, actually, here’s our suggestions to make it easier.” Unfortunately, because of this rushed process of urgency and the inability for officials to be able to provide a proposed bill for the Minister, they’re not actually able to make the policy easier for families. Yet there’s some very good consultation that was done with some suggestions to make it easier for families.

We support this bill because we know families need every dollar at the moment. What we don’t support is a Minister of Finance laughing at the efforts of the Opposition members in trying to support families to get that money. Again, this bill is an admission of the failure of the Government policy and the Minister of Finance. Her policy has been a flop. That is the flop that’s happened here. It has been a flop from the beginning. As much as people in the sector and as much as people in the Opposition have been saying “Just keep the ECE extent for two-year-olds and up”, because that’s the policy that’s actually in for three-year-olds and four-year-olds. No, for one year, families have additional administration costs. We have a new bureaucracy, which has 95 FTEs. We have 20 percent of the cost of this policy being spent on administration by the Inland Revenue Department. Again, it doesn’t matter what’s in this bill to try and lift rates and thresholds to try and get more families into it; there is still the major issue that this should have been easier for families.

I look forward to seeing whether the Government actually improves the administration of this policy. Hopefully they bring it in a bill next year so that more families can actually access this. At the moment, this is just a band-aid trying to fix a failure for a failed uptake of a policy that’s meant to help families in a time of need. When the Government promised 130,000 families that they were going to get $250, there are still zeros. There’s still crickets from the other side of the House because they can’t find one family at all.

The Greens will not be supporting what I would call a fig leaf on this coalition’s regressive tax policy and it’s continuing to put taxpayers’ money into the profiteering from the most vulnerable youngest members of our society.

We continue to hear a bit of a myth that this country is the best country in the world to bring up children. But if you look at early childhood provision, if you look at family violence management, if you look at a whole lot of health statistics, this is not what it should be—the best country to bring up our tamariki. You cannot say that other parties care more about our tamariki than the Green Party. We would in this House—and I acknowledge the words from Dr Wilson—probably all agree unanimously that early childhood is the most important investment that we could make. But it’s not babysitting. It’s not an investment just so that workers can go to work and make tax for the Government to spend. It’s an investment in human capital, it’s an investment in the public good.

I was very disappointed when I visited Ko Te Aroha community childcare centre in Masterton earlier this month. They’d actually sought the presence of the National Party MP there, who, for one reason or another, had not yet been able to visit. But what they told me is that this coalition Government does not really care about early childhood care for the following reasons.

First of all, there is no Ministry of Education funding for the buildings. But if it’s a school—so when the children get to five—they get a bit of funding for the buildings. If they’re under five, there is no funding for the buildings. Secondly, they are only funded for when children turn up. So if they have 30 allowable placements but only 27 children come because three are sick—or the parents are sick or there is some other difficulty—then they are only funded for 27. Thirdly, if one of those qualified teachers is sick—and my goodness, the bugs that go around in early childhood; we can all understand how that might happen—it is very, very difficult to get relief teachers, and I don’t see any help from this Government in solving that.

Also, it was a pretty good education going to Ko Te Aroha. They do have some children with high needs. There’s an extraordinarily high number of children who have experienced trauma and maybe those are ones that the private early childhood centres choose not to take on their books, but you get 1½ hours of special-needs support for a child at that childcare centre. It’s low pay already, and if you’re going to try and add up 1½ hours at this centre and 1½ hours at that centre and 1½ hours at another centre, it’s very, very difficult to make a career choice to be a teacher-aide for early childhood education.

So the Green Party’s clear Green Budget supports a much simpler, much more effective way of working with the tax system. This bill is fiddling with the fig leaf on the tax system, not taking a simple approach: first $10,000 tax-free. I would like to see the money that this Government spends on public good not going to fund oil exploration subsidies, not funding tax on tobacco, and if you want to ask me about other issues in the tax system, I would need a lot longer than 35 seconds.

Labour’s spokespeople who talked earlier on pointed out that 20 percent of the fees will go to admin. What percentage will go to corporate profit from centres that are soon going to have far more unqualified teachers looking after our most precious tamariki?

Before I call Cameron Brewer, I just to clarify that the House has got itself a little bit out of order in terms of speaking. So we’re going to have Cameron Brewer, and then we’re going to come back into order and have Ryan Hamilton straight after Cameron Brewer.

Thank you, Madam Speaker. Just looking at the regulatory impact statement as to how successful this policy already has been: $50 million has been paid out to 60,000 families. This is about improving FamilyBoost, making it more rewarding and more accessible to more Kiwi families. I commend it.

Oh, $6,240 a year eligible refund—so good. I commend this bill to the House.

This is a split call.

Thank you, Madam Speaker. How embarrassing—how embarrassing—for the Government to get their policy settings so wrong and to get their systems so wrong that they have to return to the House. They have to return the House to reset the policy. Now, they are embarrassed, but this is also a Government who is not backing itself. We can see how they’re not backing themselves in something that my colleague Dr Deborah Russell pointed out before, which is that the Government has also introduced an amendment in the annual taxation bill that will allow future changes to FamilyBoost to be made by Order in Council. If you’re very embarrassed now, the last thing this Government will want to do is to have to return back to Parliament to change the settings again if they’re wrong. But they are not backing themselves; they are using an Order in Council to go around the side door if, yet again, they find that their policy settings are simply wrong.

While we do support the changes that are being made in this bill, in truth, we don’t know whether they will be successful because there are unanswered questions about whether parents, for example, have been consulted on what the easiest way to access these supports is. There are issues, also, about the Government failing to see this sector as a whole. My colleague Teanau Tuiono spoke earlier about moving the deckchairs. Having a policy that families can use to support them to make it easier, in terms of the cost of living, to access these services and not looking at the pay of early childhood education (ECE) teachers and not looking at the mechanisms through which they would access those supports is an absolute failure. This Government really needs to think about what those access mechanisms, are as well as supporting our ECE teachers.

The NZEI put out a press statement that talked about the massive impact that Labour Budgets have had in the past, including our policy—our simple policy—of introducing 20 hours of ECE for two-year-olds, the simple policy that would have worked. They talked about the investment into the ECE sector, and they queried whether the FamilyBoost changes would, in fact, help people because of the placement of those administrative burdens on some of the families who least have the time available to navigate the process.

Interestingly, the Government’s own document, the departmental disclosure statement, also echoes this issue. It says that this policy won’t be effective if the uptake is low. The uptake is really the cornerstone in terms of understanding whether these supports will be taken up at all. Now, what we’ve seen in the past is that a number of families simply haven’t been able to access the support. The big questions is: what consultation and what work has the Government done identifying what system improvements can be made? Again, the departmental disclosure statement gives us some insight into this, but there is an important point. It says that there was consultation, however—and I quote—“there was a constrained consultation period with a limited group of public government and private sector stakeholders when developing the proposal to be given effect by this Bill.” There is no mention of parents, the people who will need to use the system. My question would be: what consultation was done with the users of this system? It appears that there has been none. It’s OK, because, again, the Government have put in place a back door where, if and when they get this wrong again, rather than coming back to the House and being up front and open with the people of New Zealand, they can—through the back door—through Order in Council make a significant change to Government policy. I’d put it to the Government that that is not the purpose of an Order in Council. You must not avoid being embarrassed. You must face up to your mistakes.

This is a great policy, I commend it to the House.

Thank you, Madam Speaker. Oh, I haven’t got my sparring buddy here for this contribution.

I’ll start from the beginning—from the very beginning. When this Government came into Government, there was a policy in place—and that was the Labour Party’s policy—to provide funding to extend the 20 hours early childhood education (ECE) subsidy to two-year-olds, because it was currently only available to three-year-olds. What this Government did was they cancelled that policy because they believed they had a better one—they had a better idea and a better plan.

But what we know is that they have not been able to deliver on what it is that they promised to families, and that’s why we are here today, debating this bill, which Labour is supporting because we can see that the Government is admitting their failure, coming here to fix up their mistakes, and to finally get the support that was promised to families.

There has been a bit of discussion in the last few contributions—one of the members on the other side of the House was boasting about the almost $70 million that has been paid out so far, but what that member failed to acknowledge is that, actually, they were expecting to pay out up to $174 million. The difference between $69 million and $174 million is quite a big number. It points to the fact that they have failed to deliver on their promise and to deliver this policy.

I did mention in my previous contribution that I have heard from parents—and I do note that the Government has not consulted parents on this proposed change, but I was talking to parents yesterday who were saying that this Government’s scheme is difficult for parents. It gives them more life admin on top of their busy lives and looking after young children. This Government says, “We have some relief for you, but you have to do all of these things to be able to access that relief.”

Now, compare that to what Labour had in place, which was to extend 20 hours free ECE that was automatic based on your enrolment. This Government says, “We have some relief for you, but you have to collect the receipts, you have to get the invoices, you then have to submit it, you have to do it every so often”—and that is causing a lot of people not to access the support that they have.

In the regulatory impact statement, at paragraph 33, the IRD did do some consultation on this proposed change, and one of the things they got from that feedback was suggestions about how to make it more accessible—how they could encourage the uptake by making the process easier and more accommodating for families.

We were just having this debate across the House in the earlier speeches—the Minister of Finance absolutely ignoring or refusing to listen to the points that I was trying to make on behalf of parents. Her own regulatory impact statement points out that this is feedback that the IRD have been receiving. One of the things that needs to be noted is that, in a rush to address their failed policy, it says here that “however, … [the] suggestions could not be achieved within the [short time frame]”. Once again, this Government refuses to listen to feedback on their policies and make the changes accordingly.

We have some figures that we have been talking about in the House this morning about FamilyBoost and about what was promised but what has actually resulted. We know that only 244 families have received the full amount, and we don’t know—nobody has been able to provide us with one single family who has received the $250 that was promised. Nicola Willis promised 100,000 families would get FamilyBoost, but only 27,000 have consistently received it. Only 27,000 households have consistently received a payment for the year—a payment every quarter—and 67,590 unique households have received at least one payment. We support this bill because we want all of those families who are entitled to receive this support in a cost of living crisis. This bill fixes up the policy’s abject failure.

The other thing I think is really important to note for this House is that this is administratively expensive: $13.9 million has been spent on the administration of this policy. That is an additional 95 fulltime-equivalents. The scheme is complicated, and IRD has answered over 28,000 phone calls about FamilyBoost and also responded to over 20,000 web messages relating to FamilyBoost. It also concerns me, when we look at the data that we have, that, up until 3 September, 41,482 claims have actually been declined. What we know is that around 69 percent of those were declined due to their income being over the quarterly threshold, but the remainder were declined for a range of reasons, including relating to the invoice or due to a return not being filed.

This information that we have received, through written questions and other sources, shows the Government that there is a whole lot more that they could be doing if they genuinely wanted people to be able to receive the support that this policy is promising them. But they don’t want to do that, and I just can’t understand why they don’t want to make this a simpler process for families to receive much-needed financial relief in a cost of living crisis. Why do they continue to ignore that information?

The final thing that I want to talk about in my contribution is the lack of time that has been taken to engage directly with parents. This Minister seems to assume that she has all the answers for that without taking any time to engage with them. At paragraph 34 in the regulatory impact statement, it says: “The short consultation time frame means officials were unable to engage directly with families.”

I know, because I met yesterday with those advocating and supporting families in this early childhood education space, who said they desperately want to be working with the Government and be heard by the Government in terms of the concerns that they have. But because of rushed time frames, because of a dismissal of those concerns that they’re raising, the Government is not prioritising ensuring that they are consulting with that parent voice—and I would suggest that this Minister and this Government do more of that.

Labour is supporting this bill because we recognise that these families who have been promised this support from the Government—who have not been able to deliver on their promise—deserve to receive this. We are supporting it because it is an acknowledgment that this Government’s policy has failed, that it needs to be corrected.

We see—sorry, one other point that I’ll make—that they actually are anticipating that they’ll need to come back again, so they’ve changed the law—they’re making a change in there—so that they can just do this through orders and won’t have to come back and be embarrassed once again. We commend this bill to the House.

I support more tax credits for the 22,000 additional families who can be supported by the FamilyBoost. Therefore, I support the bill to the House.

Thank you, Mr Speaker. Here we are, cleaning up Nicola Willis’ mess because she couldn’t get it right: she couldn’t design an effective, simple, and straightforward system. She went out on the hoardings and she said there’s going to be thousands of families that are going to get $250 a week—

130,000 families.

—130,000 families—thank you, Barbara Edmonds—and how many are there? Nada, zilch, none, zero—zero.

The spiteful speech of the Minister of Finance—we’re coming here saying, “If you want to fix it up, we’ll give you a hand.”, and here she comes and attacks the Labour Party because she’s got nothing good to say about the National Party.

But we’re here—and you know what? This is a flawed policy, but it’s not as bad as giving nothing. I honestly don’t understand why you didn’t just give free early childhood education (ECE) to two-year-olds. Look, there are people out there, there are families out there putting baby formula on Afterpay, and you’re asking them to pay for their childcare first, then go and get the invoices, then go online, fill out the form, upload the invoices. We know it’s well-documented that the reason there’s been such poor uptake is if you put enough administrative hurdles in front of people, you will get attrition. Where will that attrition be? It’ll be amongst those people who are less literate or less able or more busy, more distracted, not amongst your wealthy, leafy, middle-class families who’ve got a bit of time for admin for an evening; no, it’ll be those people who’ve got three kids and three different jobs and who are struggling to make ends meet.

So this doesn’t help those that need it most—the most. It actually provides a very generous subsidy right up into quite high income brackets. It abates, I think, at a family household income of over $200,000. Whereas, we think the help should be going to those that need it most. This will help some truly needy families, and that’s why we’re supporting it.

But let us be clear: this is a patch on a policy that failed. We need to address the real issues in our country, and whilst this will give some relief against the horrific cost of living crisis that that Government is overseeing, it doesn’t go far enough. We need genuine measures to address things like the cost of food. If people are putting baby formula on Afterpay, going to the gas station and having to borrow money to put petrol in their car to go to work—these are the problems that families are facing, and that Government is not interested in addressing them. They’re fiddling at the edges. There are no measures. In fact, it’s the opposite. They are putting costs up; things like the Natural Hazards Commission, car registration, the soon to be petrol tax. They are actually creating inflation in Government charges. Here we have a derisory patch on a policy that, in fact, favours the well-off, rather than those that really need it the most.

We are supporting the bill. In the tone of the speech, you might wonder why we are supporting it—because one of the things it does is help families who are really struggling with their childcare and ECE costs, and that is a good thing. It’s the least bad piece of legislation that the Government has presented so far, so we will support it, but for Nicola Willis to come in here and pretend that in some way this isn’t just a fix of an absolute policy flop is ridiculous. She should come in here humiliated and be humble, to apologise for the mess she made and that she’s having to ask us to help her out. Here we are, happy to help out—

Humble like Duncan Webb!

There’s Carl Bates—keep up the good work!

Look, this is a policy which hasn’t worked. It’s a bit of a fix; it doesn’t go far enough. The sooner that Government is removed and we can make some real change that helps those that need it the most, the better.

This bill is set down for committee stage immediately.

Members, the House is in committee on the Income Tax (FamilyBoost) Amendment Bill. We now come to clause 1, and this is the debate on the title. The question is that clause 1 stand part, and I just wanted to make a point before we start this. We have received a number of amendments around the title and I’ve had a good look through them, and it’s likely that I will rule some of them as an attempt to criticise the bill. I just wanted to make members aware, before we started clause 1, to just be very logical with the title clause amendments, because some of them are quite a stretch. Having said that, the question is that clause 1 stand part.

Point of order, Madam Chairperson. Just to clarify: we’re going through this clause by clause, are we?

I have not been told any different.

OK. That’s good. Yes, well, I’m very happy to talk about the title, because I do think that the title doesn’t really capture what this bill does. Madam Speaker, I may take a call.

Really, this is a bill which addresses the problem that there are no people, and it’s unlikely there ever will be any people, getting $250 a week, which is the maximum that people are entitled to. Presumably, I think the Minister said in her speech—well, she alluded to the fact that, in fact, to get that amount of money, you’d have to be paying an enormous amount of childcare because of the fact it’s a subsidy and it doesn’t pay for all the childcare, and childcare doesn’t usually consume that amount of household income.

Really, we should be calling this bill something along the lines of the “Income Tax (Imaginary $250 Per Week Subsidy) Bill”, because that’s what it is: it’s imaginary. In fact, it was misleading to go to the electorate and say that there were going to be those subsidies to a large number of people. The Government hasn’t fronted up and said, “Look, here are the actual figures.”, because they will now know. They will actually now know, with a pretty high degree of accuracy, what the curve of the subsidy will be, who will be getting the most and how much that will be and where it will tail off, and what the entire curve and distribution of those will be. The Government should be upfront about that.

Look, in fact, if we’re going to change the title of the bill, and, in fact, we should—and, in fact, there may be some tabled amendments, either here or arriving shortly, that do that. The “Income Tax (Imaginary $250 Per Week Subsidy) Bill” is a good start, but if you don’t like that one, I’ll address some more in due course.

I, too, want to speak to the appropriateness of this name. In particular, I want to talk about it because, although on the face of it what this bill does is just increase the amount of FamilyBoost available to families—and this is a good thing which we’ve said we support because of the cost of living—in actual fact, it disguises what really has gone on with this bill. That is that right from the start, this policy was flawed; was flawed not because it was attempting to give money to families, but it was flawed because the money could not be delivered. The delivery mechanisms weren’t there. The data wasn’t there to support the Government’s analysis that it would go to 100,000 families. The data certainly wasn’t there to show that people would get $250 a fortnight, as the Prime Minister promised during the election campaign.

We pointed this out as the initial FamilyBoost legislation went through the House, I think, back in Budget legislation. We said there would be problems with delivery. We pointed out that there were issues with the policy. We said a simpler way to do this would just be to give a straightforward subsidy via the early childhood education 20 hours free that already exists. We warned the Minister that her policy would not work. Well, you know, it hasn’t worked.

So we’re coming back now to this House in order to save Nicola Willis’ face. She promised money; she couldn’t deliver it. That’s the real reason we are in this House today. So disguise it, as one might, by claiming it’s all about just putting more money in families’ pockets; good thing to do in a cost of living crisis. What it’s really about is fixing up the giant stuff-up that was made.

I think that this bill should be called the “Income Tax (FamilyBoost) (Saving Face) Amendment Bill”. I think that ought to be the way that this is referred to because all it does is try to save Nicola Willis’ face.

Thank you very much, Madam Chair. For those watching this debate at home, you can tell by the quality of the contributions from members of the party on my left that they are not taking what is a significant benefit for New Zealand families seriously at all. The fact that we are increasing the income threshold for people to be eligible for FamilyBoost from $180,000 to $230,000 is a significant increase in scope, and the fact that we’re increasing the credit from 25c to 40c is significant. I think, in all fairness, let’s take this issue seriously. This is a significant win for New Zealand families, and we should treat it as such.

Can I just make it clear that I will judge the quality of the contributions, thank you.

Thank you very much, Madam Chair. It is with the utmost seriousness that I begin my contribution, because, of course, Labour is supporting this bill. We recognise the Government has owned up to its mistake, today, and has finally—after months of pressure in this House from my colleague Barbara Edmonds and from my colleague Dr Deborah Russell—seen the light.

We want to be recognising the fact that they have changed their policy, their unworkable policy that they took to the election, and—to just make sure that this is appropriately recorded in legislation—to give the bill a title that reflects what it actually does. Because we’ve been so vigorous in the House in our prosecuting of the fact that this policy has been unworkable, we would just like the gratification of having that reflected in the title. So we would like this to be the “Nicola Willis Caves to Labour’s Pressure Bill”, because that is a description of what’s actually happened. The Government has defended this policy in this House for months. We have made the case that no one received the $250 that they were promised at the election and, therefore, we now want to have this turn-around appropriately noted.

The other potential name for this bill—because we know, as the Minister reflected in her contributions, that people are finding it tough out there. There is a cost of living crisis, and the Government has spent an awful long time supporting an Act that wasn’t delivering to expectations for New Zealanders. I would humbly like to suggest this is called the “Out of Touch with Working Parents Bill”, because working parents face everyday realities of making their budget add up. Childcare is a significant cost, and yet, for two years, the Government has been arguing that this unworkable policy that they are now having to correct was all right. Yet today, under urgency, we’re passing a change to all of that. So it would just be appropriate to note that the Government has recognised that it hadn’t met the needs of working parents because it was out of touch.

Then, finally, I think working parents would, quite rightly, ask the Government whether this could be called the “Show Me the Money Bill”, because they haven’t been getting the money. There are multiple instances of Christopher Luxon saying at the last election that working families will get $250, and yet the Government can’t find a single family that has received the $250—yet the Government can’t find a single family that has received the $250. We saw a valiant attempt at defending that from the Minister of Finance in the earlier stages of this debate, when she said—I think she was, essentially, saying that, theoretically, if someone did have high costs, they could get a $250 rebate from this policy, but the fact that no one exists who’s got that rebate shouldn’t be held against that Act. That is absolutely ridiculous, and Kiwis could, quite rightly, ask the Government to show them the money.

Then, when I reflect on this—that this was a policy the National Party designed in Opposition and that has proved to be utterly unworkable in Government—I’m also reminded of their cancer medicines promise, which they had to defer because they couldn’t get that. So we could also call this bill the “Problems in the National Party Policy Shop Bill”, because they’re unable to really seriously put forward proposals that would help working people.

Finally—because I do find Mr Campbell’s contributions give me many reasons to continue to speak—we could also think about the fact that this is, as my colleague has said, face saving and yet has been an overly bureaucratised bill with 25 percent of the costs going on to administration of the bill rather than giving relief to working families. So we could call it the “Making Red Tape Bill”, because I know that is a particular preoccupation on the part of Government members.

So there we go: five excellent contributions to renaming this bill!

Thank you, Madam Chair. I want to support a number of those amendments to the bill title that the Hon Ayesha Verrall has just run through, because it is quite farcical that this particular bill is here fixing the mistakes of a policy that was bound to fail because of the administration costs—the compliance costs. Then, when I look at, actually, the regulatory impact statement about what’s the policy problem: “The policy problem is that FamilyBoost is reaching fewer families and providing less financial assistance than originally intended.” So it’s quite clear that this is an admission of a failure of a bill.

Hence why my suggestion to the Minister, in relation to this bill, is maybe calling it the “Income Tax (Save FamilyBoost from Further Failure) Amendment Bill”. It’s quite clear that, through the contributions in the House this morning, which clearly set out all the different failures—from when the admin cost is around 20 percent of the spend; when it was promised that 21,000 families would get the two full $250 that was promised at the election actually being less than 300 families; or the 130,000 families that were entitled to FamilyBoost that was then revised down to 100,000, which is now less than 70,000, or actually 58 percent, as set out on the regulatory impact statement—I think the “Income Tax (Save FamilyBoost from Further Failure) Amendment Bill” is actually a perfect title for this particular bill.

Then, also, to Dr Verrall’s other contribution around the “Income Tax (Out of Touch for Working Parents) Amendment Bill”, I think that is a fitting title for this particular bill, because as we set out earlier in this debate, the number of steps that parents have to go through to actually get their entitlements for this bill—her suggestion as to rewording this as “Out of Touch for Working Parents” is actually a very fitting name for this bill, because, again, as I questioned in my second reading speech, my question or my thing to the Minister really was: “Is there going to be more bills to fix this policy?”, given that this bill does not even touch on improving administration; it just increases the families who are entitled to it. Again, as I’ve prefaced before in the House, the question that I had around the administration is that it needs 95 fulltime-equivalents. We can probably go through those questions as we work through the rest of the clauses.

I do believe that this should be called the “Income Tax (Save FamilyBoost from Further Failure) Bill”, because it has been a failure of a policy. We’ve had an admission from the Government that they’ve had to bring this bill to the House, rush it under urgency to try and get more families entitled to it, which is why Labour is supporting the bill. But it is a failure from this Government, full stop. When both the Green Party and the Labour Party, in earlier speeches, said, “You should have just extended early childhood education to two-year-olds”—a policy that was minimal administration for families; it was already a policy that they have to undertake when their child turns three and four years old—instead, the Government decided to repeal it and bring in the FamilyBoost policy, which is clearly not boosting anybody sufficiently, which is why they’ve had to come back, fix the legislation, and, also, why they’ve actually got another bill—another tax bill, actually, another tax bill—that has some changes through Orders in Council, which Dr Deborah Russell had talked about. My suggestion to the House is that we should call this the “Income Tax (Save FamilyBoost from Failing Even Further) Bill”.

Tēnā koe, Madam Chair. We’re here in urgency and, obviously, we’re not going through a whole process, and I believe that when this bill was originally brought in, it was also—the primary legislation this is amending was brought in under urgency, during Budget urgency, and so we’ve never had a select committee on this policy or this legislation. Reading from the regulatory impact statement the summary of the options to expand FamilyBoost, this is from the officials at Inland Revenue: “What is the policy problem? The policy problem is that FamilyBoost is reaching fewer families and providing less financial assistance than originally intended.” Well, intentions are all good, but here we are: we have the evidence that FamilyBoost has not been working.

During a cost of living crisis, it has not been providing the financial support to families who need it and that it was intended to, and so what would have been much better was if the coalition Government and Nicola Willis hadn’t cancelled the planned extension to free 20 hours’ early childhood education (ECE) to two-year-olds. That would have easily reached a whole lot of families in the past year and a half. It would have meant thousands of dollars more in the pockets of families of two-year-olds. It would have made a substantial difference, and here we are, rearranging deckchairs on the Titanic of this policy, which is—

Can I just remind the member that we’re on the title.

Yes, we’re on the title, and—

Thank you.

—that’s why—I mean, but the title says it all, right? “(FamilyBoost)”—it’s all just a marketing exercise to make it look like the coalition Government actually wants to help families when they chose to give billions of dollars to landlords and tobacco companies, and for that reason, they didn’t have enough money to do the planned extension of 20 hours’ free ECE, which would have actually helped families who had two-year-olds.

Instead, families with two-year-olds in early childhood education pay thousands and thousands of dollars more, and a very small number—250—and what is that as a percentage of the population? There were 250—no, 249 families—who went through the process to get some sort of rebate. That’s just a pathetically small number, and it doesn’t begin to touch the number of people with two-year-olds. They were saying with their policy, “Oh, well, we thought there’d be a 100 percent uptake.”, but now, even with these changes, they’re saying that a more realistic uptake is 71 percent of eligible families. That means that 29 percent of eligible families—which is nearly a third—are not estimated to take up the benefit of this policy.

So there are many alternative titles, but it’s like “Income Tax (FamilyBoost) Amendment Bill” is not a title that actually captures the impact of the policy. I very much agree with the Hon Barbara Edmonds, the previous speaker, who has said that this should be called the “Income Tax (Trying to Save FamilyBoost from Failing) Amendment Bill”.

Look, a better solution would be not to do this legislation at all, but to go back to what the Green Party have supported, or at least the halfway house of what Labour has suggested, of extending 20 hours’ free early childhood education to two-year-olds. What if we just said that all tamariki are eligible for free, universal public and community early childhood education—why not? What is the reason to not do that? Wouldn’t that be a better policy to achieve the intended outcomes of this bill?

We haven’t been to a select committee, but it’s pretty clear that the policy objective is to improve the uptake of FamilyBoost by increasing the number of eligible recipients and the payment amounts to better align with the Government’s intended level of support. It’s clear that this policy has not worked, and while this legislation—this tweak—is going to try and make sure that more families get the benefit, it’s not as good as what we could have, or anywhere near as good as what we could have.

When we talk to people in the early childhood education sector, they’re very, very clear that this Government doesn’t support quality teachers and it doesn’t support quality early childhood education. It is taking steps through the review to try and water down early childhood education so that it’s easier for the owners of for-profit centres to cut costs, rather than looking at the outcomes we want. The outcomes we want are children who receive the care and who receive the early childhood education that they need to thrive, and we want families that aren’t out of pockets by tens of thousands of dollars every year in order to ensure that they can access that. It’s not a hard ask.

The title of this bill is wholly inadequate. It’s a joke. It should be called the “Income Tax (FamilyBoost is a Joke) Amendment Bill”.

I move, That debate on this question now close.

Dr Lawrence Xu-Nan has been really keen to give a very quick title speech, so I’m going to give him that opportunity.

So has the Hon Dr Duncan Webb.

Yeah. I just said I’m going to give Dr Lawrence Xu-Nan the chance to talk on the title. I note that the Hon Dr Duncan Webb has had one chance. I do want to remind the team that we are on the title, and we are getting to the point where we’re straying off the title and into other things which are more important to talk about.

Thank you, Madam Chair, I really appreciate it. I do want to address the title because I think, overall, what we’re finding here is an incredibly laughable and out-of-touch bill, mainly because it is providing a technical solution without addressing the core issues that we’re currently seeing with FamilyBoost.

So my recommendation is that this title should be “Income Tax (FamilyBoost, but With a Massive Caveat That We’re Still Going to See Limited Numbers of Households Being Eligible to Get FamilyBoost) Amendment Bill”. I mean, I do acknowledge that it’s a very wordy title.

But, I think, if we’re boiling it down, the title should be more appropriately called “FamilyBoost, yet another blue and yellow and black tape we’re seeing by this Government”. So “(FamilyBoost and Blue Tape) Amendment Bill”, because that’s what we are seeing here.

Although we are wanting to address the fact that this is a genuine concern—there are going to be, supposedly, more allocations of budget for something like this—the core crux of the issue, as we’ll discuss further along, is that not enough families have the time or the energy to claim the reimbursement in the first place, which is something we said when this Act was introduced under urgency in last year’s Budget.

So an alternative title should be “Income tax (the Government is Out of Touch With Young Families) Amendment Bill”, or “Income tax (This Government Think That Parents of Young Children Don’t Already Have Enough to Do) Amendment Bill”. Because, frankly, the Government members are completely out of touch with what young parents. Not everyone has the fancy resources that the Government members on that side of the House have; some of them have to work multiple jobs; there isn’t sufficient time to do the compensation and to look at the commencement, to look at—the ability for families to apply for that retrospective amount. That’s my final one. I think that’s the one to land on: “Income Tax (The Government is Out of Touch With the Parents of Young Children)”.

I move, That debate on this question now close.

Now we come to a number of questions and the first one around the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Zero Families Fully Boosted” is ruled out of order as being merely an attempt to criticise the bill.

There are a number of tabled amendments which are also deemed by myself as merely an attempt to criticise the bill so I don’t think we need to go through those one by one, is my judgment.

Yes, we do. Point of order.

My advice says no, I don’t, Dr Duncan, but I will hear your point of order.

Well, the Standing Orders and Speakers’ rulings in dealing with amendments allow amendments to be dealt with together where they are all, essentially, achieving the same thing. Each one of those amendments that you are addressing is quite unique, has a quite different title, and makes a quite different point, eo each of them should be dealt with on each of their merits—whatever the decision of the Chair is or this committee, should be dealt with individually.

OK. Yes, I could group them but I’m going to actually read them as the member’s suggested. It won’t change the result but, as the member’s requested, I will read them.

The next one is that the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Broken Promises” is ruled out of order as being merely an attempt to criticise the bill.

That the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Wealthfare” is ruled out of order as being merely an attempt to criticise the bill.

That the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Show Me The Money” is ruled out of order as being merely an attempt to criticise the bill.

That the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Imaginary $250 Per Week” is ruled out of order as being merely an attempt to criticise the bill.

That the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Desperate Vote-Grabbing Measure” is ruled out of order as being merely an attempt to criticise the bill.

The question that the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “FamilyBoost, But Not Really for Māori or Pasifika” is ruled out of order as being merely an attempt to criticise the bill.

That the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Bigger Subsidies for Richer People” is ruled out of order as being merely an attempt to criticise the bill.

That the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Cleaning up after Nicola” is ruled out of order as being merely an attempt to criticise the bill.

The question that the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Leadership Chances Boost” is ruled out of order as being merely an attempt to criticise the bill.

And that Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Pay First, Subsidise Later” is ruled out of order as being merely an attempt to criticise the bill.

Point of order. That last one, though, that really is quite an accurate description because—

I think—I’d ask the member to be careful about trifling with the committee. I ruled these out of order—

But it’s only the one that I’m asking about. Just reflecting that “pay now, subsidise later” is actually an accurate description of what this bill does.

My judgment has been made, the Hon Dr Duncan Webb. I’d like to ask you to resume your seat and then—

When’s your 13th birthday? So we can get a cake.

Quiet please, we’re voting.

Members, we now come to clause 2, which is the debate on commencement. The question is that clause 2 stand part.

This bill comes into force on 1 July 2025—so that’s backwards-looking from today’s date, which is 17 September. Now, in a sense, that makes a certain kind of sense because this childcare rebate is claimed in arrears. People have to pay the childcare fees up front and collect the receipts from their early childhood education provider and submit those to Inland Revenue, who will pay out the rebate. Even though people are eligible for it from 1 July 2025, they won’t actually have the receipts or make the claim until the end of this quarter. In a sense, going retrospective there is not such an issue.

However, the more interesting thing to consider is: why not make the commencement date for this bill 1 July 2024? Now, there is a tabled amendment putting this in place, in my colleague the Hon Barbara Edmonds’ name, and it’s a very simple one: just replace “2025” with “2024”. It means that the changes in the bill would take effect from 1 July 2024.

The Minister of Finance, when she has been asked questions about this in the committee—I’m referring there to the pressure that my colleague the Hon Dr Verrall has referenced in her speech—has made much of the point that families don’t lose the capacity to claim for their childcare just because the quarter has passed. They can save up their receipts and claim them all in one lump, if they like, at the end of the year or at any time that actually suits them. The point of filing them every quarter is just that that’s how often a family may do it—they are not required to do it every quarter. In fact, I think the Minister of Finance has, at times, said that, in fact, families could claim in three or four years’ time if they wanted to, as long as they had saved the receipts. It was not necessary to claim on any particularly time-bound basis, except for that up to four years.

She has also said that, really, one of the reasons—well, she hasn’t really said it this way—that we are here debating this is that, quite simply, FamilyBoost wasn’t paying out enough. There weren’t enough people claiming it. The settings were wrong. It seems that not everyone who could claim it was claiming it; that not enough people were aware of it; that the only reason that FamilyBoost hasn’t paid out as much as the Minister had hoped was because of some of those issues around not understanding it and so on.

It really does beg the question: if we want to subsidise families more—if we want to cover more of the cost of childcare—why not go back to 1 July 2024? Those receipts are already in. It would be quite straightforward for Inland Revenue to go back and pay out the additional subsidy to those families who had already been there. Why not go back? The idea was to get the settings of FamilyBoost right to ensure that the amount of money that the Government had budgeted for it was actually getting paid out, but, in order to do that, I think it behoves this Government to go back to 1 July 2024.

There will be families who have got receipts sitting there who would probably like to claim them now. Perhaps they might be able to do that if this went back to 1 July 2024. I’d ask the Minister to consider whether or not it would be reasonable to go back to that date on the grounds that that would then get more of the payout that that Government promised to families actually into families’ hands on a reasonably timely basis. So some explanation around that commencement date, please, Minister.

I do want to speak to my amendment which addresses a similar query, and I guess we’re looking to the Minister in the chair for some response on that. My amendment also states the commencement date should go back to 1 July 2024 when FamilyBoost was first introduced, because noting that the date 1 July 2025 is already retrospective, there’s no reason for us to go back even further. Based on what we’re seeing in terms of regulatory impact statement, it also doesn’t specifically highlight, at least from a cursory reading, the reason for that particular retrospective date—I understand it is the beginning of a quarter; that does make sense.

The commencement date also introduces, I guess, a recommendation but also a question for the Minister. I guess the recommendation is: noting that the commencement date is retrospective to 1 July 2025, would the Minister, then, consider streamlining the process of rather than having people reapply for that period if they have already made application, just simply letting IRD, who already have that data on file, proactively give the money to the families and with a difference based on the commencement date. That might be something—just checking. Yeah, that is something I’m not seeing in the bill as providing any clarification. Would the Minister be able to clarify?

My other question to the Minister is: what does the date 1 July 2025 imply? Does it imply the date of service, as in that a family is able to apply for the reimbursement and get the higher rate from 1 July 2025, or is this the date of the application to IRD for reimbursement?

Let’s say certain families who are have applied, maybe proactively before that day, let’s say for the first quarter or for the second quarter—probably in this case more for the first quarter—would not be eligible for the new threshold, whereas families who are applying for the first quarter potentially after the 1 July date then would be eligible for the higher threshold.

So I’d like a clarification from the Minister as to whether 1 July implies the date of service, as seen when a child is at early childhood education and therefore they are eligible for it, or the date of application for reimbursement. Thank you.

Thanks, members, for those questions. In regard to the question on the ability for people to reapply, people will not need to reapply for claims open on 1 October 2025 for early childhood education fees from the 1 July 2025 to 30 September 2025.

In regard to the question around retrospectivity in the amendments, we will not be accepting those amendments. We’ve had 240,000 applications. To have to go back and reopen every one of those 240,000 applications, re-evaluate, and make that is simply not a practical reality—hence the practical pathway that’s been outlined.

This really is the “show me the money” moment for the Government. The Opposition is trying to support the Government to ensure that it meets the purposes of the bill, which is to increase the number of recipients eligible for this payment, to increase the payment amounts, and to maintain the fiscal envelope, but what we’ve just heard from the Minister in the chair is that he does not believe that this should be retrospective back to 1 July 2024, which is covered within the amendment by Dr Lawrence Xu-Nan and also my tabled amendment.

My question to the Minister is: if the Minister of Finance has continually said that families have up to four years to be able to be entitled to this and to lodge their claims for FamilyBoost, why can’t this go back, then, the full four years in which the FamilyBoost payment came into force, which is 1 July 2024? It meets all the purposes of this bill, which the Government has brought to the House because of its failure of this policy. Why, therefore, can they not show families the money that they’re entitled to and take it back from when it first began? The Minister, in his response to an earlier question, just said that October of 2025 is when they’ll be able to apply, but it goes back to payments from 1 July 2025. That makes total sense. Because this is backward-looking, take it all the way back from when FamilyBoost started.

Is the real reason why the Government won’t support those amendments by both Dr Lawrence Xu-Nan and myself because they don’t want to pay out that money to families? They’ve had to come to the House today to change their policy, to fix their policy failure. They’re getting good-faith support from the Labour Party to be able to do so. Why, therefore, can’t they take it all the way back to when FamilyBoost started, which is only an additional year?

To the Minister’s point that they’ll have to go and reopen 240,000 claims, that is still fewer than actually what was first proposed. If the committee can remember, this Government promised that 130,000 families would be eligible for FamilyBoost when they campaigned on it. Instead, we have less than 70,000 families who’ve got FamilyBoost. I think it’s worth the effort, given you’ve got 95 fulltime-equivalents at IRD having to process this. You’re spending 20 percent of this particular policy on the administration. I think you have the resources available to be able to support those 240,000 claims to be able to take them back. If you can do it for the full four-year period, why can’t you do it for a one-year period?

I think this is really the “show me the money” moment for the Government. They’ve come here, they’re fixing their policy failure. They’re saying, “Well, we want more people to be entitled to FamilyBoost.”, but they don’t want to take it back to the very first day that FamilyBoost was in. I don’t think I’ve heard a clear reason other than reopening 240,000 claims. You’ve got the resources, you’re spending 20 percent of the money on the administration, you want people to be entitled to their entitlements—definitely the Prime Minister wants the people to be entitled to their entitlements—so do the right thing by Kiwi families and take this back one year to when you first introduced this policy. We will ensure, as we’ve said, we’ll support you with your policy-failure fix.

Take it back to 1 July 2024. Otherwise, I don’t understand why the Minister is concerned about the 240,000 when the Minister of Finance has said that it can look back past the four years. I’d like a response from the Minister on those particular comments. You’ve got the money because it’s been underspent, you’ve got the bureaucracy set up, and you’ve got the actual information. I don’t understand why you can’t just go back to 2024 other than because it doesn’t meet the fiscals. If it doesn’t meet the fiscals, then it just shows how much more of a failure this policy is in the first place.

Thank you, Mr Chair. This is my first opportunity to speak on this bill, and I wanted to follow up on questions in relationship to the commencement date. I notice that the clock is not moving on me—we can start at five minutes. Thank you very much.

In relationship to the questions that have already been asked, this is something we could have unpacked at the select committee stage. I want it to be noted that we are debating this in urgency. Some of the questions that I think could have arisen at the select committee stage—and, certainly, some of us would have lodged parliamentary written questions to try and ascertain this—is whether, at all, at any point during the development of this bill, the Minister of Finance sought advice on the costings that would have been involved should this have been made retrospective to 1 July 2024.

Did the Minister, at any given time, seek advice in relationship to making it retrospective to the 1 July 2024 date which, as others have canvassed, has an amendment on the Table in relationship to it? If the Minister did indeed seek advice in relationship to exploring options to that date, did officials provide any potential costings that would have involved having this bill with a commencement date of 1 July 2024; if that was the case, what were those costings?

I think the questions that my colleagues have raised are incredibly valid because I think the current commencement date does not seem to meet the intent of the bill as publicly stated by the Government, which is to have more families access this payment. So I’m curious to know as to whether the Minister even bothered exploring this option.

In the regulatory impact statement (RIS) that we’ve been provided, there were four options that were given to the Minister, but we don’t have much detail in terms of whether, at all, the option of having the commencement date on the 2024 date was explored, whatsoever. Following from that, if the Minister did explore having the commencement date in the development of this bill being the 1  July 2024 date, I wonder whether he also asked for a distributional impact analysis, particularly because of the changes in incomes and job losses that we’ve experienced over the past 12 months. I can see that the profiles of people who may have been eligible between the 1 July 2024 date, as proposed by my colleagues, and 1 July 2025 would have changed. Did the Minister seek any advice around the sort of profile of people who could have been eligible for what it is in this bill and 1 July 2024, compared to now?

This is quite important, I think, because the Government talks a lot about the state of the books and I think it would have been quite negligent to not have sought advice of what moving this to 1 July 2024 would have looked like. I think, because we did not have a select committee process, it’s really critical that the Government is upfront with exactly what the initial scoping was that would have been done to develop this bill. The RIS does note that there’s four options, but I’m sure that in the earlier discussions that he would have been having with officials—we could have found out through parliamentary written questions or a select committee process, should this bill have not been brought under urgency, as to whether this date of 1 July 2024 was explored all together.

Just to recap—the questions are: whether, if at all, the Minister of Finance sought advice on an earlier commencement date; if not, why not? If she did ask for the advice, did she get given any costings as to the implications of moving this to 1 July 2024, and whether a distributional impact assessment would have been done if the Minister had explored, at all—in discussions with officials or colleagues—moving this date or exploring having the date beginning 1 July 2024 as opposed to 1 July 2025?

Once again, this is all stuff we could have explored in the select committee stage, which the Government chose not to have, despite knowing for quite a few months that not many families were accessing the full amounts that this policy was intended to provide.

Thank you for the contribution. As part of the policy development process, the Government received a wide range of advice. The four specific options that were considered in the context of this bill are, as the member noted, outlined in the regulatory impact statement, and I refer the member to look at those bullet points which outline the key considerations that were given to this policy.

I appreciate that some members in the Chamber might find it ironic that sometimes you need to stay within appropriations that you set in a Budget—OK? On the opposite side of the Chamber, that doesn’t really mean anything, where it’s just spend money like there’s no tomorrow, fire-hosing the money around, hoping it hits a target, and it never does. I’m glad those days are over, OK? We’ve got sensible, balanced people who actually understand the economy in charge of this place.

We’ve got an appropriation, and the changes in the context of this bill ensure that we meet those requirements.

Thank you, Mr Chair. I would like to point out to the Minister in the chair that he makes a good point about staying within appropriations, but, of course, there has been an underspend in this appropriation—

A massive underspend.

In fact, a massive underspend, and that’s why we’re here, so I’m not sure that that quite answers the point that was being made.

I do want to raise a particular issue—it’s an administrative issue—and I hope that the Minister has talked this over with his officials and that he can provide some reassurance on this because the Minister is not going to backdate this policy to 1 July 2024, but he is going to backdate it to 1 July 2025, and because, as we’ve been told frequently by the Minister of Finance, it’s perfectly possible for people to save up their receipts from their early childhood education provider and submit them in lumps.

I’m thinking of a scenario, Minister, where perhaps a family that hasn’t claimed previously—but, thanks to this bill, is now aware of it because we’ve had to come into the House and fix up these mistakes—would have a whole swag of early childhood education receipts, say, from March this year, or whatever, from April, May, June, July, August this year. Actually, August wouldn’t matter, but last year as well.

Of course, those are receipts that would be eligible for the rebate up to 1 July 2025. I’m thinking of the receipts from 1 July 2024 through till 30 June 2025, for childcare in those periods. Those receipts are eligible for the original rebate—the failed rebate, the one that was simply not paying out enough—and, of course, the receipts from 1 July 2025 onwards are going to get the new refreshed and revised rebate, which will get paid at a higher amount.

That is going to mean a bit of work, and I want to know where this work is going to fall, because there will be families who submit receipts that go over that 1 July 2025 threshold—some from the lower rebate, some from the higher rebate. I want to know if Inland Revenue is adjusting the way it is going to set up the rebate claims process.

Now, my children are in their twenties, so I have not had to do this for myself—I haven’t been able to go in and go through the rebate process myself. I don’t know exactly how it works, but is it going to be the case that people are going to have to put in the date for each set of receipts and that then triggers the amount of rebate that is available to them? That’s an extra compliance cost for the person claiming the receipt. Or is it going to be the case that Inland Revenue officials are going to have to, for the next however many years—and it could be up to four years—go through each set of receipts that is uploaded, and work out whether they are eligible for the earlier, lower rebate or the later, higher rebate? Of course, that’s a processing cost for Inland Revenue.

We know that there are 95 fulltime-equivalent employees engaged in administering this rebate, It’s a lot of people engaged when, typically, we manage our tax system so that things flow pretty seamlessly. I want to know if Inland Revenue is anticipating having to hire any more people because of this change in the rebate. In fact, the Minister has talked about the work involved in going—if we shifted the application date back to 1 July 2024—back and reprocessing receipts and claims for people who have claimed up until now. I want to know if there is any work being done on how much work is going to need to be done, wherever it’s done, to work out how many of the receipts get the lower rebate and how many of them get the higher rebate, and what checking is going on.

It just seems to me there’s two sets of work involved here, and I’d like to know what analysis was carried out on it and whether this influenced the particular start date that has been chosen for this policy, given the fact that the appropriation has been underspent. The actual appropriation is not an issue, but what might be an issue is the work involved.

As the member the Hon Dr Deborah Russell will recall from her time as the Associate Minister of Revenue, the aspect or the point that’s being noted is from 1 July 2025 onwards, families who are claiming the rebate will be eligible for the new rate which we are putting through today. In the circumstance where a family has not made any claims to date in regards to any periods, they will still be able to make a claim; however, their claim, again, will be relative to the period from the start on 1 July 2024 through to 30 June 2025 at 25 percent, and then beyond that at the new rate. That is the way in which it will be calculated. It is a clear-cut point in time of which the rate has changed. From a practical implementation point of view, that allows the department to do what it will do. There is no intent for the department to increase resourcing as a result of these changes. They will be able to deliver that through baseline, because they are a very effective department.

I move, That debate on this question now close.

Thank you, Mr Chair. One of the questions that I’m still seeking adequate engagement on, because the answer that I got is “I sought a range of advice”—but I specifically asked the Minister of Revenue as to whether he sought advice on the commencement date being made on 1 July 2024, and, if so, whether he sought any costings? Because we didn’t have a select committee process, I don’t think it’s good enough to just say “I sought a range of advice.” I think the Minister should honour the fact that this is a process that has been led by urgency.

I have a couple of other questions. Again, these are issues that we would have canvassed at the select committee stage. I think this is quite related to the commencement date anyway, so I may as well use the time right now that I have—it seems amazing that I’ve still got five minutes left—so I appreciate the additional time.

Going on to the issue of how this impacts children, and specifically on the current commencement date we’ve got in front of us, I wanted to ask as to—and I think it’s important for the Minister to put it on the record and in the Hansard—whether a child impact assessment has been done in relation to the bill in front of us. We know that this affects families with children. In a select committee process, ordinarily, members are able to ask for a child impact assessment to be produced by officials. In my view, this is one of those bills where, because it so explicitly affects children, I would like to know as to whether the Minister sought for that to be produced; if that is the case, would he mind tabling the child impact assessment or maybe talk about the findings if one was made? If not, I would like to know as to why that didn’t happen.

If there wasn’t a child impact assessment being done on this bill, I think that’s deeply problematic. Particularly, as other colleagues have noted specifically on the commencement date, we know that additional families could have benefited should the commencement date be brought forward to 2024. Therefore, in terms of the child impact assessment, it would have been useful for the Government to front up and actually give us some more detailed analysis as to what that would have looked like in more detail. That’s one of the things that could have been useful as well.

It would also be useful for the Minister, in relation to the commencement date, to say as to whether he had a discussion with the Children’s Commissioner at all on this issue. I think that’s a really important entity that should be consulted as part of this, particularly, as others have noted—in terms of showing the money to the families that could benefit from this—whether there was any feedback from the Children’s Commissioner in relation to making sure that families could have been captured if the commencement date was brought earlier.

I think this is important because the Minister may have talked about sticking to the appropriations, but the bill in front of us is due to bad policy design by this Government. It’s been brought forward to us because the Government did not design this policy the right way—we’re seeing it in the number of families that are receiving it. Therefore, I think it’s important to get more robust answers in relation to the full scope of advice that the Minister would have commissioned, particularly in the earlier stages of this bill. I think the Minister should talk in more detail about this rather than say “I sought a range of advice.”

The other thing I wanted to ask—and, again, I don’t know if there’s a specific part of the bill in which this would have better fitted, but I think, because this is brought under urgency, this would have come up in the select committee stage as well—is as to whether the Minister sought any advice in relation to whether this bill contributed in any way to the Government’s child poverty reduction targets. I think, probably, the impact would be minimal if there was to be any. I think this is quite important to note because the current projections—the Minister talked about appropriations—that we have in front of us when it comes to child poverty is that material hardship is projected to continue to rise as a result of Government decisions. I think it would be curious if no advice was sought in relation to meeting child poverty reduction targets.

Again, this would have been such a simple question that we could have asked of officials should there had been a select committee stage, or the Minister himself once he stood in front of us. Even though the scope of the bill will likely benefit families that are doing better off, it is important that we get the Minister’s comments on this issue because of the concerning statistics in relation to material hardship.

Additionally, there would have been families that would have lost their jobs between 1 July 2024 and now, who now may be in poverty and may not have benefited with this bill, and would have actually, maybe, received more support if we moved to 2024 while they may still have a higher income due to them still having a job.

To recap, I’m curious to know as to whether a child impact assessment was produced, whether the Minister has got comments on this issue as to whether there was any analysis being done on meeting child poverty reduction targets, and, if not, why not? I’d like to ask as to whether any advice was sought as to changes in potential incomes, and therefore eligibility for families that, for example, would have lost their jobs between the 2024 date and now. As much as I note that backbenchers on the other side are complaining, they brought this under urgency; I think adequate scrutiny is well overdue.

In regards to the questions on a child impact assessment, all the analysis that the member is referring to is in the regulatory impact statement, and while no specific child impact assessment was undertaken, the reason, the rationale, why this is is because this is dealing with tax legislation around impacted family—family—income, and in that context it is not deemed appropriate. However, the broader considerations are outlined in the regulatory impact statement. If the member had read that, he would know.

I just want to speak to the tabled amendment by Camilla Belich that has actually just been tabled. It’s in relation to, or perhaps in response to, the Minister’s concerns about the backdating and reopening of 240,000 claims. I can see where Camilla Belich has been very clever to help the Minister. She’s actually thought to amend it—rather than 1 July 2025, she’s proposing that you move the date to 1 October 2024—so not 1 July 2024 but 1  October. Therefore, the 240,000 claims that have been reopened would be a bit less than that. If the Minister’s got any figures or can break down the 240,000 claims that would have to be reopened, we would really appreciate that. As the member from the Greens Ricardo Menéndez March has raised, we haven’t had an opportunity to take this through the select committee, and we haven’t had an opportunity to be able to actually analyse the bill and get some advice from officials to the additional questions, so I support the comments that he made.

Also, if you go to the 1 October 2024 date, perhaps that will fit the fiscal envelope or the appropriation that the Minister in the chair talked about, because, to Dr Deborah Russell’s point—and, again, I acknowledge her comment in relation to that—there is an underspend in this policy. The regulatory impact statement itself says the uptake is only 52 percent for this policy, so there’s clearly an underspend in the first year of this policy being enforced. I didn’t hear a response from the Minister to the Green Party member’s question—did the Minister seek any advice on a different commencement date, and, if he did, can he step through that advice, because, again, we haven’t had a select committee and we haven’t had the chance to ask that of officials ourselves—and if he did, what was that advice?

Therefore, we can be just as helpful and can keep recommending amendments to ensure that the maximum amount of families may have a chance—and I say only a chance, because it’s quite clear the uptake is so low at 52 percent, and we want to be able to make this as easy as possible for them, and the Government doesn’t want to put in any proposals to actually make the administration easier. Again, they’ve got the money, they’ve got the bureaucracy there, they’ve got the 20 percent that they spend on this, which is on administration costs for the department—I just want to understand from the Minister if he would consider a 1 October 2024 date, because I think that could help him in relation to the fiscal envelope, and, again, I’d really like a response, given this is going through under urgency, to the Green Party member’s questions around whether he actually sought an earlier date—and if he did seek the earlier date, what advice was he given?

I move, That debate on this question now close.

Mr Chair, thank you. I will keep this short, but I didn’t actually get an answer from the Minister in the chair in terms of the administrative load around this changed commencement date.

Now, the Minister made the very correct point that when you look at the receipt date, it’s quite straightforward in terms of how much people get in terms of a rebate. That’s really clearly defined by when the person received the childcare services and the receipts along it. Those dated for childcare before 1 July 2025 get the old rebate; those from 1 July 2025 onwards get the new rebate. That’s a really straightforward point—no worries there—and that was the Minister’s reply.

What I’m concerned about, though, is, actually, the administration of that. Are families going to have to upload extra information to Inland Revenue? Are they going to have to navigate their way through a website which makes them classify receipts into pre 1 July 2025 and post 1 July 2025? Or is Inland Revenue going to have to go through each set of receipts that is uploaded and have people actually checking the date on them and classifying them to ensure that the rebate that is applied to each receipt is the correct rebate? So it’s an actual workload processing issue there.

What I want to know is what analysis was done around that. The Minister has already said that they’re not intending to hire any more than the current 95 fulltime-equivalent employees that are engaged on processing FamilyBoost. But there is some extra workload somewhere in this, now that we’ve got a date that separates how much rebates are worth on one side of that date or the other. So if the Minister could speak to the actual workload, not the calculation.

There isn’t a significant increase in workload on the IRD team as a result of this policy change; it is simply a process change. For the individuals that work in IRD, they will apply that new process to the application. They already undertake quite a significant degree of integrity checking of the information received from parents to ensure that it complies with this law. That will not change in terms of their process, but in the context of the amounts being payable and based on the duration and the dates of the periods being applied for, that will change, but that is not going to have a material impact on staffing.

I’m just picking up on a comment the Minister in the chair made, and I appreciate he delivered it with quite a bit of sass, but, actually, he noted in his earlier comments in relation to my answer that a child impact assessment has been done and it was in the regulatory impact statement (RIS). Can the Minister point out exactly where in the regulatory impact statement there are comments relating to a child impact assessment? There doesn’t seem to be any. If he’s so confident that a child impact assessment was done as part of this bill, why isn’t it in front of us so we can evaluate its findings? This is important because the regulatory impact statement, for example, talks about quite limited consultation, mostly with the early childhood sector. The Children’s Commissioner doesn’t seem to have been consulted at all as part of this bill, and I’m curious as to why that was the case.

I’m also giving the Minister an opportunity to potentially correct himself, because he talked about the child impact assessment being mentioned in the RIS, but that doesn’t seem to be the case, although I’m happy to be proven wrong. Again, if he’s so confident that there was a child impact assessment produced, normally at the select committee stage, we would be given access to it. So why isn’t he presenting to us the robust analysis on the impact on children this bill would have?

This is about demanding that the Minister actually holds himself accountable for the advice that he has sought both in terms of the commencement date but also around the child impact assessment that he claims was done and was mentioned in the RIS.

Where’s the commencement?

I appreciate that Dana Kirkpatrick may be new to this place, and maybe she doesn’t know what a child impact assessment is, but it would be quite useful.

Write her a letter.

If we had had a select committee process we would not be needing to ask questions. That would have been made clear at the select committee stage. I appreciate that these legislators are very new to this place, but I would appreciate that they understand why we’re asking these sorts of questions at this point in time—because they’re related to a select committee process that we have not had.

Anyway, other than the innocuous and useless barracking from the other side, I’ll recap my questions. Is the Minister confident that a child impact assessment was done—[Interruption]

Members, I need to hear him. Could you quieten down a little bit.

It’s fine; I’ll just recap my questions.

But just to note for members, if we can relate this to the commencement clause, I would appreciate that.

I appreciate that but I would like to seek some guidance from the Chair. Where would you like us to ask questions that we could have been able to ask in the select committee stage, including things like a child impact assessment, which is a completely fair thing to be asking at the select committee stage? If it is not now, where would you like us to ask it?

You can do it right now. If you relate it to the commencement date, it’s fine—and I do need to hear.

Going back to my questions, because I do think these deserve answers: is the Minister confident that a child impact assessment was done; if so, where in the RIS is this mentioned? Why wouldn’t he put forward the findings of the child impact assessment that was supposedly done, as he claimed, for the sake of transparency? Why was the Children’s Commissioner apparently not engaged with at all in the creation of this bill, and only the sector?

I would like, once again, answers to questions that have been asked multiple times—beyond just sort of general answers like, “Oh, I sought a range of advice.”—as to whether he actually sought any form of advice on an earlier commencement date. This is about robust lawmaking This is about genuinely presenting to members of the public—and members of the Opposition have a duty to scrutinise this bill—that enough analysis was done on this bill and adequate agencies and reports were commissioned in relationship to this bill.

I do think it’s quite fair for us to challenge the Minister when he makes claims that the child impact assessment is the regulatory impact statement, and for him to tell us where it is. So far, I’ve sought to find it with my colleagues, and we can’t see there at all. So if he’s so confident, tell us where, and if he’s so confident that a child impact assessment was done, table it so that we can look at what the findings were. I don’t think that’s a hard ask. Maybe the child impact assessment didn’t find anything controversial—and that’s fine—but, actually, we do deserve a level of transparency in relationship to the advice that was sought and the reports that were produced. The Minister seems to potentially be incorrect in the previous assertion he made where he said that the child impact assessment could be found in the regulatory impact statement.

I’d encourage the member to look at the Hansard of my response to his question, and if he had listened to my response, the answer would be within that.

Just to give more guidance to the committee, clauses 4 and 5 implement the substantive policy, so that could be a good place to probe more deeply on things like child assessment policies and other issues as well—

Child impact assessments.

Child impact assessments as well. So there is an opportunity in clauses 4 and 5. But if we could keep stuff to the commencement date, the committee would appreciate that.

Thank you, Mr Chair. I find it really interesting how much the Government members are interjecting and trying to take calls to close down this debate given, again, we’re in urgency. We’ve spent less than three hours on this bill—less than three hours on this bill. Look at the date of the regulatory impact statement: it’s 25 June 2025. The question is: why did the Minister not attach this to his August taxation bill, which also has a FamilyBoost amendment in it, so that it could have gone through a select committee process? I find the interjections and the calling for the closure of this debate quite interesting, particularly because what they’re trying to close down are amendments from the Opposition that actually increase the number of people that can actually get the greater entitlements in this bill.

“OK, yes, we need more people to get FamilyBoost because it failed. OK, let’s change the bill. Let’s put in new rates, and let’s increase the abatement threshold.” But, then, when we actually say, “Take it back to when it first started.”, the Government members just want to shut down the debate. I think the real reason is, as the Minister said, the fiscal appropriation, but, as the regulatory impact statement, which is dated June 2025, showed, there’s only been a 52 percent uptake of this.

On the commencement date, there is another tabled amendment, in the name of Camilla Belich, to help the Minister, again, try and get more families into the greater entitlements that this bill introduces with a higher rate, a higher threshold. Camilla Belich has recommended that the committee agree to a proposed amendment for clause 2, the commencement date, to change it from 1 July 2025 to 1 January 2025. Again, it might deal with the processing issue that the Minister spoke about, which is why we haven’t gone all the way back to 1 July 2024. It might actually deal with the fiscal underspend or the fiscal issue because it’s actually 1 January 2025. You might have less people applying for it and less pressure on the appropriation. Or, again, are we just going to hear a response from the Government members to shut down any helpful amendments that would mean that more families can actually be entitled to FamilyBoost in the new changes that come in?

I don’t understand why the Government members would not support any of the numerous commencement date amendments. If you don’t like 1 July 2024, how about 1 October 2024? If you don’t like 1 October, why not 1 January? We’re just trying to help the Government out to improve it even more. The Government members laugh. I know you’re laughing at your own policy failures. It’s quite clear that this policy has been a failure, which is why the committee’s time has been taken up with trying to fix this bill. It doesn’t matter how much the Government members interject. Again, we’re trying to help you out by increasing the number of people that are entitled to it.

This is the Government’s “show me the money” moment because we’ve given them different options for a commencement date. We’ve given them different options for a commencement date, and if they’re going to vote down those commencement date amendments, it quite clearly shows that the Government doesn’t want more families entitled to this; if they did, they would have taken it all the way back to when FamilyBoost started.

Ha, ha!

You can laugh, you can heckle—even the chairperson who I’ve got a lot of time for now, even though I still believe that Nancy Lu should have been the chairperson of that select committee. We still have a lot of support for you, Nancy Lu, the only female Government member on the Finance and Expenditure Committee. This is seriously awkward. However, we are trying to help the Government increase this to more families.

We understand that the Government is embarrassed to have to bring this bill to the House to try and increase the entitlement for families. We’re supporting it because we know families are doing it tough right now. Actually, go a little bit further because you’ve got the money and you’ve got the process set up. Go all the way back—if not to 1 July 2024, then at least, maybe, to 1 January 2025.

I move, That debate on this question now close.

The question is that the Hon Barbara Edmonds’ tabled amendment to clause 2 replacing “2025” with “2024” be agreed to.

Dr Lawrence Xu-Nan’s tabled amendment to clause 2 replacing “2025” with “2024” is ruled out of order as being the same in substance as a previous amendment.

The question is that Camilla Belich’s tabled amendment to clause 2 replacing “1 July 2025” with “1 October 2024” be agreed to.

The question is that Camilla Belich’s tabled amendment to clause 2 replacing “1 July 2025” with “1 January 2025” be agreed to.

We now come to clause 3. This is the debate on the principal Act. The question is that clause 3 stand part.

Thank you, Mr Chair. To your earlier guidance that you provided, this is the part where we can speak about the substantive policy, isn’t it?

This is the principal Act bit. So I was talking about clauses 4 and 5; this is clause 3.

My apologies. Then, therefore, to the principal Act. My question is to the Minister in the chair, the Hon Simon Watts, because throughout the regulatory impact statements, there are some elements that have been withheld due to—I understand that it’s section 9(2)(f)(iv) of the Official Information Act. So my question to the Minister is those particular elements. Again, this is a regulatory impact statement that was done in June. We haven’t been able to scrutinise this in the select committee process. What exactly—or why have they been withheld, and given the date of this particular regulatory impact statement, can they actually be released? My question really is: should some of those changes be done now through this particular bill, or the next bill as part of the taxation bill, or, actually, should this be done as a separate bill itself, or there’s upcoming changes coming?

Thank you, Mr Chair. In terms of the principal Act, I actually want to talk about the overall amendment we’re looking at in terms of the Income Tax Act, because one of the things we’re looking at in terms of FamilyBoost is subpart MH. When we’re looking at MH 1—the majority of the amendment that we’re looking at in this bill is around MH 3 and MH 5, but MH 1 actually sets out the whole purpose of family credit in the first place. I quote from MH 1: “The purpose of the FamilyBoost tax credit is to provide financial assistance to caregivers with early childhood education costs.” Now, with that part of the principal Act, it makes sense, but without any specificity that all caregivers should have some form of financial assistance for the early childhood education cost; however, I’m noting, on page 8, table 2 of the regulatory impact statement, that overall we have seen total year to date 28,540 families or applicants have been denied their claim to FamilyBoost.

I wondered if—seeking clarity from the Minister in chair on whether the fact that there is such a huge number of declined claims actually serves the purpose of the principal Act, particularly section MH 1, at all. So it’s a short question, just asking the Minister for clarity on whether he thinks that the providing financial assistance to caregivers gives the implication that it’s supposed to be for all caregivers, yet we are seeing a lot of claims denied.

While the Minister seeks guidance, I’ll just take another quick, short call on the principal Act which is: other than these two, is there any other part of subpart MH or broader aspects of the Income Tax Act that would be affected by the changes we’re seeing right now?

In response to the question in regards to the elements that have been withheld, those elements are being withheld because they remain under active consideration.

We now come to clause 4. This is the debate on “Section MH 3 amended (FamilyBoost tax credit)”. The question is that clause 4 stand part.

Clause 4 and the debate to come on clause 5: these are where the major work of this bill is done, and I think where some of the policy issues are best discussed. I think it’s been reasonably well established that we have this bill in the House because the policy design was flawed from the start, and now we’re coming back to correct that policy design.

A particular way that the policy design was deeply flawed was that the rebate simply wasn’t going to enough families, and the amount that families could claim simply wasn’t enough. In looking at the regulatory impact statement, we do have some analysis on the rate of uptake and what it’s predicted to be in the new setting. Part of the problem—and I’m quoting from the regulatory impact statement here—is that the current FamilyBoost uptake rate to date is 52.8 percent. Now, it does say this reflects three or four quarterly payments and assumes gradual uptake growth over time.

One point there; just a slight point of clarification which we could have gotten from officials during a select committee process but not today: the way I’m reading that is that officials have collected that information over three quarters, and, over that time, 52 percent of the people who would have been expected to have taken up FamilyBoost have taken it up, rather than that somehow that 52 percent is spread over four quarters, even though there’s only three quarters available. I just wanted a slight clarification there to make sure that we’re talking about the same sorts of numbers. Of course, that 52.8 percent is very low for a policy which aims to put money in people’s pockets, and it’s a real shame that it’s worked out that way.

I guess, when doing social policy like this, there are two possible mistakes that a Government can make, and a Government has to decide which side of that mistake it’s going to err on. Either the Government is going to pay too little, so some people miss out who should have gotten it and needed it—and that’s in fact the mistake that has happened here—or a Government is going to pay too much and some people who don’t need the payment do get it in the first place. That’s just one of those things; it just goes that way. It’s very hard to get a policy that’s exactly perfect. Nevertheless, this one did fail quite substantially. Here’s the thing: by a lot, and perhaps that mistake is too big. It’s why we’re here back in it.

But the new costing and the new model—and this is sitting in the regulatory impact statement—assumes a 71 percent uptake rate over time. That’s still much, much lower than 100 percent and it is still erring on the side of reaching too few people rather than reaching too many people. I want to understand whether that was a deliberate decision made by Government, that they’d rather go under than over? It is a choice and it’s still under. The other thing, though, that I’m concerned about here is that Inland Revenue—and the officials are very open saying that, actually, they just don’t really have good data on this. So they’ve done the best they can with their forecasting, and having worked there, I know how good that forecasting unit is. Those people do a great job with the data that they have available to them, but they are nevertheless saying, “Actually, we can’t be sure about this information.” So we are operating with a fair amount of uncertainty here.

Again, I just want to understand from the Minister in the chair, given that degree of uncertainty that surrounds this policy, to what extent the Minister can be sure that this new set of changes will actually reach people—that people will actually get the benefit of the FamilyBoost policy. Or does the Minister anticipate that he’s going to have to use the new power that’s contained in the current tax bill, the current annual rates bill, of putting through an Order in Council? In fact, there’s that uncertainty that we’re seeing in this regulatory impact statement. Exactly why that new power for the Minister to adjust the settings for FamilyBoost by Order in Council—is that why that’s been included in this other bill? I appreciate we’re discussing this bill right at the moment, but, obviously, there’s an implication through that bill and it does sort of answer a few questions there, as well. I guess I’m looking for a little bit of discussion about the nature of the uncertainty and how it’s affected decision making here with respect to the FamilyBoost bill.

Thanks, Madam Chair; thanks to the member for the question. The inherent nature of any forecast is that it will change. The latest estimated uptake rate is at 64 percent based on 10 September. That is an increase, obviously, from the numbers that are included—that the member has been quoting—and that is because a new quarter’s worth of data is now included within that.

Thank you, Madam Chair. Yes, forecasts are forecasts, but I actually want to ask some questions in relation to the actual data set that his officials used, on page 8 of the regulatory impact statement (RIS). Table 2 talks about the claims that have been denied. The total year to date, as of 11 June, was around 28,540. Does the Minister have any updated numbers on this? Again, we’re under urgency, and we don’t have a chance to ask officials for this information so we can analyse it a bit more. Of those claims denied, how many of them would now be applicable or entitled to the FamilyBoost changes due to the change in the income threshold? If the Minister or his officials have any advice on how many more people would now be covered, who were declined before, that would be quite an interesting statistic for us to understand so that we can ask some further questions on it.

Also, in relation to some of the data that’s provided in the RIS, we note some of the income distribution in figure 3, “Income distribution of families receiving FamilyBoost payment between $950 and $975”. I think it goes to an earlier comment from Dr Duncan Webb, in relation to high-income earners, that they are the ones who are actually accessing this much easier than lower-income earners. One of the comments in the regulatory impact statement from officials is their assessment about how the status quo is intended to develop over time—particular to the claim: “A late surge in claims may occur following 1 July 2025, when the final FamilyBoost payment for the 2024/25 fiscal year becomes available.”

My question to the Minister is: now that we are past that 1 July 2025 date—I accept this RIS was written back in June—do we have any updates to figure 3, which is the “Income distribution of families receiving a FamilyBoost payment between $950 in $975”? Once again, we haven’t had a select committee. It would be really good to understand that income distribution. Following our earlier points on other clauses, we believe that this bill could actually be made better, even though it was a bill trying to fix a failure, but it could be made better. We think that that income distribution for families is actually quite an important question that, hopefully, the Minister is able to seek some advice on from officials.

While he’s seeking that advice, one interesting aspect of this particular figure, figure 3, is the number of families with household incomes that are receiving the minimum $25 payment—sorry, that’s on figure 2, the “Number of claims by amount paid”. Officials in the regulatory impact statement talk about, at the lower-income levels, there being a high peak. Basically, at the low end, a number of families receive FamilyBoost—I think just under 6,000. That drops right back down until you get to the $925, and then it spikes back up to just under 5,000 families, or “Distribution of claims by amount paid”.

One of the interesting discussions I’ve had with a kindergarten out in Porirua, in Cannons Creek, when I visited was about how they’re going with their families who are eligible for FamilyBoost. They said in their first quarter that they got about 15 percent uptake—because they are a low-fee early childhood education centre, they had 15 percent uptake. They had to help their families through the first quarter. In the second quarter, that had reduced to 7 percent. The reason why it had reduced to 7 percent was that the families had to spend time to do the administration of this and were actually only getting between $7 and $15 back. I think that’s the reason why, as the regulatory impact statement sets out, a number of kindergartens and kōhanga reo families won’t be applying for the FamilyBoost. Now that officials have provided the Minister with advice, I just wanted to see if he’s had any response to my questions. Thank you.

Thank you to the member for the question. Based on the latest data that we have available, as of 10 September, there will be 15,636 unique households with declined claims due to their income being over the threshold, but below the new threshold that we are currently considering under this bill. As a result of this bill passing speedily through the House today—with the support of that party—then those individuals, those 15,636 unique households will be contacted by IRD to advise of that fact and have the opportunity to reapply.

Thank you, Madam Chair, I have a number of questions for the Minister in that purview—clause 4—but as well as to the regulatory impact statement. I want to start with asking in terms of the “Problem definition and options” on page 1 of the regulatory impact statement. The particular figure I want to draw attention to is the 71 percent. So on page 1, it says: “A more realistic uptake rate is 71% of eligible families, which is an estimated uptake of about 80,000 families”, and throughout this document, what we’re seeing is the new, assumed 71 percent annual uptake—for example, on page 5—and there was I think another one that I was looking at where they also make the assumption of 71 percent.

I guess the first question, of paragraph 50 on page 17, is: if a 71 percent uptake rate is assumed, I want to check with the Minister on where did the 71 percent come from? It seems, based on the regulatory impact statement, like a number that’s been plucked out of thin air. If the 71 percent is something that it is aiming at, I also want to check—the second question I have is whether the Minister is familiar with Goodhart’s law; whether the 71 percent is going to be a target or a measure, because those two things are also fundamentally different. So where does 71 percent come from, and is that a target or is that a measure? That’s my first series of questions.

My second question is around consultation. My colleague Ricardo Menéndez March has asked previously why, if we’re going to be brought under urgency—this is something the Government is aware of—Mana Mokopuna was not consulted, as a part of that.

But I want to draw attention to paragraph 32 on page 14, about who have been consulted with. I’m surprised that in that list, the Early Childhood Advisory Committee, which isn’t much of a committee—the Office of Early Childhood Education, which, you know, has a particular, very important individual; but this Early Childhood Council, which is the organisation of owners of privatised and commercialised early childhood services. But what I’m not seeing being consulted is public- and community-based early childhood education (ECE) services for their feedback. I would like to ask the Minister: why has there been a cherry-picking of ECE service providers who have been consulted?

The example that I want to give, and this is just one example of many, is Kindergartens Aotearoa. They represent thousands of teachers and they also cater to 12,000 tamariki every single day. That is a substantial stakeholder that could have been consulted as a part of this, if there are already people who have been consulted with from the ECE sector. I do want to check with the Minister my second question, which is around consultation.

My third question is something that we consistently come up with, and I know that others will have more questions around: the availability of resources and reports when we are in urgency for a bill like this, for the House to have as much information, be fully aware of the context that we’re dealing with. The Minister has responded to a child impact statement, but I do find the Minister’s response of “Well, that’s not relevant because it’s an income tax bill.” does not address the bigger picture of the impact that this does have for children.

The one thing I want to address is the New Zealand Bill of Rights Act (BORA) report that has been submitted as a part of this. I understand that it is under urgency; I’m just currently looking at the BORA report now. There’s nothing in the BORA report that has been addressed. I want to check with the Minister if the Minister has actually engaged with the Attorney-General, or anyone else, to even consider the fact of whether there is an implication for section 19 of the BORA report, particularly in association with the Human Rights Act, section 21(1)(b) and (l).

That is my third question, which is: I do find the BORA report lacking for this bill, to be perfectly honest, and I would like to ask the Minister if the Minister had any engagement with either the Minister of Justice or the Attorney-General on the broader implications of section 19 of BORA, in conjunction with the Human Rights Act, section 21(1)(b) and (l).

The member’s time has expired.

Just a quick response to those questions. With regards to the 71 percent rate, that’s based on the FamilyBoost uptake rates to date, as well as observed uptake for other Government assistance programmes. In regards to the consultation, the member asked around public kindergartens and other aspects: they are part of the Early Childhood Advisory Committee, which was consulted with.

Thank you, Madam Chair. I do have some questions that I want to get to when we discuss clause 5. I just want to foreshadow them here, because of course there’s two parts to the change to FamilyBoost: one is increasing the amount that a family can receive; one is increasing the number of families who are eligible, by shifting income thresholds. That’s in clause 5, and I do want to discuss some of the issues that are sitting around clause 5 there.

However, clause 4 is the one that does the work of increasing the amount that’s available. I guess I was wondering to what extent—it’s interesting, here, because the Minister had choices, which we’ll discuss under clause 5, around whether to try to get more families into the scheme in the first place or give those that are in the scheme more money. He’s chosen both of those, but in this bit, in clause 4, it’s giving them more money. I guess this relates to the comment that my colleague Dr Ayesha Verrall made earlier in terms of the pressure that, in particular, my colleague Barbara Edmonds has put on the Minister around whether or not anyone was going to get the full $250 a month that was promised by the Government, in the combination of childcare rebates and tax cuts.

We know that 244 families received the full amount of FamilyBoost, but we couldn’t find a single family who had received both FamilyBoost and sufficient tax cuts to get to $250 a fortnight. Now, by increasing the amount of FamilyBoost that’s available per clause 4, that increases the amount of FamilyBoost, so you need less tax cuts to get to that $250 per fortnight. I guess I’m worried that by making the choice to increase the amount of the rebate that’s available rather than trying to get to some of the families who aren’t receiving FamilyBoost and should be getting it—here, I’m particularly thinking of some of our low-income families, our Māori and Pasifika families, who are not claiming it—was that a really deliberate choice to go after that $250 a fortnight, rather than thinking about where the need is? It really worries me that this is a policy that actually makes those who are well off better off. Those who are not necessarily well off, but in the middle, they’ll get the extra money—that’s a good thing—but what about the people at the bottom end? It feels to me as though they’re missing out.

So a slightly meta-question—I probably won’t have to another question on the detail of clause 4—but just around the extent to which the thinking was around being driven by that $250-a-week tax cut and FamilyBoost target promised in the last election campaign, and the way to achieve it has been done through increasing FamilyBoost.

Tēnā koe, Madam Chair. This is my first call on clause 4, and I wanted to start by speaking to a tabled amendment by my colleague Dr Lawrence Xu-Nan, which, basically, would amend clause 4 to change the expenses claimable from 40 percent to 50 percent.

The Government has stated that the intention of this amendment bill is to provide more support to families who are struggling with the cost of living. As I pointed out in earlier speeches, obviously the Green Party believes that the best way to do that would be to have kept the extension of 20 hours’ free early childhood education to two-year-olds. In the absence of that—which, obviously, this Government has not done and will not do—we think that at least we should be making it possible for those families who are eligible to claim back more funding to support the very high cost of childcare.

What that would do is shift the maximum claimable amount from $1,560 to $1,950. It would make a difference. As the previous speaker, the Hon Dr Deborah Russell alluded to, as far as we know, there is no family out there that has received the amount per week that the National Party had campaigned on and claimed that they were going to deliver in the election campaign. I assume that the mandate they got at the election campaign is the reason for having FamilyBoost rather than a more effective policy that would make it easier for more families to access early childhood education and not have such high costs.

I have a question, but I want to speak to that tabled amendment, and there’s a further amendment paper that I will speak to in clause 5. This tabled amendment also amends clause 5, but it predominantly amends clause 4. I’m hoping that the Minister of Revenue can consider it. The question would be: was increasing the amount that was available to a higher amount—was that considered? I don’t believe we’ve had an answer from the Minister in this committee of the whole House debate to the question of whether there was a distributional impact analysis of the policy—both the policy when it was originally—

More money to more people.

—brought through—yeah, but that’s not what a distributional analysis is, so maybe I can explain for the members opposite what a distributional analysis is. It’s related to other things that have been raised in this debate, which is: who is this going to get to, which people, and what income levels? Is this predominantly supporting people on low incomes, on middle incomes, on higher incomes? Is it reaching the families that are the most in need? That’s what a distributional analysis does.

I’m asking the Minister: has a distributional analysis been done, and would they or did they consider this sort of change of potentially enabling the expenses claimable to be 50 percent rather than 40 percent—which would provide more support with the cost of living and make it easier for families to access early childhood education, which we know is something that is good for everyone in Aotearoa.

Thank you, Madam Chair. I have just a really brief question actually, and it’s around clause 4(3); it says, “Subsections (1) and (2) apply to tax credit quarters commencing on or after 1 July 2025.” I just want to ask the Minister why he needed that specific subclause (3) to that clause when we already know that the Act comes into force from 1 July 2025. It would be great if he could just explain why it needed its own specific enforcement date. Maybe it’s a drafting decision, but it just looks unusual, given the shortness of this bill. I note that it’s also covered under clause 5 as well. Why is there a separate need to set out a commencement date for the subclauses, given that the commencement date of the bill is already covered under clause 2?

I move, That debate on this question now close.

The question is that Dr Lawrence Xu-Nan’s tabled amendments to clause 4(1) and (2) replacing “40%” with “50%” and replacing “$1,560” with “$1,950” be agreed to.

Members, we now come to clause 5. This is the debate on “Section MH 5 amended (FamilyBoost tax credit abatement)”. The question is that clause 5 stand part.

Thank you very much, Madam Chair. For members, clause 5 of the bill proposes reducing the abatement rate from 9.75 percent to 7 percent, applying to households earning over $35,000 per quarter or $140,000 annually. This increase of the maximum qualifying household income per quarter increases from $45,000 to $57,286, or equivalent to $180,000 increasing to $229,144 per year. Accordingly, households with a quarterly income exceeding $57,286 would become ineligible for FamilyBoost.

In regard to a question on distributional analysis and income distribution, I must refer members to the fact that in the regulatory impact statement (RIS) under Figure 1, which relates to clause 5, this analysis is actually included in there. So if the members review the RIS, they will find the response in regard to that point, which is relevant.

Thank you, Madam Chair. I want to just first pick up on two questions that I asked previously to the Minister that I think are still worthwhile. Thank you to the Minister for addressing my consultation question, but I also wanted to check with the Minister in terms of my question around the 71 percent assumption that was made, as well as the question on the New Zealand Bill of Rights Act.

In terms of clause 5, I think clause 5 is where we are able to look at some of the additional options that have been presented here. I guess the predominant question I have is: why 9.75 percent to 7 percent, in terms of lowering the abatement rate? With that, I would like to speak to my tabled amendment, which is lowering the 7 percent to 5 percent, in terms of abatement. I think it just allows more families to have the ability to access FamilyBoost, as well. But I guess the question around that, which I guess I’m a little bit concerned by—and this comes back to the 71 percent, when it comes to the eligibility criteria, which the abatement rate of this section of this clause is a large part of. I’m drawn to paragraph 54 of the regulatory impact statement under option 3, where on the first page they talk about we’re never going to achieve 100 percent. We’re making an assumption that 71 percent is realistic, but in option 3, under paragraph 54, it says that the risk is that there is an uptake higher than 71 percent.

Is it true, then, that the Minister is making an abatement rate from 9.75 percent down to 7 percent on the premise of the 71 percent assumption in order to lock in the 71 percent accessibility as a target and it shall not go more than that? I guess that is a concern for me, because if that is not the case, I would ask the Minister to seriously consider my amendment to lower the abandonment abatement even further to 5 percent so that, in that way, there are more families who are eligible and we could potentially reach that 100 percent uptake rate, which then would be more in line with my original question on the purpose of section MH of the Income Tax Act. Thank you.

I want to explore some issues around the interaction of the abatement rate and the previous clause; they do sort of do fit together. I don’t want to go too far. We’ve done the previous clause, so it’s reference only.

Very roughly, if we think about it, clause 4 covers the amount of the rebate that’s available to people. Clause 5 covers the families who can claim it—all right? That’s quite an important distinction. In terms of clause 5, there are a couple of questions that I think we do very much need to understand; actually, three I want to understand. The first is just a point of clarification. I’m not quite sure, because we’ve only had this bill for less than 24 hours—and good, but not that good. I just want to understand where the abatement starts kicking in from. I think from the way I’m reading it that it still kicks in from $140,000. It’s just that the abatement is now slower, so it goes further. But it’s neither here nor there; it’s just a point of clarification.

The real question I want to ask, though, is around just how far out the abatement rate goes, because what it means is that now that families who are earning up to $229,000 max—but, actually, a family who’s earning $220,000 a year can still get an abatement, can still get some money back under FamilyBoost. It’s only $160 a year, but that’s still a nice little chunk of money. A family that’s earning $200,000 a year can still get $510 a year back. Those are pretty high household incomes. I appreciate that families are under strain, that we have people who’ve perhaps—particularly in that particular age group where you have young children who are in childcare—there’s a whole lot of pressures on household budgets. There’s likely to be mortgage pressures, certainly food pressures, ordinary cost of living pressures. There are childcare pressures. I remember it well. I think a lot of us have gone through that experience. Nevertheless, a household income of $200,000 is a high income.

Now, the Minister has said that the idea here is really wanting to extend the reach of FamilyBoost to ensure it got to more families, but there was a choice to be made here, because another way to ensure it got to more families would have been to work with families to make sure they’re claiming the rebate in the first place. The first set of changes in clause 4 makes the rebate more worthwhile. People get more money back for each dollar of childcare spent—all right? The second change in clause 5 extends the number of families, but it does that by increasing the income thresholds or decreasing the abatement rate.

The alternative was to spend more on outreach, to spend more time seeking out the Pasifika and Māori families who we know are missing out on FamilyBoost. The alternative was to spend a bit more time and effort in making it easier for people to claim the rebate and making sure that people actually got it. We know that people are missing out on it. We know that the take-up rate was around 51 percent, up to 64 percent now. We know that the modelled uptake is going to be around 71 percent. But the alternative strategy for ensuring that more families got the rebate was to reach harder into the communities that aren’t claiming it and to work harder on getting it to those families who aren’t getting it in the first place.

I said in a previous contribution that there are two mistakes that a Government can make in terms of trying to pay out benefits or welfare or rebates or whatever. One is the mistake of being too generous, so it goes to people who don’t need it. Are we making that mistake here by having it go to families who are earning more than $200,000? The other mistake is where families who need the rebate aren’t getting it in the first place. It does seem to me that more work needs to be done to ensure that families who weren’t otherwise claiming the rebate are getting it now. Why that choice, Minister, to simply extend the abatement range rather than making a greater effort to get into our most socio-economic deprived communities?

Thank you very much, Madam Chair, for the opportunity to—

At your leisure, Mr Watts.

Very good, appreciate that. To the questions noted by the member in regards to why “9.75” to “7” percent, the abatement rate decreased to 7 percent and the relevant changes that we had made in regards to, or are proposing to make in regards to the rebate rate increase to 40 percent are both within the original Budget 2024 funding allocation for FamilyBoost, so that is the rationale of why 7 percent.

In the context of what seemed to be a little bit of confusion around the 71 percent: to clarify, the 71 percent refers to the number of families likely to take up the payment out of the total eligible families for FamilyBoost. That clarifies those two.

Thank you, Madam Chair. Thank you for the opportunity to take my first call on clause 5. Again, the bill is under urgency. We haven’t had a chance to be able to actually analyse it at length and with the officials, as well. I appreciate, again, that Government members are trying to shut down the debate, but at least allow us to actually analyse the bill if you’re not going to add anything yourselves.

To clause 5: it’s a similar question to that which I asked at clause 4, which the Minister was not able to respond to. In subsection (3), it provides a different commencement date, which is the same commencement date that is in clause 2. My question to the Minister, at the time, for clause 4 and now for clause 5, is: why do you need subsection (3)? Why do you need a commencement date in subsection (3) for subsections (1) and (2) and clauses 4 and 5? I’m hoping he’s able to provide an answer—whether that’s just part of a drafting issue or whether that is just a style issue; it would be good to know—because those are the types of questions one would ask if we were given a proper select committee process. We would have asked it, probably, as part of the revision-tracked version of the bill.

The second part of my contribution on clause 5 is actually to speak in support of Dr Lawrence Xu-Nan’s tabled amendment to clause 5, which is to replace the “7” with a “5”, which goes down to the tax credit abatement rate. The reason why I stand in support of it is because, similar to other tabled amendments today that have been put forward by Opposition members, these amendments actually fit within the purpose of why we are here for this bill. It’s set out very plainly in the regulatory impact statement (RIS): it’s to increase the number of recipients eligible for FamilyBoost. It’s to increase the payment amounts for FamilyBoost. Again, to the third point, which is where my question to the Minister is: could this fit within the fiscal envelope or the appropriations that he referred to before, given the significant underspend on this policy, to date?

Why I support Dr Lawrence Xu-Nan’s tabled amendment is because, again, it gives families more money. If the Government decides to vote down, yet again, another tabled amendment that is helping to increase eligibility, increase money that doesn’t get cut back for families because of an abatement threshold—I don’t quite understand why Government members would vote down such tabled amendments which actually help their bill. We already know this bill is here because it was a policy failure. We already know that this bill is here because the Government has to try and increase the eligibility—

That’s your opinion.

—increase the eligibility. No, it’s actually here, on page 1 of the RIS: “increase the eligibility”. That is why we’re here—

That’s the reason?

—and if the member Ryan Hamilton is saying that it’s not the reason why we’re here, you can actually read right through the RIS the policy problem that you’re trying to fix with this bill. Since the member has clearly not read the regulatory impact statement, I can take him through the policy problem—the policy failure—that this bill is intending to address. In response to his interjection, it’s around the following factors that may be influencing the uptake in the level of financial assistance. The policy design: the regulatory impact statement says, “a feature of FamilyBoost is that it covers unsubsidised fees.”

I’m just responding to the interjections from the Government side of the House, which I think is fair. “As such, the original estimate of eligible families may have been too high as the model included all families who appeared eligible based on their income … Additionally, the design of the policy as a rebate model requires families to pay for ECE fees before receiving a FamilyBoost payment.” This is a policy failure. To the second point—to the interjection by Ryan Hamilton: compliance costs; “the current model requires families to upload their ECE invoices”—

Can I just ask the member to address her comments to the Minister, not to have a debate across the Chamber?

Fair enough, Madam Chair, and particularly because the Government members don’t want to add any contribution themselves. So to the Minister: again, the policy problem, which a member from the Government side of the House was questioning, which is this is not a policy failure. The compliance costs, the perceived benefit of the policy, the transient population—that’s why this bill is here; to fix a policy mistake and a failure by that side of the House.

I move, That debate on this question now close.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 5(1) replacing “7” with “5” be agreed to.

Dr Lawrence Xu-Nan’s tabled amendment to clause 5(2) replacing “$1,560” with “$1,950” is ruled out of order as being inconsistent with a previous decision of the committee.

Madam Speaker, the committee has considered the Income Tax (FamilyBoost) Amendment Bill and reports it without amendment. I move, That the report be adopted.

This bill is set down for third reading immediately.

on behalf of the Minister of Finance: I move, That the Income Tax (FamilyBoost) Amendment Bill be now read a third time.

I would like to thank the members of the House for engaging with the content of this bill during the committee stage. It is good to see such thought going into the objectives of this bill.

I would like to emphasise one point about FamilyBoost: this scheme is targeted at low to middle income New Zealand families. While some higher-income families will receive some FamilyBoost, the fact remains that FamilyBoost is targeted at low to middle income families. That means that the benefits of FamilyBoost are concentrated on low to middle income families. They receive the tax credit with no abatement. The fact that some higher-income families will also receive some of the benefit of FamilyBoost simply shows the effect of abatement in action.

Just as with Working for Families, we cannot simply abruptly terminate entitlement. It must be abated to ensure and allow for different family circumstances and incomes. That naturally means that although the focus is on low to middle income earners, there is some peripheral benefit to higher-income earners.

To remind you, this bill proposes that FamilyBoost credits increase from 25 percent to 40 percent of weekly early childhood education fees, meaning much larger FamilyBoost credits for eligible families on the fees that they pay. We are also making the scheme available to more families by reducing the abatement rate. This will increase the upper limit for households that receive a portion of FamilyBoost from $180,000 per year of income to just under $230,000.

These are good measures which will bring relief to the targeted income earners, and therefore I commend this bill to the House.

Members, the time has come for the lunch break. The House will resume at 2 p.m.

The House is resumed. I present the report of the Controller and Auditor-General entitled Insights into local government: 2024.

Thank you, Mr Speaker. I want to refer back to a matter that came up in Question No. 7 and just considering Speaker’s Ruling 48/2, and would ask, sir, that you consider whether or not you are making a new ruling about the use of the word “lie” in this House, and if you could come back to us. Thank you.

Thank you. I’ll take that under advisement. That concludes oral questions.

Labour supports this bill, and we support the bill because it puts a bit of extra money into families’ back pockets. We are in the midst of a cost of living crisis. We know families are doing it tough. In the last year—a year under that Government—food prices have gone up 5 percent; fruit and vegetables have gone up 8.9 percent; meat has gone up 9.4 percent; bread has gone up 9.5 percent; cheese has gone up 14.3 percent; milk has gone up 15 percent; all on that Government’s watch.

Families are doing it tough, and right through winter, things have been even worse. In the last year, electricity prices have gone up 11.4 percent, and they’ve gone up because that Government will not invest in renewables. That is why we are struggling and why families are paying higher prices. On top of that, it seems—as admitted by the Minister of Finance today—within the last quarter, when the numbers come out tomorrow, it might show that we’ve been in recession.

The green shoots that they keep on talking about seem to be withering away, and it’s because that Government has failed to support the economy. Families are doing it tough because money is not circulating. Jobs are disappearing; 19,000 jobs in the construction sector. Here’s the thing: propping up the construction sector would have propped up jobs, would have propped up money circulating in the economy, would have propped up small businesses. Instead, we have low wages, an economy that’s stagnating, high prices, and a cost of living crisis.

That is why Labour is supporting this bill: because families are doing it tough. But lest the Minister of Finance say that this is a road to Damascus moment or anything like that, let us be clear that if she says it’s a road to Damascus moment, it’s only because she wants to shine a bright light in one direction and hide the complete failure of her policy in the other direction. The only reason we have been putting this bill through the House in urgency is because the Minister’s policy was a glorious mess—an absolute mess.

That Government came into office saying that they were going to deliver $250 a fortnight to families. Every now and again, they manage to remember the words “up to”. But the headline promise was $250 a fortnight to families, and that money was going to be delivered through tax cuts and through this policy, FamilyBoost. Up to $250 a fortnight, they said—but, when we asked, again and again and again, they could not find a single family that had gotten up to $250. Their headline promise, and they have not delivered it.

In fact, when we pushed and pushed and pushed, what we found was that, in terms of the families who got it, only 244 families had actually gotten the full amount of FamilyBoost. We’ve had a very recent update to that data in the regulatory impact statement for this bill; it’s now up to 385 families who have received the full amount of FamilyBoost, and, of those families, the Government couldn’t identify one that had had the tax cuts as well to get up to $250 a fortnight.

That Government promised that 100,000 families would get FamilyBoost. So far, only 27,000 families have gotten it in every quarter that it has been on offer. That is a failure of a policy, and that is why we’ve been back in the House, putting the Minister of Finance’s tweaks through—to live up to the promises that they made and did not deliver on.

It is really interesting. It was very hard to forecast this policy, as shown in the regulatory impact statement. It turns out, once we got that data, that, of the families who are predicted to take it up, only 51 percent of families had taken it up. Even in the new model—even with the tweaks that are being put through in this bill—even then, only 71 percent of families are projected to be able to take up FamilyBoost.

This policy is still not working properly. Families are missing out, and, if we look at who’s missing out, there’s some really telling data on that—some really telling information. From the Minister’s own officials, and from the regulatory impact statement, it is Māori and Pacific families who are missing out on getting FamilyBoost—who are missing out on that extra money that they so desperately need when we’re dealing with the cost of living crisis being manufactured by this Government.

I can understand why they’re missing out: one of the things that’s going on is that it’s actually hard to claim FamilyBoost. The families who have claimed it say that it’s an easy process—but what about the families who haven’t been able to claim it? We haven’t heard from them, and I know why the barriers might be there. In order to claim FamilyBoost, a family must get receipts from their childcare provider; they must upload them to Inland Revenue, and then they must claim the money back that way. What about the families who don’t have the capacity to copy documents at home? What about the families who can’t get those documents in the first place? What about the families who don’t even have computing at home? What about the families who don’t have easy access to the internet? There are a whole set of barriers there for families in terms of claiming FamilyBoost. I think that bureaucratic process is part of the problem, and we told the Minister that the process would be too bureaucratic.

On the other side of the equation—on the other side of the screen—Inland Revenue has had to employ 95 extra fulltime-equivalent staff members to deliver this policy at a cost of $13 million; 95 people processing receipts and putting the claims through. It’s great that people are employed, but this is a highly manual process, and, again, we told the Minister that the manual nature of this process would create barriers.

“Why?”, we said. “Why on earth?” If we wanted to have this kind of policy of supporting families—of ensuring that we reduced the costs of childcare, of ensuring that children get good early childhood education—there was a perfectly good policy on offer on this side of the House, of taking the existing model, which was working, of 20 hours free early childhood education for three- to five-year-olds and expanding it to two-year-olds. That would have helped families out; that would have made a difference to them, but the Government on that side decided to reject it.

Here’s another one of the stinkers that comes through from the regulatory impact statement and from the information we got with this bill. Sitting in the officials’ commentary on the bill, we have the data and the calculations that show us the income levels that families can earn and still get this rebate. This rebate—only a small amount of money, but money none the less—is available to families earning $220,000 a year. That’s a large income. I don’t begrudge those families getting that rebate—I think we should be helping families out—but $220,000 a year? That’s a very large income for a family. That puts those families well, well into the top 10 percent of families.

Families earning $200,000 get some of this money—that’s still a large income. These are large family incomes, and yet they are getting assistance with childcare. In some ways, I don’t begrudge it, but, in other ways, for goodness’ sake! What we have here is families at the upper end of the income scale getting this assistance, and Māori and Pasifika families not getting it. There is something wrong with this policy; something wrong with the way it’s being set up and the way it’s delivered. Even then, we do not have any guarantees from the Minister that it will work.

The Minister, in the latest tax bill, is putting in a clause to give herself, or himself, the right to make further tweaks to FamilyBoost by using an Order in Council. That, to me, says that they are worried that what they are doing in this bill will not be enough; that they know that they are going to have to otherwise come back to this House again and again and again to tweak their policy because they have not got it right.

Yes, Labour supports this bill—we want families to have more money. But let’s be quite clear: what this bill represents is a giant mess made by that Government, and a big cover-up for Nicola Willis.

Tēnā koe, Mr Speaker. Thank you very much for letting me take the call. The Green Party absolutely supports early childhood education, and, in our view, it is a public good. It should be free, it should be universally available, it should be for public good—not for private profit—it should be the community sector that supports it, we should have qualified teachers. All of this is entirely possible and within reach, as the Green Party demonstrated in our Green Budget in May. It is a completely different approach to the one from this Government. We want to wind down subsidies for commercial centres who are making profits, and we want to ensure that we have a child-centred, fully public system—and why not? What else could be more important than our tamariki?

Early childhood education is an investment in our country. It’s an investment in our future. But, you know, it’s the last thing that this lot want because they’re quite happy with the inequality in this country, as we can see from their actions, which have all gone towards exacerbating and increasing it. The reason is because the people who they represent benefit when there are people living in poverty. It means there’s cheaper labour. It means that they can benefit from tax-free capital gains. That’s why they made the terrible, terrible decision to give billions of dollars to landlords, quite a lot of money to tobacco companies, a couple a hundred million to fossil fuel exploration—all things that don’t genuinely benefit our country in any way whatsoever, but do benefit vested interest.

All of the information about the failure of Nicola Willis’ early childhood education support policy is right here in the regulatory impact statement (RIS), which says, very clearly, “What is the policy problem?” The policy problem is that FamilyBoost is reaching far fewer families and providing less financial assistance than originally intended. A change is required. FamilyBoost was dreamt up on the campaign trail to try and pretend that you can have it both ways: that you can have a National-led Government that is clearly going to prioritise the interests of landlords, private property owners, large corporates, and polluters over the common public good of the country, but they know that that’s not actually popular, so they try to dress it up and pretend they’ll have policies that will take action on the things that New Zealanders actually care about. Families do want more support for quality early childhood education, so the Government dreamt up this policy, FamilyBoost, and cancelled and repealed the extension of the free 20 hours of early childhood education that was set to come in for two-year-olds. Something that would have been delivering real benefit to a much larger number of families over the last year and a bit, year and a half.

Instead, they brought in FamilyBoost. After the time at which the free early childhood 20 hours for two-year-olds would have come in, they brought in FamilyBoost. Now, in 2025, we can see it’s barely getting out there. Only a very small number, 249 families, actually benefited from the full subsidy, so that is obviously a tiny percentage of the families that have young children. It’s not addressing the issues with unaffordability of early childhood education.

Nicola Willis and the Government have come to the House—again—under urgency. By the way—oh, this is here on the RIS, this is good—“Given the lack of available data when the scheme was being designed in late 2023, the eligible population … for the current settings was modelled assuming 100% uptake in order to set the fiscal cost”. They came in with their harebrained policy because we don’t have an independent fiscal institution. In Opposition, it’s all about what’s going to sound good in headlines—“Let’s try to make it look like we’re doing something”—and come up with this crap policy. They come in, the officials, to have limited data, they’re trying to design this programme with no information, and they estimated that there would be much higher uptake. In fact, I think it was only about 50,000 families received any sort of benefit from this, when they originally thought it would be many times more than that.

So, yeah, it was about 59,000 across all of the categories—only $50 million paid out, when they’d budgeted $174 million. What is that? That’s more than two-thirds of the money set aside has not gotten to the families who need it, who are struggling with the cost of living crisis. They come—again—under urgency and try to claim that the Green Party doesn’t support early childhood education or families with young children because we won’t vote for their crap policy brought to us under urgency—again. I mean, it’s just pathetic. Like, it’s just really hard—look, I try to use more erudite language to describe what the Government’s bringing, but I try to be straightforward and to the point and the reality is it’s shallow, it’s irresponsible, it is not good policymaking. It’s disappointing.

I’m sure all the voters who voted for the Government policies, many of them are absolutely regretting their decision because they can see that the economy has crashed, people are struggling, record numbers of people are leaving for other countries like Australia. By the way, they’re going to countries that have a capital gains tax, that have a higher, more progressive tax, that have more public services, because that’s how we as a country deliver quality public services, is having a fair tax system instead of having these complicated, ridiculous policies that say, “Oh, we’re going to try and make low-income, working parents keep their—firstly, they have to pay upfront for the early childhood.” They have to pay up front for it with FamilyBoost and then claim it back with invoices.

Why is this Government creating extra bureaucracy and extra administrative burden on families in order to access some measly support that doesn’t even address the fact that all this money we’re putting into early childhood centres, a lot of it isn’t getting to the kaiako, it isn’t getting to the children; it is getting to the owners in the way of profit. The decisions that the Government’s about to make—because the Minister David Seymour is quite committed to making our early childhood centres less safe, lower cost, with less qualified teachers in order that the owners of those private centres can rake in more profit. As if that is going to help our country. Well, we all know that it’s not. People out there in Aotearoa should know they have a real alternative. We don’t have to vote for your sad, pathetic attempts to address real issues when they don’t address the issue, and we will not—we will not.

I want to read more from this regulatory impact statement because I thought it was quite fascinating and quite telling. So we’ve got the distribution of payments by income and payment amount. I asked the Minister during the committee stages if there had been a distributional analysis of the impacts of the policy, and he claimed that Figure 1 showed that. Well, it really doesn’t, because it only includes the people who have actually accessed the money. It doesn’t include the many people who have not accessed this who are eligible. It doesn’t look at the overall impact. But what it does say is that of the people, the families who are accessing this, the data shows that claims and payments are concentrated among families at the higher end of FamilyBoost income eligibility, particularly those, you know, they’re still not high income, but overall the policy is still not addressing childcare costs for the people who need it most. That’s the problem with the overall design of it.

If you want people who are under stress, who are low income, who are dealing with kids, who are maybe working multiple, insecure jobs, who maybe have insecure housing because the Government has made it easier for landlords to kick out tenants for no reason, who are maybe dealing with insecure work because the Government has made it easier for employers to exploit workers, that they have to somehow figure out how to navigate myIR and figure it out. Also, it may not even be worth it to them to do that, because they’re simply likely to receive smaller payments and see less value in claiming FamilyBoost.

All of this just to say that it is terribly disappointing, I think, for New Zealanders to have this Government who is so short-sighted, who is so much in the pocket of vested interests, of big business, of fossil fuel interests, of private, corporate, of owners of early childhood centres who cannot understand the value of investing in our people; who do not care about reducing inequality and looking after tamariki and ensuring that they have quality education; who do not understand the value of women providing basic, core, essential services to our economy and who rip money away from them. It is a disgrace.

I want to acknowledge that when this Government recognises a problem with laws that have been made, we act very quickly to fix them. We don’t stand here in the House and pretend we don’t know what the problem is. We are here to fix things that matter.

That is why the Income Tax (FamilyBoost) Amendment Bill is so important. It aims to reduce the cost burden of early childhood care on families. The goal is to make childcare more affordable, particularly for lower and middle income families. That is why ACT is here in Parliament: to fix things that matter. We support this bill.

We have established across the House today that early childhood education is not just an investment in our kids; it’s an investment in our long-term human capital, productivity, and prosperity. We congratulate the Minister for her work on this bill. It’s the right policy in the right place at the right time. We commend this bill to the House.

Tell us why.

I just did.

A five-minute call—Ricardo Menéndez March

Thank you, Mr Speaker. I think it’s really telling that so many members of the Government are unable to acknowledge the policy design failures and to adequately own up to them. Kudos, at least, to one of them—Simon Court—for acknowledging that in the previous contribution that he made.

Let’s begin by acknowledging the fact that we’re debating this bill under urgency due to a complete botch-up by the Government, who, I would say, has gone as far as mischaracterising the policy during the election season, promising that this would provide genuine and meaningful cost of living relief for families with young children. As the months have rolled on, what we have found is that most families have not been able access this support at all, let alone receive the maximum support available. At a time of growing inequality and of growing material hardship for children living in poverty and for the families who are currently being locked out of accessing emergency housing and are living on the streets, the Government’s flagship policy seems to be, right now, under urgency, simply expanding the income brackets so that higher-income New Zealanders can access this FamilyBoost payment.

It’s not a meaningful intervention in a cost of living crisis that has been, literally, worsened by decisions that this Government has taken to cut thousands of jobs and to deprive people living in poverty of essential assistance from Work and Income. It simply aims to pander to the early childhood education (ECE) companies that are running our early childhood education centres as a for-profit business, as opposed to a public good. Early childhood education should be a core public good that is adequately supported, where the workers are well looked after and there are enough workers so that they can look after the children that they care so much about. Right now, what we have is a Government that is simply subsidising corporations at the expense of the future of our children. This policy, unfortunately, does not go any way to addressing the core underlying issues that are preventing so many families from accessing early childhood education.

My colleague Julie Anne Genter talked about some of the design issues that this policy has—particularly, the barriers it creates for low-income families who desperately need support. The fact that the policy has been designed in a way that means that you have to pay first before you can access the rebate, means that, for lower-income families, it still remains a barrier. This is why the Greens, rather than pushing through the technocratic and poorly designed policy, would instead champion ECE as a public good, adequately support the workers, and make it free so that no family in Aotearoa—no matter their income bracket—has to make decisions about whether they can afford early childhood education or their bills.

What is also really clear as well, looking at the regulatory impact statement on this bill, is that this Government chose to not engage with the agencies who have public good ahead of profit when it comes to their interests. Looking at the regulatory impact statement, it is incredibly clear that they chose to simply consult with people in the early childhood education sector as opposed to, for example, the families who have not been able to access this very same policy, or, for example, consulting with the Children’s Commissioner who would’ve, in my view, been a critical agency that this Government should’ve consulted with to get really important feedback on the impact that this policy is having on families.

This policy is a joke if this is the Government’s flagship cost of living relief on top of the tax cuts that will disproportionately benefit high-income earners. They need to turn their faces away from the halls of Parliament and on to the streets to realise that inequality is growing in this country, that more people are living in the streets, and that this FamilyBoost bill will do nothing to alleviate the hardships—many of them caused directly by Government decisions—that they have inflicted upon our communities. The Greens are fighting to not just get rid of this Government but to have a Government that treats early childhood education and things like dental care and things like our GP services as core public goods. Yes, we will make the wealthy few pay for it, as much as it scares the members on the other side.

The Green Party won’t be supporting this bill, because it’s a terribly designed policy. It does not meaningfully deliver cost of living relief and does not address, in any way, the fundamental issues within our early childhood education sector. We look forward to working with families affected by the cost of living crisis to put forward alternatives that meaningfully allow families to have what they need to live a thriving life. Kia ora.

Point of order, Mr Speaker. I seek leave to make a personal statement to correct an answer to an oral question.

Leave is sought. Is there any objection? There appears to be none.

In response to question No. 7 today, when asked on the latest stats around the Gangs Act, I said that 225 individuals were charged under the Gangs Act in the previous year. I should have said that it was 255.

The National Party is delighted to support the third reading of the Income Tax (FamilyBoost) Amendment Bill. Of course, it’ll ensure that more families are eligible, it will lift the amounts that are available. I commend the bill.

I rise to again provide Labour’s support for this bill, not because we support the policy itself when it repealed what was an excellent policy of early childhood education free for two-year-olds but because Kiwis right now are doing it really tough. My electorate of Mana is an area that is one of the highest deprivation areas in the country. It’s an area that I drive past as I go home every day. Every day in my constituency of Mana, I see the impact that the high cost of living is having on our families. I see it when Pātaka Kai, which is the first time we’ve had a soup kitchen in Porirua, has had to be open this year to feed the homeless people who are now increasing in our community.

I was able to go and help out one particular Monday at Pātaka Kai, which is led by Ngāti Toa, our local iwi, to talk to homeless people about the struggles that they’re facing, to be able to have a conversation with them because a lot of people ignore them, and just to be able to play a simple game of Last Card. What really saddened me at that time was I recognised a person and I said to this young person, “What’s your name? How old are you?” That young person was 23 years old and I said, “What school did you go to?” She told me her school. I recognised then and there that in many of my children’s school pictures in my home, there was that young person in the same classroom as my daughter. This is the impact that the cost of living is having on our families every day—that a 23-year-old is homeless; a 23-year-old that was in the same class as my daughter. These are the struggles that everyday Kiwis are facing.

So that’s why Labour is supporting this bill. We know that, right now, Kiwi families need every single dollar that they can get. We’ve had a lot of political debate today over this particular bill because, yes, it has come in under urgency; yes, we haven’t been able to, as a Parliament, scrutinise it and ask officials the detail of this bill; but what we did on this side of the House was try to be constructive. We tried to offer the Government members ways to actually increase the eligibility, to increase those payments. We said, “Change the commencement date of this bill.” FamilyBoost started on 1 July 2024, but this bill only comes in from 1 July 2025. Why can’t you go back to the very side of your failed policy—but none the less a policy—and make that the commencement date so that families that missed out then can actually get some now? Why can’t we go back there so that some families can get a little bit more? That was voted down by the Government.

We also, constructively, had tabled amendments that increased the abatement threshold just a little bit more from 7 percent, down to 5 percent. For those members who don’t know, when that abatement threshold cuts in, that’s at the level at which every dollar after that threshold gets cut back. Dr Lawrence Xu-Nan offered 5 percent, but the Government voted it down.

Let me take you back to why we are here for this bill. This bill was meant to help families with the cost of living, with the childcare costs. Yes, we disagree—we believe that extending early childhood education to two-year-olds was the better policy but we came to the House today to be constructive, to try and help the Government fix their failure of a policy, to try and make it better, because right now it is absolutely appalling that I, as the MP for Mana, have to go to a soup kitchen and recognise a homeless person who’s only a year older than my daughter and happened to be in her class. That is an indication that something is wrong with our society. Something is wrong with our economy when you have a 23-year-old who is homeless.

We came to this House today to be constructive, to offer constructive tabled amendments, to help the Government—and it sits within the scope and purpose of this bill. It was to increase the number of recipients eligible for the payment. Those tabled amendments were to increase the payment amounts. Those tabled amendments were also to help maintain the fiscal envelope for the scheme because the regulatory impact statement, in the absence of a select committee, was actually a very good statement because it set out that only 52 percent have actually taken up this policy. There was fiscal headroom for this—because there’s clearly an underspend.

We implored the Government members, with tabled amendments, to try and get Kiwi families that extra dollar more. Instead, they were rejected. They were laughed at by the Minister of Finance, and they were totally voted down, which to me points to “Where is your connection with your communities?” Where is the Government members’ connection with their communities? Do you not see the increased homelessness? Do you not see the increase in unemployment? Do you not see the increase in pain on our families today? If you did, you would have had your road to Damascus moment and approved those tabled amendments. Instead, it was shameful that Government members turned down those tabled amendments during the committee of the whole House.

One particular biblical story that I think might help the Minister—and I went to an all-girls Catholic school, and I was very, very good at religious studies.

Good school.

Very good school, yes, on the North Shore of Auckland. One of the things that I learnt at that Catholic school was around social justice, the importance of social justice and making wrongs right. One of the stories, which I think members on the other side of the House might not necessarily remember if they went to a Christian school, is the story of King Nebuchadnezzar. That particular story is about unrepentant pride, and, unfortunately, what we’ve seen through this House is a party who is incredibly proud about this bill, about bringing this bill to the House. Yet when time and time again the Opposition tried to be constructive, to help extend that bill so it actually helped more families, all we saw was rejection, laughing, and the voting down.

I do stand here proudly as a Labour Party member, being able to support this bill. I don’t support FamilyBoost as a policy because I believe that early childhood education extension to two-year-olds was actually better. It was better for a number of reasons. Firstly, the family didn’t have to apply for it; secondly, they didn’t have to try and gather their invoices and receipts every quarter; thirdly, they didn’t have to go on to myIR and input their information; and, fourthly, they didn’t have to wait for their reimbursement.

Who has time for that?

The Hon Kieran McAnulty asks “Who has time for that?”

Not working people.

Not working people, which is why the uptake of this particular policy has been so bad. If the members on the Government benches don’t believe me, then they need to read their own regulatory impact statement, which actually sets out the problems with this policy.

Working parents are time-poor, and what you see in the distribution of income within that regulatory impact statement is that those at the highest income are the ones that are actually accessing this policy. Why are people on higher incomes able to access the policy more easily? For the same reasons that Dr Deborah Russell set out. It’s access to digital. It’s access to computers. It’s access to printers. It’s access to all the things that many of the members in this House take for granted.

I implore members on the Government benches, go and talk to your communities. If you’re a list MP and you don’t necessarily want to talk right up and down the country, go to Wellington. Go to Wellington City. Go to the city mission there and talk to the City Missioner Murray Edridge. Go and talk to him about the impact he’s seeing on Wellington City with the rise in unemployment, the rise in homelessness, and maybe get some perception and some humility, and be connected to your communities. Again, I think it is a travesty of our society when I go to a homeless kitchen and I see a 23-year-old girl, who was in the same class as my daughter, be homeless.

Where were her parents?

I hear the Minister say, “Where were her parents?” but this is the thing—life is complicated. If you stay connected with your community, you’ll be able to understand the complications of being a human being. I’m not going to pass judgment on that 23-year-old. Instead, my job is to be able to help her, to be her voice, and to support a bill that will, hopefully, bring a dollar extra for our families.

Mr Speaker, thank you. This bill will help provide people $6,240 more a year. We’ve increased both the eligibility and the amount of money that people will receive. We’ve just heard from the Opposition that some of their amendments have said, basically, “Let’s do more and more—even than what we’re doing now.” Yet they voted the first one down. They say, “Shame”, but they’re going to support today’s amendment. They’re trying to have their cake and eat it too. I commend this bill to the House.

This is a five-minute call—the Hon Willow-Jean Prime.

What a speech to follow. I have spoken on the earlier readings of this bill in the House, and I have outlined what my concerns are in terms of a missed opportunity that we have here today to make this scheme more accessible to more families. This Government has completely ignored that, and they haven’t taken the time, and they haven’t acknowledged that this is one of the key issues that New Zealanders have—that working parents have—with accessing their scheme.

We know that this bill is an admission that their original policy has been an absolute failure. It’s taken almost two years for this Government to acknowledge that it has been a failure and to come here and fix up their mistakes. The Minister—the Hon Nicola Willis—could have been a little bit more humble in her contribution earlier today, but instead we heard her laughing and dismissing and attacking the other side of the House. This Minister should have been a bit more humble in coming here, accepting that a mistake has been made and that they are doing something to fix it, and open to the further suggestions that this side of the House had suggested that could improve this, but that didn’t happen. Instead, she chose to focus on us and our change in position of now supporting this policy.

Let’s be very clear: Labour is supporting this because these families were promised this money, and they have not received it because the Government overpromised and under-delivered. Let’s look at the statistics. Up to 130,000 people were supposed to benefit from this policy. It’s been a complete failure because only 244 families have received the full amount, and we don’t even know one single family who has received the $250 that they promised. Nicola Willis promised 100,000 families would get FamilyBoost, but only 27,000 families have consistently received it.

We heard in a contribution in the second reading how wonderful it is that $69 million had been paid out, but what that member on the other side of the House failed to mention is that it was expected that $174 million would be paid out—over $100 million short on what New Zealanders were promised. Labour supports this bill because it will result in more families actually receiving cost of living support despite this policy’s abject failure.

When I started, I talked about my concerns that the Government has rushed this through without giving consideration to how they might make this scheme more accessible to busy, working parents, instead giving them even more life admin on top of looking after young people. I spoke to the ECE Parents’ Council Aotearoa yesterday and they talked about this additional life admin that many stressed, working parents are having to do in order to access this. Why could it have not been made simpler? We know that this has been an issue because we see that the IRD are fielding a huge number of phone calls, something like 28,000 phone calls about FamilyBoost, over 20,000 web messages relating to FamilyBoost, and that they’ve spent $13.9 million on administering this with 95 fulltime-equivalents working on it. That is money that could be going directly to families, but instead they’ve made it such a cumbersome process and ignored the request from parents to make this a more simplified process. Why can’t the Minister of Finance do that? Why is she making it harder for families to access something that she promised?

But you voted for it.

Oh, look at her! Where is that humility? That’s what I was talking about earlier—absolutely none, absolutely defiant in coming to this House. Kia ora, Mr Speaker.

New Zealand, don’t believe them, don’t believe anything they say. They don’t support this. They don’t support more money for working New Zealanders. Check the Hansard: they voted against it in committee stage every single clause; they don’t support it. If you can take one proof point, look at what Deborah Russell said, look at what Barbara Edmonds said. They said, “We don’t want to extend this. We don’t want to give this to more high-income families.” Well, guess what! Those families: one police officer, one nurse—go and sit on the street and go and talk to them, go call them high-income families and say, “We’re going to take money out of your pocket.” I look forward to seeing a single policy proposal from the Labour Party at some point, but we see nothing.

Thank you, Mr Speaker. I look forward to a 10-minute contribution on this bill, which will be somewhat more fulsome than the Minister’s earlier contribution. Labour supports this bill, the Income Tax (FamilyBoost) Amendment Bill, because it puts money where it’s desperately needed, and families under immense pressure need that support, as the Hon Willow-Jean Prime has said. Even though it is difficult and even though it is administratively burdensome for these families to claim this difficult rebate scheme, there are still families who really need this support. Even though this is not what we would have done—these are interventions which would have been better dealt with through Labour’s policy to extend early childhood education more fulsomely and more universally—this is something that we can get behind, because in the current situation where families are dealing with an affordability crisis that the Government is overseeing, they need some sort of relief, and this is something positive that the Government can do.

It’s biting harder here for most families than other parts of the world because of this Government’s hands-off approach to economic management for them. These are policies that many institutions around the world have urged Governments to take on, particularly targeted relief for families that are struggling with rising costs that they cannot get out of: rising food costs, rising power costs. Having some sort of subsidy designed to put the relief where it is needed most, particularly for families with young children, is sensible economic policy.

To design that policy in a way where it is hard to claim, where it is difficult for people to understand, and where it is not universal is not the advice. This is a policy which has been designed in a way which is harder and more unreasonable for people to claim for. It creates more indignities in an economy which is already in the grips of monopolies, who are quite happy to trick people—to trick people with unfair pricing and to trick people with prices that are not well displayed in stores and so they end up paying more. Online in ticketing it is common for New Zealanders to be paying extra fees on top of what they thought they were paying.

The Government is using that tactic here to introduce more and more barriers for people who need persistence and perseverance to get a fair deal. Why are we happy for New Zealand consumers and these families to need to jump through more and more hoops to get what they deserve from a Government who says that they are helping families and helping with a cost of living crisis when, in fact, the only people getting that are those who are most persistent, who are keeping their receipts, who are keeping their records, and who are the best placed to actually get any of that support. There’s not one family that the Government can point to who are getting the full amount. There are some families out there who are owed that, but they are not claiming it. There are these families who are going by the wayside, and I’ll talk about that a little bit more.

When you look at this kind of policy and you look around the world and you compare it to other jurisdictions, one thing that you would notice is that the rest of the world is picking up, that global inflation has peaked, and yet New Zealand is stuck because the Government’s responses are things like this that don’t get to the people who need it—that don’t address where the pain is being felt most. That’s because the plan doesn’t match up with the promises that were made in the election campaign. Their vision for economic growth is growth for a few at the top. They’re talking tough with people like supermarkets, with people like banks, but they roll over when they are asked for concessions.

The results are clear to the families we are talking about today—the families who are not getting the $250 that they were promised, the families who are walking down the supermarket aisle when they were told at the election that this was a Government that was focused on rising food costs and noticing that things are continuing to go up, those families who are paying more in every power bill. Those families know that they are living through an affordability crisis, which is getting worse and worse under this Government.

The results are also clear for those 19,000 New Zealanders who have lost their job in the building and construction sector. That’s only since this Government took office that there has been this massive downturn in that particular sector. Those are 19,000 people who could have been supporting their families and supporting their children through early childcare and through early education. Those are 19,000 people who were buying a pie and a Coke at their local bakery and putting money into small businesses and into their local economy. None of that is happening and that’s why these families, even if they’re not directly impacted by those job losses, are feeling that this economy is getting worse and worse and it’s getting worse for them.

The Government also chose to only put the minimum wage up by 1.5 percent. A huge number of these families have seen their wages going backwards in real terms this year. As prices rise around them and the cost of butter goes up 40 percent, those families who are minimum wage earners are seeing their real income drop and drop. The affordability of simple things like a dinner of mince on toast is now out of those families’ reach. That has a big impact on children. What the Government should have been doing is focusing on the impact on those kids. This policy is not designed to help those kids because it doesn’t get to all of the kids. As my colleague the Hon Deborah Russell said, a more universal policy—

What, so you want the really, really rich people’s kids to get it? Where’s your socialism now?

—would have dealt with the Māori and Pacific members who that member’s—who is heckling me—own policy documents show are missing out on being able to claim this policy. It should have been in their hands and it should have been a better-designed policy that really got to them and gave them some sense of relief in this affordability crisis.

Nothing in FamilyBoost helps those families who know that this is a problem and that also they are living through an economy where larger and larger corporate entities own more and more things, and therefore they are paying more and they are also dealing with the indignities of being tricked into paying higher prices that they didn’t even expect. There’s nothing in this to actually address the problem of continuing affordability problems for those families.

It’s also getting sucked up. I mean, this is a good policy that we need to offer these families some relief for, but it’s getting sucked up into their rising costs. When you have food prices that are up 5 percent, fruit and vegetables that are up 9 percent, meat up 9.1 percent, cheese up 14 percent, and power bills up 11 percent, the Government might like to laugh it off, but that is having exactly the kind of impact on these families that sees them working harder to stay in the same place. This is a policy that will still see those families working harder but feeling as if they are living a life which is worse than it was two years ago or, as the Minister would like to say, 22 months ago. The difference isn’t relative for these families; the difference is that they are working harder and they’re not earning as much. This Government has made choices which mean that they have lost their jobs and they have lost their salary increases that they otherwise could have expected.

This bill is meant to be the answer to that. They told New Zealanders that they would get up to $250 a fortnight in relief, and $150 of it would come from this policy, but they cannot show us one family who are receiving that. That is not relief; that is the same logic of those companies that are charging New Zealanders more than they expect to pay and those companies who are operating in monopolistic markets where they are making excessive profits from what their reasonable costs are. That is the same logic where you make it harder and harder for people to get a fair go, and easier and easier for those people who are restricting their quality of life to get away with it. It’s not logic which lets anyone live a dignified life and it’s not the way you would design an economy where people feel like and are really getting ahead.

What’s worse—we’ve talked about this—the design of this policy is cumbersome and, frankly, ridiculous. Families keeping every childcare receipt, feeding them through the Inland Revenue Department, and then waiting, when the alternative was Labour’s policy, which made this available to them without doing that. Well, there’s no wonder that only 27,000 families have managed to get any payments. Families being busy with kids is something that we all know is true, and it shouldn’t be the case that exactly those people who are the time-poorest of any generation in New Zealand are the people who should be encumbered with this sort of administration. It’s not fair on those families and they know it too. This is the way to design a policy if you were setting out to make it something that didn’t pay out to these families—that is the way you would do it.

This sense of indignity that people feel, the sense of being tricked, is not something that this Government will get away with for long. When people feel like they are being laughed at because of rising prices and their wages are not keeping up, they know that there is a problem. No matter how much the Government tries to brush it off, no matter how much the Government tries to blame other people, tries to blame those families, tries to blame the Labour Party, tries to blame the small businesses who are on-charging for surcharges, no matter how tough the Government talks, those families who are finding it harder and harder know that things are getting worse and they have got worse since the election. This Government is making the cost of living crisis worse for families with their decisions.

Big fat lie!

They are tinkering around the edges with competition policy without really addressing the true cause of the issues that families are facing, and they are making things worse.

Before I call the next member, Mr Meager, you heard the Speaker before. There will be a ruling on the use of that word. Refrain in the meantime.

It gives me pleasure to rise to give this, the final speech, as we mark the passage into law of the Income Tax (FamilyBoost) Amendment Bill. The changes we are voting for as a Parliament today mean that tens of thousands of families with very young children will be financially, materially, better off.

I do want to acknowledge the important change that has happened with this bill, which is that the Labour Party, who previously opposed the significant FamilyBoost scheme to support tens of thousands of Kiwi families, have reversed that position and are now going to support this important policy from the coalition Government. Now, it may be the case that their speeches on the matter have been more focused on critique than support, but what we know counts is their votes, and they are voting for it, therefore endorsing this policy.

There is no wonder why, because households will get much larger FamilyBoost rebates on the early childhood education (ECE) fees they pay, as a result of the passage of this legislation. While it is just a short bill, it will have a big impact for many people because rebates are being increased from 25 percent to 40 percent of fees for eligible families. That means, for example—and a very practical and relevant example—that a family with early childhood fees of $200 a week could now have their weekly FamilyBoost payment go from $50 a week to $80 a week. That is meaningful. That is a meaningful amount of money, which will certainly make a difference to the household budgets of many parents with young kids. In that example, that family would receive a quarterly payment after three months of attending early childhood education each quarter, and then, over the course of the year, those payments would have added up to $4,000—$4,000, which previously, if we were not amending the legislation as we are today, would have been $2,500. That is a significant difference to families with children, being delivered by this Government. We know, very much, that a lot of families are still doing it tough, and so we are pleased that these changes will help many households deal with the increased costs that come with having young children.

In addition, it is relevant that those with household incomes of up to $229,000 will now be eligible for the FamilyBoost scheme. This broadens the net of families who will benefit from this policy. It doesn’t change the fact however, that FamilyBoost remains focused on low to middle income households—unashamedly so.

I was surprised by Arena Williams’ remarks that there were some children who would not be eligible for the policy. That is the case. Children in very high-income households who already receive subsidies through the early childhood education system, through the education system, will not qualify for this rebate. That is a surprising position from the Labour Party that they would wish to see those children in very high-income families getting more support.

But what this scheme is is targeted, so those families with slightly higher incomes will receive, at least, partial FamilyBoost payments as a result of this legislation. As with Working for Families, we have introduced an abatement rate, with the idea that we shouldn’t abruptly terminate entitlement when a household gets to a certain income; we should gradually reduce payments as incomes rise. Yes, there’s benefit for some households further up the income curve, but the focus of the scheme remains on those with lower incomes.

As has been discussed throughout this debate, FamilyBoost is a quarterly scheme. This reflects the limitations that IRD face in terms of their ability to make payments more regularly and assess payments more regularly. The changes will apply for fees paid from 1 July this year. Good news is, if there’s anyone listening to this debate today with children in early childhood education, ask your ECE service for an invoice for the last three months and you can apply for this rebate on 1 October. That should be the case. If you previously qualified for the scheme, you’ll probably get more out of it now, but even if you haven’t previously qualified, apply now because many thousands more families are now eligible for the scheme.

If there’s one thing that members in this House can do to make their votes real—and I urge Labour Party members opposite to take this course—it is to go out and remind all of the families in your constituencies and the communities that you care about to make sure they get the money that is owed to them by applying for their FamilyBoost rebate. I encourage households who think they may be eligible to register for FamilyBoost on the Inland Revenue website, and I can assure them that families who have done so tell us that once they have their simple invoice from their early childhood service, it is simple to upload it and apply. In fact, it only takes a few minutes.

I thank members for their contribution to these debates, and I thank the policy officials and drafters for their work on this bill. They have been responsive in ensuring that the Government’s intention to ensure that the funding that we have appropriated for the purpose of supporting families with young children goes to families with young children. With these tweaks we are making today, the funds that we budgeted for in 2024 will reach the people they are intended for. They will get into the bank accounts, back pockets, and household budgets of families with young kids: a time in life that I certainly recall and that many in this House are still experiencing, that is beset by pressures from all sides, not the least of which are financial.

Those people are very much in the minds of this Government because one of the things I want us to reflect on is that parents with young kids are doing two jobs. One job they’re often doing is going out and earning an income for their household to pay for the nappies, to pay for the food, to pay for the house, to pay for the activities; but the other work they are doing, which is so very important to our society, to our economy, to the New Zealand that we want, is they are parenting their children—and parenting their children well is something that we want to acknowledge. With these FamilyBoost payments, we are ensuring that they get just a little more support.

This is a day of rare and—I have to say, Mr Speaker—unexpected bipartisanship. I did not expect, following the ongoing quibbling we’ve heard from the Labour Party about whether or not these tens of thousands of families deserved this income, that Labour would come down to the House today and support the FamilyBoost scheme and vote for it. But they have, and that is the right course of action and I look forward to them continuing to support it into the future, doing their utmost to promote it and reversing their previous course, which was to deny the support for families with young kids.

It’s a great policy. It gets cash to people who need it. It gets it to them directly. This one is for the kids. I commend it to the House.

Thank you, Mr Speaker. I rise on behalf of the ACT Party in support of the Customs (Levies and Other Matters) Amendment Bill. I think that this is a fantastic bill that looks to support a lot of our businesses while also making sure that we have the ability to be able to pay for that support. I particularly like what is in Part 3 of this bill, which is ensuring that we can get GST refunds available to all importers who return goods valued at over $1,000, including looking at work around those who are not GST-registered also being able to extend how long it is before they can return goods and apply for GST refunds, if needed.

There is one aspect of the bill that I ask the Minister to be fulsome on and to work with her officials on, and that is in regard to the levies for recovering costs relating to goods management. I’m thinking, as the Minister in charge of firearms reform and having come from a wholesale industry where a lot of prohibited goods are imported by one person or one company but also have to go through a process of approval with different agencies, as well, that we need to ensure that when the levies are set for businesses who may end up having two sets of fees to pay, that is considered at the time that the levies are set.

All in all, it is a great bill that is going to get things moving, support businesses, support the Customs Service, and get this country rolling. Let’s fix this. We commend this bill to the House.

Thank you, Mr Speaker. Look, I’m happy to take a call here on the second reading of the Customs (Levies and Other Matters) Amendment Bill. We considered this in the Foreign Affairs, Defence and Trade Committee, and I’d like to thank committee members from across the House for their time and work on this, and for advisers’ contributions as well.

Ultimately, this is about efficiency—making the system better—and that is one of the core aspects of this Government: improving efficiency. That, ultimately drives productivity gains, and that drives economic activity. That’s what we want to see on this side of the House, so I commend this bill.

As has been noted in the first reading of this bill, it is largely technical in nature. It seeks to improve the way Government agencies, particularly Customs, recover costs and manage imported goods, while also progressing product stewardship schemes and providing greater clarity for consumers on GST refunds. There are incremental but important changes and, on balance, the Green Party continues to support this bill.

The bill amends three existing pieces of legislation—the Customs and Excise Act 2018 and the Goods and Services Tax Act 1985 and the Waste Minimisation Act 2008—to support the implementation of product stewardship by clarifying the role of Customs in collecting stewardship fees.

Product stewardship, simply put, is: if you made it, you’re responsible for it at the end of its life. We all know it’s easier and cheaper to buy a new kettle than get one repaired. It wasn’t that long ago that a kettle bought as a wedding gift would last a couple’s lifetime. Let’s get back to that and have less in landfill.

As my colleague Francisco Hernandez noted at the first reading, the Green Party has a commitment to product stewardship and the zero-waste kaupapa. The Waste Minimisation Act started as a member’s bill and was championed by former Green MP Nandor Tanczos—who is running for the Mayor of Whakatāne—and passed with cross-party support.

The Hon Eugenie Sage did amazing things with product stewardship in her time as the Associate Minister for the Environment. We are happy to see the Government is continuing to progress on product stewardship through the changes proposed in this bill, particularly through enabling Customs to collect fees tied to product life-cycles. This is a sensible and efficient step, especially when dealing with imported goods. It gives appropriate powers to allow Customs to support product stewardship without requiring new stand-alone systems.

We need to move towards a system that reduces waste. Waste minimisation is about moving to the top of the waste hierarchy. Reduce and repair are right at the top; recycling is right at the bottom.

Point of order. Sorry, Mr Speaker, to interrupt the speaker but I believe she’s on the wrong bill.

The member can continue.

Thank you. Waste minimisation and a circular economy that futureproofs our next generation is best summed up by the words “waste not, want not”. Consumers want to have eco-choices. We see it with choosing the bus, worm farms, growing kai, buying local, and researching eco-solutions. The Waste Minimisation Act is about shifting responsibility upstream on to producers, importers, and distributors, to replace the burden of waste on whānau, councils, and Papatūānuku, and ultimately allow us to move towards a circular economy. These amendments help support that transition.

This is not just a practical and sensible change but it also helps promote a culture of repair over replacement. Consumers want to choose eco, but the system encourages fast consumption and throwaway culture. Extraction, production, consumption—throwaway; a straight line all the way to the dump. We must make it easier and cheaper to repair goods, and this is a practical step and contribution towards waste minimisation and a circular economy.

It also ties in with the Greens’ broader advocacy on the right to repair bill, championed by the Hon Marama Davidson and Ricardo Menéndez March. Supporting repair practices means supporting consumers, small business, and the environment.

I want to shout out to Repair Revolution Christchurch, Repair Cafe New Zealand, Para Kore, WasteMINZ, and the Zero Waste Network for your contributions to product stewardship. You will be celebrating this small but important step in moving towards product stewardship and a circular economy.

While this bill is technical, it supports important progress and, most importantly, allows for stronger foundations for product stewardship. The Green Party supports these practical steps towards a circular economy and a waste-free Aotearoa, and we commend the work behind the bill. We will be voting in support.

Thank you. Before I take the next call, just to clarify for the House: it’s the Customs (Levies and Other Matters) Amendment Bill, but Part 2 is the amendments to the Waste Minimisation Act 2008, and Part 3 is amendments to the Goods and Services Tax Act 1985—so those are the “Other Matters”.

Before we move on, I need to correct a vote—tēnā koe, tēnā koutou—on the last bill, the Income Tax (FamilyBoost) Amendment Bill. The Ayes were 107 and the Noes were 15.

Thank you, sir. Look, waste minimisation was one area discussed in select committee; another big one was around GST refunds and whether this was opening a loophole for those that might claim it back on damaged goods but also might import more goods duty-free. I’m satisfied that, from the work in the House, that doesn’t apply, so this bill becomes one more part of our plan for economic growth to deliver better quality of life and more affordable living for every Kiwi. I commend it to the House.

Tēnā koe, Mr Speaker. Thank you for the opportunity to stand and speak on the Customs (Levies and Other Matters) Amendment Bill in its second reading.

I want to be very clear with Labour’s position on this particular matter during the second reading, and it is that we will be supporting the bill through this particular stage but will be interrogating parts of it, in particular, through the committee of the whole House. We want to signal to the Minister and to the Government that we believe, as was prefaced by our colleague on the other side of the House—the Hon Nicole McKee—around the matters pertaining to new section 414A, “Levies for recovering costs relating to goods management”. I thought the honourable member made a very good point that, I think, requires a little bit of interrogation and perhaps some consideration by the Minister, with respect to where it says, in subsection (2), that “Every specified person is liable, while there is a levy order in force under subsection (3), to pay a levy to the chief executive”—it goes on, anyway, to speak about certain matters that relate to that particular part of the bill. It says, in subsection (2)(a), “any of the following activities: (i) the importation or exportation of goods: (ii) the shipment, transhipment, or transport of goods”, and it says, in subsection (2)(b), “any of the following goods: (i) prohibited goods” —which I believe Minister McKee was talking about—and then it says there, “craft” and “other prescribed goods”.

I think that deserves a little bit more interrogation where we can ask ourselves, whenever we look towards making an impost on the public in this sense—it’s either a levy or a tax or a fee—we’ve got to ask some very key questions, and they must be answered in order for the House to make sure that what they’re doing is the right thing for the public. One of those questions that we have to ask ourselves is: what is the level of the charge? What is it, exactly, that we’re charging here? We’ve got to be very clear with the public about what does this mean—what does it mean for those that do import and export goods? What does it mean for the matters that Minister McKee raised about some of the prohibited goods that look to be imported into the country?

The other question that we must always ask ourselves is: is the cost of providing the service relative to the income that comes from the impost of the cost? That’s an important one, because otherwise, we’ve got to ask ourselves, “Well, is this efficient? Are we making it harder for people out there? Are we making it even harder upon those agencies that we asked to recover these fees and costs, when, actually, what they are recovering doesn’t cover that?” That’s, I think, another question that must be asked in this process.

Of course, one of the primary ones is: what is the purpose of the charge? We’ve heard some good examples across the House during this debate about why we think there are good reasons. I thought Kahurangi Carter explained some good ones with respect to the matters that she raised, which I understand were in Part 2, which you elucidated in your kōrero from the Chair, Mr Speaker. But we must always ask ourselves those questions on: what is the purpose of the charge? The next one is: who does it apply to? I thought that was the point that Minister McKee referenced in her contribution—she spoke to a very specific part of the community with respect to the importing of prohibited goods. So we’ve got to be very clear on what we’re asking ourselves there.

The next one is we must ask ourselves: in that process, are we eroding the democratic power of this House? That’s an important question, because I know that there are ways that we can have efficiencies, we can look for expediency in certain matters, but to do things by Order in Council, I think, deserves proper interrogation. To just simply say, “We’ll do it by Order in Council”—having been a Minister for six years, we’ve got to make sure that the House, right across the House and all members and all parties of the House, get an opportunity to interrogate these matters to make sure that it truly does represent the people, so that it answers those questions that I asked of the House a little bit earlier about “What is the purpose of the charge? Is the level set at the right rate?”

All those kinds of questions that, I think, need to be interrogated by the House, and in order for those changes to happen, must continue to be brought back to the House and not simply changed through Order in Council. As I said, I understand why we might do Order in Council; it does provide for an efficient way for the Minister and the Government, the executive, to make some changes there, but for something that’s so important—and we’ve all spoken across the House about the need for economic development and economic growth and making less red tape, and cutting through matters so that they can be far more efficient—we still can’t erode the powers of this House. That’s why we want to interrogate that particular matter and we want to offer to this Government and to the Minister through the committee of the whole House on whether or not we can continue to grow the support, certainly from the Labour Party on this bill, by tightening up or at least interrogating and asking for the Minister to clearly answer and consider the questions that I’ve just raised in our Part 2 speech in the second reading of this bill.

I think those are all really fair questions that need to be answered by the House. In the previous bill, I heard the Minister of Finance talk about what it is that we must take back to our constituents and the communities that we represent here in this House. I think once we’ve answered those questions, that’s when we’re able to say to those communities, “This is the reason why this is happening. This is why the level of the cost is set at this much, and this is why this is good for either our community or our economy.” I’m sure, for the most part, they’ll agree with those things, but they will have questions—questions like, “OK, is that a set rate? Will that rate change in the future? Does it mean that we’re going to be back here in a month’s time, in a year’s time or some time in the future, or whether or not that change will impact on me and my services or my goods, or me and my community?”

I think those are fundamental questions, and if there’s one thing that I can say and continue to remind the House of, it’s the erosion of those democratic powers. I’ve been here, certainly not as long as other members that are sitting in the House here this evening, but long enough to know that once that starts, it turns into an open gate whereby, as any farmer will tell you, trying to stop a sheep running through a gate—especially one that’s open—is very difficult. The point there is that we must make sure that there is a hand on that gate, so that people understand that when we do these things, those democratic powers and expectations that our people have of this House aren’t eroded. Like I said, we support this particular bill, but we want to make sure that, in the next stage of this bill, we’ll continue to interrogate that matter.

When we speak of taxes and levies and other matters, we also want to make sure that it is fair and that it’s not charged twice on returned or replaced goods. A fair system, as Kahurangi Carter mentioned in her contribution here, is going to be something that will need to be looked at and interrogated properly, and must answer that question that I asked earlier about, is the administration of this particular levy—or GST, in this particular matter—far outweighing the income that is derived from it, or is it simply more bloating of a bureaucracy that means that, while well intended, it actually doesn’t hit the mark?

Those matters being said, we look forward to the next part of this bill, where we will be looking to propose a number of Amendment Papers for the Minister’s consideration in the hope that we can strengthen this bill. If there’s one thing we know about when levies or taxes are imposed by this House, it’s that it’s best that actual support is broad right across the House and that consensus of this House is something that represents the people; if it isn’t, well, then we’ve got some challenges, and I suspect that those challenges fall directly on the shoulders of the Minister and the Government. We’ll be looking towards making some very—what I think are—fair and reasonable recommendations to this bill to make sure that it does continue to strengthen the democratic processes of this House while also being very clear about what it is doing, what it intends to do, and answers those questions that I’ve asked of the House a little bit earlier. We look forward to that part of the House.

I want to support the words of the chair of the Economic Development, Science and Innovation (EDSI) Committee and say, too, that in the short time that I was off that committee—found myself off the committee of EDSI—we did cover the bill of the Hon Marama Davidson around second-hand goods and the longevity of goods, which I think is a good part that’s covered here in this bill that Kahurangi Carter spoke to.

All in all, once again, to spell out our position, we are continuing to support this bill, but I look forward to the committee of the whole House, where we can interrogate it just a little bit further and offer, if I can, an olive branch to the Minister to seek broad consensus across the House, so that the House can speak with one voice. Mr Speaker, thank you.

Thank you, Mr Speaker. I rise in support of the Customs (Levies and Other Matters) Amendment Bill. This legislation modernises our border cost recovery by introducing targeted levies that reflect the actual services provided by the Customs Service. It ensures fairness, and that those who benefit or create risk at the border will contribute appropriately. The bill amends three Acts, introduces safeguards, and prevents double-charging. In our view, it’s a practical, future-focused reform that strengthens our border systems while supporting trade and economic resilience. We commend the bill to the House.

The next call is a split call.

Thank you, Mr Speaker. It’s a pleasure to take a call on the Customs (Levies and Other Matters) Amendment Bill.

This bill—as my colleague Peeni Henare has outlined today, and previously my colleague Jenny Salesa discussed when this bill was first brought to the House—has a number of elements to it. The second two parts of the bill—Part 2, which looks at waste minimisation, which I think is something that is a very good step and builds on a lot of work done over many years, and, I think, is probably an area that we need to do more on. I’m aware of the work that the Green Party has done in relation to a member’s bill on this, as well, so I’m definitely supportive of further efforts in that regard.

The third part, which is around the recovery of GST, seems to be quite sensible; you don’t want GST charged twice on returned or replaced goods. There is, as many enthusiastic online shoppers will know, a $1,000 limit before you are charged GST on your overseas goods, and when people return those goods, obviously that GST shouldn’t be charged, because they no longer have those goods. I think that sounds like a sensible change that aligns with common sense.

The main part of this bill that I think is of interest to the Labour Party in terms of improving the bill is really through the quite strong and wide powers that are given to the Minister of Customs in terms of levy-setting powers over quite a wide range of goods. That is really, I think—I’m looking forward to the committee stage where we will be looking to see if the Minister is minded to make some improvements.

I have had a look at the tabled amendments moved in the name of my colleague the Hon Jenny Salesa, and, I think, on our side of the House, we would be very keen for the Minister to have a look at those amendments to see if she is willing to engage with those, because I do think, if she was minded to engage with and accept some of these particular amendments, that would lead to a better piece of legislation. They’re mainly in the areas around—for example, in clause 6, there’s a long list of different areas that the Minister can charge a levy, and the last one is prohibited goods. That is quite a wide area that a Minister could choose to utilise their levy-setting power in, and there’s a proposal from my colleague to look at deleting that particular provision.

There’s also democratic powers, which I think are important. My colleague has suggested, I think wisely, that when we are setting these fees and levies—which do come out of people’s incomes—there is oversight of that, and so wanting those to come back to the House. We have actually discussed a bill under the Defence Act which was looking to take powers away from the House in terms of confirming the actions of the Minister and, while these are not linked—they’re two different matters—there is a pattern here that I don’t agree with, which is taking away the powers of the House and giving more powers to Ministers, which erodes, slowly, the democratic nature of this House.

We do have to be mindful of that. As colleagues have said, we are supportive, generally, of the bill and of the modernisation aspects of the bill, and also in relation to the second two parts of the bill, but I do think scrutinising the first part is particularly sensible. I would draw the House’s attention to the part that discusses “without limitations” in clause 6. This is a very, very wide power, and, obviously, Ministers in the New Zealand legal system have a large degree of power due to the way the executive works. However, when we are putting in place legislation, it is unusual to give such discretion to a Minister without having recourse back to the House.

So we’re really, I think, clearly signalling general support for what is the stated intention, but we have clear concerns around Part 1. We do have a strategy for addressing that, which is that we have, in good faith—and my colleague Jenny Salesa, I’m sure, will speak to this—tabled amendments in relation to the bill. We encourage the Minister to accept those amendments, and, obviously, we will see where the discussion goes in terms of the final bill that is put forward, but, at this stage, I commend this bill.

Thank you, Mr Speaker. It sounds like all the parties are all for this moving to the next stage. This Customs (Levies and Other Matters) Amendment Bill obviously has powers that the Opposition has identified. I look forward to the committee of the whole House questioning, and answers from the Minister passing judgment on why it’s been drafted the way it has. With that, I commend this bill to the House.

Mr Speaker, thank you very much. This bill might seem like an innocuous one that is just a bit of a tidy-up and the Government’s just moving ahead with making things “more efficient across the economy”, they say; this is always their mantra. So the Customs (Levies and Other Matters) Amendment Bill: it actually goes to the heart of who we are as a nation—a trading nation. The Government makes a lot of noise about keeping costs low, but what this bill does is it actually opens the door to any charges for anything in relation to customs, import or export of goods, at the Minister’s behest. That is a dangerous situation for any democratic system.

I think we have, in this House, a great history across Parliament of appropriate oversight of such levy-making processes. We have funds that are set up whereby, you know, there’s an agreement between industry people and Government that says that, “Well, if we’re not quite sure what a charge will be or how much income will be generated, what the cost of that will be, then we’ll set up a fund, we’ll assess the fund, and then we’ll change the levies accordingly at the end of a one- or two-year period.” It’s not in this piece of legislation. One of the things that I would ask is that how can we trust—and then indeed, the Minister of the day might be fine and is trying to make things efficient and transparent, but we don’t know who will be the Minister in the future. With a number of pieces of legislation that we see this Government bringing to this House, “Oh, it’s all very tough and fine, and we’ll manage this and ensure we get the right outcome because we’ll hand it over to the Minister to make the final decisions. We’ll shortcut the process that might require a parliamentary oversight because it’s more efficient.”

When you hand those powers into the hands of a Minister—and you might think, “Oh, Cabinet has oversight”; ultimately, the legislation says “the Minister”. With the wrong advisers or the wrong advice—and those who have been in Cabinet, there are always hierarchies within Cabinet, and systems that are not always perfect. So, in fact, the broader oversight of the levy-making processes and secondary legislation in this House should be protected and insured.

While we kind of thought it’s good to modernise the system of levies, there are a couple of things in the legislation, as my colleagues have pointed to, that raised some flags with us, and a reminder to the Government that what goes around comes around. While being assertive and confident and, I guess, dominant in the Parliament of the day and getting what you want—which is, I guess, the right of democracy—and handing things over to a Minister, that situation will change, I can promise you.

We will be—that is, the parties in the Opposition—in Government at the end of next year, and I have confidence that our Ministers will address this in an ethical and appropriate way. I, too, even when we’re in Government, want to have some checks and balances on the independence of Ministers, particularly here, when, as I say, it goes to the heart of imports and exports—the way this country operates. Let’s not dismiss this as some small, little insignificant piece of legislation. I mean, we talk about the Waste Minimisation Act and there are some sensible changes there, but, again, looking at the significance of this, it is important that we have proper scrutiny.

Perhaps the Government members can get up and explain exactly what they’re doing and why they’re doing that. I think that would offer the wider public some confidence that, indeed, in urgency, that the Parliament is scrutinising legislation appropriately. If we are looking at costs—and let’s not pretend that this Government has come in and cut costs for business. They say that, but, actually, you can look at many, many levies—because if you go back 18 months or you go back to the first Budget, of course, the Government gave tax cuts to a whole lot of people, most of whom didn’t need it. Those who did need it didn’t get much. So how would you pay for that? They have looked at every part of Government operation and squeezed fees and levies wherever they can: civil aviation, registration of a car—all of those things that affect people; people who have no ability to offset or remove themselves from that charge. So the Big Brother, “Big Government” operation has been brought to play and is extracting every single thing it can from people through levies, including customs. We say that we need to look at this more carefully.

I think that my colleagues will go through and, as I say, probably table some amendments, I understand, but there are areas of particular concern that I should go to here. We have under clause 6, levy orders, of course—and people should read this, because they might think this is just some kind of political speech to oppose legislation for the sake of it. Clause 6: I’ll read through it here. I won’t read the whole lot; I’m trying to shorten it up so that Ministers, and also members over there can—“performing a function under this Act, or any other legislation, relating to goods management, including (without limitation)”. Two words there: “without limitation”; normally we would have in a piece of legislation some principles of what costs should be set and why, and how they’re processed. This says, “(without limitation) costs incurred relating to—(a) any of the following activities: (i) the importation or exportation of goods”—pretty much anything that we rely on—“the shipment, transhipment, or transport of goods”.

Those levies and fees can be imposed upon the transportation and movement of those goods—not just the goods themselves, “any of the following” goods. And I can’t quite understand this one: prohibited goods. So how would we levy prohibited goods when they shouldn’t be here in the first place? What’s the kind of logic of that? Maybe the members on the other side there, part of Government, can get up and explain how you would levy prohibited goods. Craft; other prescribed goods—I can understand that. These are all things that are of genuine concern to the Opposition who wants to move ahead, grow this country in a sustainable way, not just make a lot of noise about growth and then squeeze the people who have driven that growth and invested in that through backdoor levies and charges.

I’ll just go on, and I’m very aware we’re kind of running out of time here, but “The Governor-General may, by Order in Council, made on the recommendation of the Minister”—so the Minister will come up with a bright idea, talk to a few people in his or her office, and then go along to the Governor-General, and, you know, there’s a few processes there, this is not just “Wander up and knock on the Governor-General’s door.” but it is on the basis of the Minister, not a process of consulting with stakeholders, consulting with affected parties and ensuring that the bright idea doesn’t—which is what the regulatory impact statement says here—“impact adversely, unfairly on small business”.

I’ll finish off saying that, when we look through here, we are not opposed to change and modernisation of regulations and charges where needed, but we do need to have some limitations. We do need to have some rationale for the change in those charges, and this piece of legislation says, “without limitation”. It is really important that the Government explains how they’re going to do this into the future, and, in particular, the many, many thousands of small-medium enterprises that make up our economy. The companies like Fonterra and the meat companies, they’ll get through this, they’ll shift that, either give less to the farmers or more to the customers, but the small-medium enterprises across New Zealand are going to be hit by this piece of legislation. They need to know how much it will be, they need to know why, and whether they’ll be able to trade through this.

It’s a pleasure to rise in the second reading of the Customs (Levies and Other Matters) Amendment Bill. This is quite clear: it introduces new rules to help Customs recover costs and improve certain fees and levies and how they’re managed. I haven’t heard any dissent across the House during this reading. Therefore, I commend this bill to the House.

This bill is set down for committee stage immediately.

Members, the House is in committee on the Customs (Levies and Other Matters) Amendment Bill. We now come to Part 1. Part 1 is the debate on clauses 3 to 11—“Customs and Excise Act 2018”. The question is that Part 1 stand part.

I just would like to take the opportunity to open the initial discussions and thank the members for their contributions in the second reading. It has been helpful to structure this discussion.

This bill is about making revenue collection on imported and exported goods fairer and more effective. It is creating a levy regime in place for recovering costs related to travellers—the border-processing levy is an example. This works well and we think we should do more.

We want a similar system for cost recovery around goods. A levy means that similar types of people, a category of payers, can pay the costs related to that service. It makes sense that, for example, those people shopping overseas, online, importing products should be paying for the costs associated with that, rather than that cost falling on all taxpayers.

The bill makes three key changes, which have been outlined: introducing a levy regime into customs legislation and providing an assurance that it is a levy regime and that the establishment of any levies would work through a process, which would require Cabinet approval and would definitely require consultation, so that it isn’t at the discretion of a Minister individually.

It clarifies that Customs or other agencies can collect, as has been outlined, the stewardship fees. This, again, is about creating some efficiencies to support their process, and, finally, as has been raised, the ability to recover GST on returned goods. At this stage, there has been no mechanism under which we can do that.

In summary, the bill is really about improving systems. I recognise the contributions that have been made in the second reading. I look forward to answering your questions on this bill.

Thank you for the opportunity—kia ora, Mr Chair—to, as the spokesperson for customs for the Labour Party, make a contribution in the committee of the whole House stage. The Customs (Levies and Other Matters) Amendment Bill is an omnibus bill that proposes to amend three different pieces of legislation: first, the Customs and Excise Act 2018; second, the Waste Minimisation Act of 2008; and, third, the Goods and Services Tax Act of 1985. The goal, as the Minister of Customs has set out, is for revenue collection at the border to become fairer and more effective.

Now, Labour has supported this bill at first reading as well as at second reading, and one of the reasons is that we are in support of the broader aim that the bill proposes, which is to modernise cost recovery and to enhance efficiency, including the measures to fund environmental programmes and to make GST rules fairer for our consumers. However, Minister, we have serious reservations about the sweeping new levy-making power, particularly in Part 1 of this bill, and the potential impact that that would have on—and our former Minister of Trade spoke about it earlier in his second reading speech—especially, our small and medium sized enterprises (SMEs) and our small businesses.

If we are to refer to new section 414A(2) in clause 6, which actually states that this bill will be able to relate to “goods management”, it actually includes these words. It says that in collecting the new levies, it will have—and it’s got it in brackets—“(without limitation) costs incurred”, and then it goes through and lists various other activities that it could actually levy in order to collect from small and medium sized enterprises. This is what we have major reservations about. One of the reasons why we have major reservations about this part of the bill is that the two words “(without limitation)” may sound like it’s kind of innocuous and it’s only two words, but it’s actually huge because it does not give any minimum or maximum limitations on the costs to our small businesses. At a time when Aotearoa New Zealand is going through and experiencing cost of living issues, we hear on the ground from many of our small businesses that they too are experiencing smaller margins and slimmer margins, and when they are feeling the effects of the cost of living as well, it is of concern.

The other concern that we have with this term of it being “(without limitation)” in terms of costs that could be incurred by a levy made by Order in Council is that you have the environment of a country like the United States charging tariffs which, in the past, were going to be at 10 percent but are now actually going to be at 15 percent, and, at that same time, our export and import businesses are going to be hit with yet another tax. It’s called a levy, but it is actually a tax, and—worse than that—as businesses, they won’t be able to actually forecast into the future what those costs are likely to be.

When you’re running a business and you have to actually look at your bottom line and you have very slim margins, and you get a possible levy where, in the legislation itself, there is no limit, it is actually a cost that says that it is without limitations. It will be charged on the importation and exportation of goods. It will be charged on shipments, on transshipments, and on the transportation of goods, and so this could even be the transportation of goods, because it doesn’t say that it’s only the domestic transportation of goods. It could be charged on the transportation of goods here, after they actually arrive in the country.

I have introduced an amendment that says that, in new section 414A(2) in clause 6, we should delete those two words “(without limitation)”. We should delete it. Why do we even have such expansive powers, and it’s actually given to the executive. The Minister of Customs, via Order in Council through Cabinet, can decide what this levy charge could be. It is, effectively, a broad taxation power delegated to the executive, via the Minister of Customs, that is creating a new charge with no specific dollar cap, and it is narrow in terms of its scope in the primary law.

The other concern that we have is the fact that this is actually not a confirmable instrument, and so the Minister can, by Order in Council, come up with a levy charge, and who knows how big this levy charge is going to be? But it’s actually not going to even come back to the House for us, as members of Parliament, to have a say on as to whether or not this levy is reasonable.

In fact, in one of the clauses here, it says this. The only safeguard that I can see—and the Minister can correct me if I’m wrong—in this bill is that the Minister can go and consult, but there is no definition about who the Minister should go and consult with and what is reasonable, and also it is up to the Minister, after she consults, as to whether or not the levy that she proposes is reasonable. It is really all up to her, and all of this is because it is going to be done by executive Order in Council and, as I say, it doesn’t even come back to the House of Parliament to confirm whether or not it is a reasonable levy. This is something that we should definitely interrogate further because this levy could apply to virtually any category of goods and it could apply to any transaction whatsoever, and there is no limitation on how much the cost is going to be.

My question to the Minister: why are such broad powers needed? Clause 6 hands the executive the sweeping ability to impose these levies without limitation. Would the Minister consider, for example, limiting the scope of the levy in law so that parliamentarians can set the outer boundaries on these charges?

Another question: how will the Minister ensure that Parliament retains oversight of this new taxation power, and, specifically, why are the levy orders not made confirmable instruments, requiring a House vote? Does the Minister agree that delegating taxation to regulations is a significant step that should involve greater democratic control?

Another question: who will be consulted before a levy is imposed? The bill requires no consultation, but there should be a commitment specifically to include SME representatives. The Minister should consult Māori and should consult with ethnic businesses, Pacific business networks, consumer advocates, and unions, particularly where it impacts on workers. How will the Minister determine what constitutes reasonable consultation, and will the consultation feedback be made public?

Cost recovery is something that when we are in Government, we do. However, cost recovery should be reasonable. Our industries and our small businesses should have a say about what is a reasonable levy. Having a levy-making power like this, which has no limits whatsoever, is outrageous. It is unreasonable and, can I say, it is not very democratic, either, to have an instrument that doesn’t come back to the House to be confirmed by members of Parliament.

I think it’s probably relevant at this point—sorry, I’ve got a cough, so I’ve got a cough drop in my mouth. As the Hon Jenny Salesa is a former Minister of Customs, I had assumed there was some sort of level of understanding, but if you read the legislation as it’s written, the “without limitation” is referring to the list of functions, not to the levy itself.

If we record what is said in the position, it’s new section 414A, “under subsection (3), to pay a levy to the chief executive in relation to the costs incurred by Customs in, or for the purpose of, performing a function under this Act, or any other legislation, relating to goods management, including (without limitation) costs incurred relating to”. The “without limitation” relates to the list of activities, and so it is talking about not limiting the activities listed. it’s not about the levy fee, it’s not about the levy; it’s about the list of activities—so it is not about that function.

I think it’s important to differentiate that a levy is not a tax, as you’ll be aware from the border-processing levy. It is a levy that is established on a cost recovery basis. As you know, Customs is operated on an activity-based costing model. Under the Estimates process, it is very clear that Customs cannot gain revenue from something. This is about recovering the cost from where the cost is incurred, and this is what we’re talking about here. A levy recovers the cost from payers who are provided a service or who create the risk of the need or activity. When we talk about fairness, a tax is applied to everybody; a levy is applied to someone who is creating that activity requirement. That is what we’re talking about.

This legislation is creating the mechanism under which we can establish levies. As you will have been through the process yourself around the border-processing levy, it is a negotiated, consulted process that goes through to ensure that those that are generating that cost are consulted in this process. There is a lot of transparency, a lot of engagement with those sectors. As you’ll be fully aware, Customs rely on this building a relationship with—we want to encourage trade, we want to encourage travel. Customs is very focused on ensuring that we optimise the opportunities, too.

I think that’s the key point here: we are creating a mechanism under which levies can be established. Levies are a much more relevant process, a much fairer process, because it is not applying a cost to everybody; it is applying a cost to those that generate that cost. I hope that answers the question.

Thank you, Mr Chair. I just want to make a quick contribution to ask a question around a point that the Hon Damien O’Connor raised in a speech in a previous section of the debate. It was the question around how a levy order would be applied to prohibited or prescribed goods. Is there precedent for that in legislation? Definitionally, if something is illegal, how could that be taxed? I’m curious to see what the nexus is between taxing something that’s not technically legal.

Yes, I thank the member for the question. I think I can clarify. Again, this is not about a tax; it’s about a levy. If we’re talking about prohibited goods and if there’s a cost incurred to respond to those prohibited goods, to deal with those prohibited goods, those that have generated the risk should be paying the levy or the cost for dealing with that prohibited good. It’s not taxing something; it is about the process under which levies can be applied. At this point, what we’ve been using as the example is the small goods, the packages, the Temu-type products that come through. We have a huge amount of packages that come through. That has increased significantly. The cost incurred for processing that has grown significantly. The Crown ends up paying to monitor and control and deal with those packages, because we don’t have a mechanism to apply levies to that process, and rather than taxing everyone, what we’re talking about is a process whereby, where those costs are being incurred, levies are applied to those who are generating that cost.

All of those areas are talking about applying a levy to where that activity is causing a cost. Nothing, again, in this legislation is actually establishing the levy. The levy will go through a secondary process, as has been mentioned, through an Order in Council, but that would go through a process of Cabinet approval, then it’s scrutinised through the Estimates process and the Budget, and there is a consultation process in order to achieve it. I think it’s really important to reference the fact that it’s important for Customs to build trade and maintain those positive relationships, so that’s what we’re trying to do.

Thank you, Mr Chair. Let me just follow up on my previous contribution. The Minister of Customs somehow denies what is written in the bill in black and white, so can I just read the clause out?

Clause 6, new section 414A, the subheading is: “Levies for recovering costs relating to goods management”. Subsection (1) states, “In this section, specified person means any person or class of person specified in a levy order made under subsection (3) as primarily responsible for paying a levy.”

Subsection (2): “Every specified person is liable, while there is a levy order in force under subsection (3), to pay a levy to the chief executive in relation to the costs incurred by Customs in, or for the purpose of, performing a function under this Act, or any other legislation, relating to goods management, including (without limitation) costs incurred relating to—(a) any of the following activities: (i) the importation or exportation of goods: (ii) the shipment, transhipment, or transport of goods: (b) any of the following goods: (i) prohibited goods: (ii) craft: (iii) other prescribed goods.”

The reason why I read that out is just so we’re clear what is actually in black and white, stated in this Customs (Levies and Other Matters) Amendment Bill. This cost recovery matter—as I said earlier on, we do agree with cost recovery in general, because there are cases where it is the right thing to do, but this delegation in this bill, Minister, is very open-ended, and the use of “without limitation” to define the scope of the costs recoverable means that the executive and the Minister gains wide discretion to decide what Customs costs to recover from small businesses. This could extend to border protection activities, and the reason why I say that is because, in new section 414A (2)(b), the very first bullet point of “any of the following goods:” to be covered is “prohibited goods:”.

Now, one of the main responsibilities of the Minister of Customs is to ensure that our borders are safe and secure. It is a public good for all of Aotearoa New Zealand that our borders are safe and secure and that we do not allow prohibited goods to come through the borders—that includes illicit drugs, it includes illegal guns, and includes many other prohibited goods.

My worry about the possible direction that is being taken with this bill is the possibility that private companies, small businesses, our traders, our exporters, our importers are, in the future—that this is the first step to, possibly, privatising Customs, because this Minister will, by Order in Council, be able to, without any limitations in terms of costs, charge any of these folks—and I don’t want to read out the list again. People can actually get the bill, it’s up online on the Parliament website, and they can read, in black and white, what the legislation says.

It is like Parliament being asked to approve a blank-cheque authority for future levies—the details of who pays, how much, and for what services will be set later by regulation. We are being asked to trust the Minister in respect of the regulations by Order in Council that she will regulate later. She will set them later in regulation—just trust her. Small businesses—no worries, trust the Minister. Whatever the levy charges will be, they will be reasonable somehow. Just trust this Minister. Who pays how much for what services she will charge? Just trust this Minister. That is, essentially, what MPs and parliamentarians are being asked, because it is not a confirmable instrument; it does not come back to the House for confirmation.

Yes, I’m sorry, I probably didn’t explain it particularly well. To reassure you, the “without limitation” refers to the functions—“performing a function under this Act, or any other legislation, relating to goods management, including, (without limitation)” the list below. What we’re saying is the “without limitation” relates to the functions. I’m not sure if I’ve got that clear still. As the member will be aware, I do not have the authority to create anything. This is a Cabinet process that requires Cabinet approval. I do not have the authority, and no Customs Minister would have the authority, to set a levy. The secondary regulation is a process that would be developed in consultation to develop. Therefore, we go through a Cabinet approval process before the levy is set, and that is a process that’s in existence now. All we’re doing is looking at a levy structure that allows levies to be applied for all of the activities that Customs do. I hope that answers the question.

Thank you, Mr Chair, and thank you in advance to the Minister of Customs for responses to my upcoming questions. I actually will just start with the first question around why the use of urgency for this particular bill. While I understand that the bill did proceed to select committee, having a truncated second-half process in my view doesn’t aid good lawmaking, doesn’t facilitate a true dialogue over the committee of the whole House or allow the Minister to truly consider amendments. I think that there are several that my colleague the Hon Jenny Salesa has proposed that deserve consideration.

I wanted to first make some comment on what we’re seeing happen with secondary legislation generally because it will be clear by now that this is the real issue that we have. Having sat as a member of the Regulations Review Committee in the past, it is becoming clear that we’re seeing a trend towards the creation of framework legislation where there is much more autonomy given to sole Ministers to make significant policy decisions. We’re seeing delegation through Order in Council for very significant, substantive policy decisions to be made, and that’s not just the case in this legislation. We also saw it in regards to FamilyBoost, which has recently come through the House under urgency, and the Rates Rebate Amendment Bill, which the Government also put through under urgency where they created what’s called the “Henry VIII” power that allows a Minister to alter legislation. We saw it also through adoption reform which allowed, through Order in Council, the list of countries to be adapted solely through a Minister’s recommendation.

Now, the Minister made a comment on this in terms of there being a process in place; the process is that the Minister recommends. There is a lot of power in that recommendation. As the Minister will know, the Governor-General doesn’t often not grant—or I struggle to recall a time when the Governor-General has not granted—that Order in Council on the basis of a ministerial discretion.

The point of my colleague in this case is that the Minister has selected the option that gives the Minister the most scope and the least oversight of this House in relation to this bill. Now, for any ordinary power that covered Justice or Foreign Affairs, that would be an issue. However, historically around the world, the concept not just of taxes but of levies as well has always been seen to be a power that sits most closely with Parliament. It sits most closely with Parliament and even in this House, there have historically been times when these sorts of powers are made, not by bringing new legislation to the House, but through resolution of the House, and then, that shifted into Orders in Council provisions. It got more loose, if you like, from those resolutions of the House into Orders in Council.

What we’re seeing here is a dramatic shift and a purposeful decision to pass this law, to make Orders in Council not subject to confirmation, the agreement of the House. That is the next step down because you can then have secondary legislation that operates, but the House still needs to consider it, and the Minister has purposefully decided not to do that. My colleague Jenny Salesa has raised that issue, but I just have noted that the Minister hasn’t yet responded to the intent behind why that option was taken, as opposed to going for, in my view, the more accountable option of having an Order in Council. We don’t object to Orders in Council, but I’m talking about ensuring that as much accountability can be given to the order, given the subject matter of this bill, which is a levy power. It is a very broad levy power and, hopefully, I can speak more to that in upcoming calls. But if the Minister could speak to that particular decision, that would be appreciated. Thank you.

I just think it’s worth clarifying, firstly, there is this existing system where we have fees applied and levies recovered. This is already a system in place; this is just about how we apply this. The scope of the costs that are recoverable are limited to those that are incurred by Customs in performing a legislative function relating to goods management. This is a limit that is built into the levy-making power. This isn’t just “We can apply a cost to anything.”; this is about costs that are generated by Customs and are performing a legislative function.

The other part that is worth highlighting is that Customs costs in relation to goods are already recovered by the fees set by secondary legislation. That secondary legislation system already exists. Levies just provide more flexibility and fairness than fees and having them set by secondary legislation is not an extraordinary function; it is not without precedent. I think it is, again, ignoring in this process that this isn’t a power bestowed on the Minister; it is a power bestowed on the Minister to take something to Cabinet, and for Cabinet to approve it before it goes to the Executive Council for sign-off.

Thank you very much, Madam Chair. I appreciate that the Minister of Customs has brought this legislation back to the House having had it scrutinised by the Foreign Affairs, Defence and Trade Committee. I guess there is an opportunity now to sit down once again, because we’re under urgency, to actually just check that what we’re doing here is appropriate.

I know my colleagues have asked a question around the words “(without limitation)”, in new section 414A, in clause 6. It wasn’t a big part of consideration at the select committee. On reflecting—and I appreciate the Minister’s response. But the wording of new section 414A(2), if you go through, is “or any other legislation, relating to goods management,”—right, so that’s what the levies are being set for—“including … costs incurred relating to”. That’s what it says, and then in brackets we’ve got “(without limitation)”. I’m no lawyer. We’ve got plenty of lawyers here—probably too many, but anyway—and so there might be some who can clarify that.

My reading of this is that—I’ll go back again, because these are genuine questions. “(2) Every specified person is liable, while there is a levy order enforced under subsection (3), to pay a levy to the chief executive in relation to the costs incurred by Customs in, or for the purpose of, performing a function under this Act,”—all right, so that’s the function—“or any other legislation, relating to goods management, including … costs incurred relating to”. Including costs. Then there’s a brackets in there, “(without limitation)”.

I guess the Minister’s explanation, I think, was that it didn’t restrict the kinds of costs that it would relate to, rather than the cost itself. I know, further down in here, and setting through the Order in Council, the Minister can recommend a rate of a levy and not specify it, of course, in the legislation, because there needs to be some flexibility, but I do need to check with the Minister about that “(without limitation)”. She said that relates to which particular activity, not to the cost of it. I’m sorry to ask the Minister to repeat. If she could clarify that, that would be really good, because I think anyone coming in like myself, who’s not a lawyer, would look through this and say, “Oh, hold on, there’s a bit of a danger here.”

The next area that I ask a question of the Minister is around a memorandum account, which is a standard part of—and I referred to it briefly in my other speech—a system of setting up an account where we’re not quite sure of the income from a charge or a levy, but there’s an agreement with industry that the Government’s not going to rort it for the consolidated account that actually will take the fee and the levy for the purposes for which it is legislated for.

I guess the question is—and, again, it’s not something that came up in the select committee. In clause 7, which is part of Part 1, “Section 415 amended (Trust accounts for levy money payable to chief executive)”—now, that may be referring to what is a memorandum account, but it’s not clear here. The question is: if it is there, that’s great, because that’s standard practice; if not, how do we know this is not just going to go back into the consolidated account? Actually, if you look at the standard practice of this incoming coalition Government, it does go to the consolidated account. The international visitor levy is taken off visitors coming into this country—$100 a person—and it goes straight into the Minister of Finance’s slush fund. It does not go back to—[Interruption] With very little, in fact. The money that the Minister for Tourism and Hospitality has given out has come from our international visitor levy fund—I don’t think it’s all been spent—and the $100 charge, as I understand, is just going straight into the—

No, you’re not right. Go check your facts.

The Minister can take a call and explain that. I suspect—and I know the early payments from that fund, where the conditions were that it go back into tourism, have still been allocated out. In fact, the Minister of Finance now is the beneficiary of the $100 per visitor levy.

Can I come back to the point? I don’t want to get off track, Madam Chair, of course. But the questions around that—

I wasn’t taking it as being off track; actually, I was taking it as using another example to try and explain the example that you were talking about.

Thank you very much. That is it, indeed. I come back to clause 7 to say: does that relate to a memorandum account or an equivalent? Does that have the normal safeguards that industry normally seeks from Government to ensure that this is not just a tax; that, in fact, it’s a fee or a levy for the genuine purposes of cost recovery? We support cost recovery, but we are not going to, in Government, at the end of next year, impose unnecessary costs, but as we have worked through, we have sought cost recovery. So the question to the Minister is: can she give us an absolute assurance that it’s only cost recovery, and will that memorandum account process be the one that is used? Thank you.

I thank the member. Yes, it is a memorandum accounting model. Again, this is the mechanism stuff. We’re talking about the mechanism to create the levy. If you apply it to the border-processing levy, for example—because we have an activity-based costing model—it’s very clear that we cannot use the recovery of processing passengers through the airport to offset package processing and that sort of thing. It is rationalised over a three-year period, so the levies are set in a three-year advance model, which is what we’ve just gone through recently to reset those levies. If we have overestimated, then there’s a reduction in the levy moving forward because we’ve recovered too much, and if we’ve underestimated, there’ll be an increase in the levies. That’s the same. That is that memorandum account model, to assure you.

Just going back to the—I think it’s about where we put the brackets of the “(without limitation)”. It’s saying “including (without limitation) costs incurred”; it’s not saying, “costs without limitation”. It’s including the functions. It’s trying not to limit the functions. It’s trying to say that these are the functions to which we may incur costs, but “without limitation” means there may be other things for which there’s a legislative requirement for us to recover costs. That’s what the earlier part of it says—it’s for “performing a function under this Act, or any other legislation,” in which goods management incurs a cost. That’s that cost recovery discussion you have. The “without limitation” isn’t referring to the cost without limitation; it’s referring to the list of functions below. We’re not limiting the list of those functions as there may be other ones for which there may be a cost, for good management, that could come under this.

Thank you, Madam Chair. To the Minister of Custom’s point, might the Minister be clear to the Chamber, then, about what some of those other ones might be, to help us understand where she’s going with this? I appreciate that in respect of “(without limitation)”, she talks to it, saying, “any of the following activities”. Might she help us by providing what some of those instances might be that fall under the scope of “(without limitation)”‘? As I take the point made by my colleague the Hon Damien O’Connor, it was a piece of work called the Legislation Design and Advisory Committee—I think it was in 2021—that actually covers off these matters around tax, levy, and fee.

We’ve got to get this language really crystal clear for us here, because if we look towards what the Minister’s saying, which is a levy, it’s got to—at least from my reading of that particular recommendation and in order to make sure that what we’re doing here is sound and makes reasonable sense, but also is passed democratically—answer two questions. The first one is the terms of empowering provisions. That’s the first question that has to be answered—the terms of empowering provisions—and I accept that in this particular bill, in this particular clause, it sets out to do that, but for the purposes of this debate around “(without limitation)”, there is clearly still some confusion here. Whether it’s been lost in translation or whether or not we haven’t quite got it right and we’re not connecting here, I think it’s still important that we get that particular question answered.

The other part, which is in respect to what the Hon Damien O’Connor was saying, is that in secondary legislation, we’ve got to make sure that the appropriate circumstances for secondary legislation are used—the appropriate circumstances. I’m afraid that with language like “(without limitation)” and some of the other matters that we see here, as raised by my colleagues in respect to new section 414A(4), inserted by clause 6, “The Minister must, before recommending that a levy order be made under this section”—it goes on and the Minister knows what those words are. Are we satisfied, then, that the appropriate circumstances for secondary legislation are being met here? While I accept that in some instances it might be, but we’re talking about something quite considerable here, something that will impact large groups of society in our communities. We’re talking about small to medium enterprises, as highlighted by my colleague the Hon Jenny Salesa.

In order for those to be answered, perhaps, then, coming back to the Supplementary Order Papers by my—are they still called SOPs?

Amendment Papers. Some of us have been around for a while. We still call them SOPs from time to time.

Amendment Papers. Sorry, yeah, showing our age. Sorry, Madam Chair. Perhaps it might be advisable to the Minister, then, that because of this confusion, we just simply take out that “(without limitation)” as proposed by the amendment tabled by my colleague the Hon Jenny Salesa.

Those are the questions that I do have for the Minister. Are the terms of empowering provisions—is the Minister satisfied, then, that it’s covered off within this particular bill? The second part is the appropriate circumstances for the use of secondary legislation. We’re talking about the Order in Council matter here. The questions have already been asked by my colleague the Hon Jenny Salesa, and we want to be very clear about who they must consult with and whether or not there’s enough transparency there to give us any form of comfort, to make sure that this is going in the right direction.

Then, just finally, coming back to my first question: can the Minister give us any examples—any examples—that would fall under the remit of “(without limitation)”?

I’ll try to work through these. I suppose, when you talk about if you take out “(without limitation)” from this piece, we end up with having to ensure that this list is fully exhaustive. Therefore, because we’ve talked about other legislation, because Customs is in the position—there may be levies that Customs would be asked to collect on behalf of other agencies and this is the part where we’re trying to ensure that we have the ability to collect levies as they arrive from other legislation.

Some of those activities that may relate to the process of goods management, which is what we’re talking about here—so some of the examples that have been put forward is a risk assessment process, and we are really reliant on understanding risk on products before they arrive to us. That is one of the components. Ship rummaging, offshore intelligence gathering—those sorts of functions that are functions that occur because of the goods management process. Again, it’s about this idea that the person generating the cost, or the entity generating that cost or that liability to New Zealanders should be responsible for that fee. So this is about alternatives to taxing to cover everything—those that generate the cost—and I think it’s that fairness process that we’re talking about. If you are generating the risk to New Zealand or you’re generating the cost, then you should be incurring the levy around that.

The other part I’d like to talk about is the levy-setting process and the consultation process. If we look at where we had gone through some processes with levy setting—we’ve done it recently around order processing—we need from a “New Zealand Inc.” point of view and from Customs’ point of view, we need those that are generating the cost to want to work with us. Customs, as you know, we collect revenue. We contribute to the economy. Customs is a function that we want activity, we want trade, and we want people travelling here. So that’s why the consultation process is really important to ensure that we are not turning trade away. If you go back to the customs and excise legislation, the reason that this exists, the purpose of Customs is trade, border security, and travel. We want to make sure that all of those functions are—we’re motivated to generate it so it’s not about incurring liability. That consultation process is very engaged through that process.

Thank you, Madam Chair. I want to thank the Minister of Customs for that, but she raises an interesting point—and, as I say, we are supportive of the cost recovery, as well—but the Minister has left the door open for other agencies that might go out and say, “Look, we’ve got a cost that we’ve incurred.” It might be the Ministry for Primary Industries, it might be somewhere else, biosecurity, or it might be relating to the Police, and they’re checking on these things. We don’t want to leave an open cheque-book here. The Minister of Customs is in a really difficult situation; she has to front the charges or the costs, but if, as she suggested, this allows the flexibility for other costs incurred through other agencies to then come through customs and be imposed on someone who’s importing or exporting, then that’s quite a huge impost.

I need to know—or the Minister, actually, needs to know, too—that other agencies can’t front up and just say, “Look, we’ve got this cost. It cost us a couple of million dollars for these people who are importing this product, and you’ve got the ability now, Minister, to charge for that—so, please, can you do that?” Then you come under pressure at Cabinet, where some more senior Minister who’s got an agency that has gone out and necessarily, perhaps, or not necessarily; who knows.

So it’s the checks and balances. But what she’s explaining, I think, is that any kind of cost recovery levy or management practice can be, in fact, funnelled through this levy-making process. Now, that itself is—as I say—a bit of a risk, it’s a bit of pressure on the Minister, and maybe she can explain how the checks and balances before those other agencies go out and do that work need to be in place, as well. Otherwise, they say, “A $2 million cost—it’s been incurred, we can show you invoices. We want you to go and recover that from those importers.”—and that could be quite unfair. The Minister needs to have appropriate safeguards.

The second thing I’ll just ask—and, again, it comes back to when the Minister explained that it’s a “model” of the memorandum account, but she didn’t say it’s a memorandum account. Now, I can’t recall the specific safeguards around the memorandum account. My recollection is that with those go some requirements for review and some requirements for no additional or overcharging. Does the model include the safeguards—and, in fact, they may be the sections referred to in clause 7, and maybe the Minister can answer that and say “Yes, there are the same safeguards as we get in any other memorandum account, be it biosecurity or some other one, and, in fact, the references through clause 7 and the subsections in there are, indeed, the ones referring to the safeguards.” Two questions for the Minister, really.

Yeah, so the memorandum accounts are audited. They are audited by the New Zealand auditors, so they are audited. We have the performance bands and also, we report on it through the performance band process.

The other component you’ve talked about around the—this legislation only enables Customs to incur costs that they incur. We haven’t touched on it yet but the product stewardship thing—if there is a system by which Customs is going to be collecting a levy, or collecting a fee, this is about the costs that Customs incurs. The only thing this applies to is the costs that Customs incurs. All we are collecting is the levy as it applies to what costs that Customs incurs.

If we are acting on another agent, all we are talking about is the costs that Customs incur; the levy is about Customs recovering its costs. Again, it’s about that logical discussion around we don’t have an agency that is doing a whole lot of work for a whole lot of people, and we’re just going to charge everybody; this is about specifically the things that Customs is required—and again going back, this is about goods management.

Thank you, Madam Chair, and I appreciate the Minister of Customs. I read through this again. Again, I’m not a lawyer, but new section 414A(2), in clause 6, does say, as she quite rightfully points to, “to pay a levy to the chief executive in relation to the costs incurred by Customs”—so it’s by the agency—“in, or for the purpose of, performing a function under this Act,”—so it’s under this Act, the Customs and Excise Act—“or any other legislation”.

The question is: does the other legislation refer to other parts of the importation process or does it just come back to Customs? The wording—and I’ll read it carefully, because that might be just my misunderstanding—is “(2) Every specified person is liable, while there is a levy order in force under subsection (3), to pay a levy to the chief executive in relation to the costs incurred by Customs in, or for the purpose of, performing a function under this Act,”—which would relate to Customs or this one—“or any other legislation, relating to goods management”. I accept the Minister’s explanation on the “(without limitation)”.

Maybe, just a clarification on what may be my misunderstanding that, actually, another piece of legislation imposing a cost could then be channelled through Customs in the repayment system.

I suppose the logical one is the Misuse of Drugs Act. We stop drugs on behalf of the misuse-of-drugs legislation, which incurs a cost to Customs because we do that on behalf of another agency. It’s another piece of legislation that Customs incurs a cost to do, so that’s that function that you’re talking about.

I’m going to take a call from the Hon Jenny Salesa. I think we’ve pretty much exhausted that particular topic, and so if there’s any other related questions—the Hon Jenny Salesa.

Thank you, Madam Chair. Thank you for giving me this opportunity to ask a question, and I will go to a different clause.

My questions are about clause 4, which amends section 5 of the Customs and Excise Act 2018 by adding references to new section 414A and new section 414B in the definition of “prescribed”. Now, technically, this ensures that any regulations or Orders in Council made under the new levy section is recognised as prescribed matters under the Act. In practice, this is consequential to integrating the new levy regime into the Act’s new terminology. Our concern is actually not with the drafting per se, which is standard, but rather what this section facilitates because it gives the legal effect to the levy order that can be imposed, potentially, including significant costs on stakeholders and small-business owners without returning to the House of Parliament, because, as we discussed earlier on, this is not a confirmable instrument. Once this bill is passed into law, it doesn’t actually come back to the House for us to have any say about any of the costs, the levies, whether or not it is fair or reasonable for our small businesses.

Clause 4, by plugging the new sections into the Act’s definition of “prescribed”, makes it so that the levy powers that follow are something that are able to be implemented. As we see from—and I go back now to section 414A, in clause 6, and to subsection (3)—the Governor-General is the person who actually gives the levy power. That is true. However, any Orders in Council cannot actually be implemented until the Minister—and, in this case, it is the Minister of Customs and her department—actually drafts up the Order in Council. Then the levy is prescribed and according to the legislation, to the bill we have in front of us, it includes the rate of the levy, the basis on which that rate is to be calculated and ascertained.

Even though the Minister, in one of her answers much earlier on, said that she doesn’t actually have the power to make a levy, I suppose that is possibly technically true. However, this Order in Council, which will have the levy, none of that could happen until the Minister takes an Order in Council paper to Cabinet for Cabinet to approve. She actually does have that power, and this bill, in doing this, delegates that lawmaking power to set levy details over to the executive when the Minister takes that Order in Council to Cabinet. This is actually one of the reasons why we have major reservations about Part 1.

My questions to the Minister are: can the Minister confirm that clause 4 expands the definition of “craft” or relevant terms so that any levy can cover aircraft as well as ships, thereby ending the current cross-subsidy where goods fees have been partly funding ship-related costs? How will the Minister ensure that a fairer distribution of border costs between aviation and maritime sectors occur in the future as a result of this new bill?

Another question: does clause 4 or any part of this whole bill explicitly classify the new levies as duty under the Customs Act; if so, how will this assist, if at all, in enforcement and collection; if not, what legal mechanism ensures that unpaid levies can be collected or that goods can be held until levy obligations are satisfied?

A further question about the levy, to the Minister: is she going to consider ring-fencing this levy so that, following up on a question that the Hon Damien O’Connor had before, it actually just stays within Customs because this levy is being collected for Customs?

Yeah, there’s a few there. First of all, the cost recovery processes: we’ve talked about memorandum accounts—and the member the Hon Jenny Salesa was a former Minister and should understand the process around memorandum accounts. There’s a guidance around best - practice cost recovery from the Auditor-General. Levy funding goes into a memorandum account that shouldn’t be in deficit or surplus. A strong activity-based costing model at Customs is recognised. It’s reviewed regularly and reported in the annual reports that are delivered to the House, so there is an assurance that there is no way it is being used—and the member will know full well about how that process works.

I think the other component that we’ve talked a bit about—I think that answers the ring-fencing component. We’ve got to be very careful here that we’re not conflating—the member talked a lot about ships and aeroplanes and the costs. That is the border-processing levy, that system exists, it’s been fully traversed. This bill relates to goods management, not border processing, so we’re talking about the cost incurred with border processing. In relation to the Minister’s power to do these things—again, as the member knows, the Parliamentary Counsel Office drafts the levy orders, they follow through policy work that is carried out by Customs, which is then taken to Cabinet for approval. There is, again, a robust process that is in place around how those levies are established. The bill doesn’t amend the definition of “craft”.

Going back to the first point, the member talked about prescribed, and prescribed by regulations. This amendment, which was referred to in clause 4, is a technical amendment to support consistent definitions across the Customs and Excise Act. The definitions section in the Customs and Excise Act, section 5, defines “prescribed” throughout the Act as meaning “prescribed by regulations”. The two new sections inserted by the bill, sections 414A and 414B, relate to levy orders, not regulations. Therefore, “prescribed” should not mean “prescribed by regulations” in relation to those sections. That is why that clarification is there. Thank you.

I feel like I’ve got a burning question from Vanushi Walters.

Thank you, Madam Chair, and thank you to the Minister of Customs for answering some of the questions thus far. My first question is in relation to whether the Minister received advice in terms of how this would impact complaints on the scope of levies made. At present, if there is a sense that a levy has been made outside the scope of primary legislation, an individual could potentially argue that it’s ultra vires; they could make a complaint to the Regulations Review Committee. This is really why the advice from many quarters, including the Office of the Auditor-General (OAG), is to have those powers quite specific in terms of what you’re intending to cover. Would there be any unintended consequences in terms of excluding a complaint because it was deemed to be within the scope of very broadly drafted discretionary powers, when the Minister’s intent is for it to be drawn down more closely?

The Minister just then referred to border processing, and so I wonder whether there are examples of language that the Minister has contemplated which could draw down those powers in the way in which the Minister does intend, but also not without that unintended effect of limiting the ability of those complaints to be very validly brought to fora such as the Regulations Review Committee, and then instruments to be disallowed should they be outside the scope of the Minister’s and the Government’s intent.

My other question was in relation to new section 414B, “Contents of good management levy order”, and this in clause 6 of the bill, where there are powers of exemption, so powers to exempt certain persons or classes of persons from the requirement to pay the levy and, also, provide the circumstances in which the levy paid may be refunded. The first half of my question is whether the Minister considered putting some caveats around when that can occur—and I’m pleased the Minister referred to the OAG’s advice, which I also have here. The Regulations Review Committee has also commented on the drafting of secondary legislation, and often, across both sets, there are comments about the value of being specific when powers are created, but also when exemption powers are created—was that considered?

Part B of that question would cross-reference to new section 414A(1), which talks about the person primarily responsible for paying a levy as the person who’s liable. That is a determination, of course, on fact, and my question is whether the Minister and officials have thought through risks in terms of conflicts of interest and how they would be managed, and decision making in terms of exemptions or payback of levies, and identifying precisely who the primary person responsible for paying a levy is versus a person who may benefit from an exemption or a payback. For example, if a company exists or if entities are held within trust, there could be multiple individuals who may have an existing conflict who would benefit from an exemption who wouldn’t be identified as the person primarily responsible. Yes, those are my three questions for now.

I move, That debate on this question now close.

The question is that the Hon Jenny Salesa’s tabled amendment to clause 6 new section 414A(2) deleting “(without limitation)” be agreed to.

The question is that the Hon Jenny Salesa’s tabled amendment to clause 6 new section 414A(2)(b) deleting subparagraph (i) “prohibited goods” be agreed to.

The question is that the Hon Jenny Salesa’s tabled amendment to clause 6 new section 414A inserting new subsection (7) be agreed to.

Members, we come now to Part 2. Part 2 is the debate on clauses 12 to 15, “Amendments to the Waste Minimisation Act 2008”. The question is that Part 2 stand part.

Thank you, Madam Chair. I just want to take a quick call on this topic. This is something that the Greens are quite passionate about around the Waste Minimisation Act. My question is around whether there are any safeguards that would prevent the fees that are enabled to be collected by this legislation from being spent outside of product stewardship? We do know that there have already been changes to the Waste Minimisation Act that have dehypothecated it. So, earlier last year, the Government changed it so that the levies collected under the Waste Minimisation Act could be spent on not just waste minimisation things but on remediating landfills, for example. Is there anything in this legislation which could potentially stop or prevent that? That would be obviously quite concerning to us.

Thank you, Madam Chair. Part 2 amends the Waste Minimisation Act 2008 to improve how the product stewardship fees are collected for certain goods. I have a few questions for the Minister. Which product stewardship schemes does she anticipate that the Customs Service’s fee for collection will do once this bill is passed—for example, is she considering, say, having the tyre-recycling fee under the Tyrewise ready to be collected at the border by Customs, and, if she is, does she have a timeline for that?

The second question: how will she ensure that Customs, in collecting these fees, improves the compliance rates and reduces the administrative costs, and does the Minister have estimates of increased collection, in dollars or percentages, due to the change that this bill has?

My last question is: will all the fees collected by Customs under this part of the bill be transferred to the appropriate environmental fund in full—in other words, can the public be assured that the levies she is collecting are ring-fenced for environmental purposes, and not mingled with other general revenue?

Thank you very much, Madam Chair. I’m actually quite surprised that this is in any piece of legislation from this Government, because I thought they’d just about get rid of every stewardship fee. But anyway, it’s nice to see it here—nice to see it here. The one issue raised by my colleague Hon Jenny Salesa is the one around tyres, of course. We know that is a nightmare, and there has been a fee put on. The proposal, of course, is to make it more efficient and bring it under Customs. I have to say, I acknowledge Customs staff are passionate people who do an incredible job to protect our country from illicit drugs and things that are unwanted, and now they’ll have to be responsible for tyres that we do want—well, but we want to deal with them properly. This does bring into question the enthusiasm from Customs for this.

There may be other stewardship fees on things like unwanted plastic containers, where there is a real cost of recycling. There should be a fee on it, to ensure that anyone who produces it is then responsible for recycling. The next one would be lithium batteries, I’d suggest. This is a new and emerging area.

I guess the question to the Minister of Customs is: can she give us an assurance that, actually, the Government is committed to product stewardship fees? We assume that she is, but it’d be nice to hear that. What new stewardship fees are being proposed? Indeed, as I say, the evolution of our economy and technology means that there will be, if the principles of product stewardship fees are continued. Maybe the Minister can clarify that: the principles of user-pays around recycling or dealing with some products. We still have a lot of chemicals coming into our system that, if not dealt with properly, can become quite a cost, often to councils. This is proposing that for efficiency, Customs will collect that.

Indeed, the challenge and the responsibility will only get larger, I’d suggest—well, it probably will under responsible Government; if the coalition is to be responsible in this area, then that will increase. The Minister should, then, ensure that the cost of this within the Customs system will be covered, not just the issue of dealing with the product itself or the waste minimisation—which I think is an objective of each and every one of us. A couple of questions there for the Minister that I’d appreciate a comment on. Thank you.

Just first, the assurance that the fees collected have to be used for the purpose that was collected—so this is a product stewardship fee; it has to be used for that function.

In terms of the amounts, there is commercial sensitivity in the dollar amounts and it would vary on a case by case basis. Again, just to clarify: this is just setting up a mechanism under which Customs could collect the fees. It’s not an action driven by Customs around waste management or waste product stewardship. It’s just a mechanism under which Customs could now—there was a temporary arrangement set up in about March last year to allow Customs to assist with the collection of levies as part of the border processing of these goods. This is about tidying this up.

Yes: absolutely committed to future product stewardship. That’s why we think it should be in this legislation without defining—it’s just about setting up the mechanism, because, logically, it is an opportunity for Customs because we see the goods coming in and out. It would logically be an easier process. Customs does collect fees on behalf of other agencies.

Thank you, very much, Madam Chair. I understand that in 2020 when we were—of course we were in Government then, there were six priority products—

Dark days.

The good old days, yeah. There were six—

You even caused the pandemic.

Thank God we were in charge. There are tens of thousands of New Zealanders who are alive now because we were in charge.

Can I come back, Madam Chair—I never deviate.

You certainly can. You certainly can—it’s clear the debate’s not over.

“Please, keep it tight.”—yes, keep it tight. There were six priority products to be subject to product stewardship schemes, and I acknowledge the Government brought one in for tyres. Maybe, the Minister could give us an indication of whether the other five products are still in the process and whether, because of the new, efficient system that will be now put in place under Customs, whether that will be fast tracked into this new scheme, so there’d be five other products. Maybe, the Minister can give us an indication on that.

The information I’ve received in terms of schemes that are in the pipeline includes tyres, electronics, and farm plastics. Those are some of the indications of the things in the pipeline. Just in terms of that cost, at the moment, if Customs was chosen to collect a product stewardship fee, it would be regulatorily efficient to use an existing revenue-collection system. That would reduce the cost, if it was using an existing collection system. The Government has decided that that would reduce compliance costs, if we were using an existing framework of collection fees, so that’s part of it in terms of what’s in the pipeline. Again, this isn’t Customs work; it’s just that we’re just setting it up, but what I’m informed of is that farm plastics, electronics, and tyres are in the pipeline.

The question is—

Madam Chair?

Does the member want to take a call? I was beginning a vote.

That’s all right, sorry.

Members, the time has come to suspend the House for the dinner break. Just remember that we are on a shortened dinner break tonight due to urgency. When we come back, we will be on to Part 3 of this bill.

Good evening, members. When we suspended for the dinner break, we were just about to start Part 3. Part 3 is the debate on clauses 16 and 17, Goods and Services Tax Act 1985. The question is that Part 3 stand part.

Madam Chair, thank you for the call. I would like to ask the Minister of Customs questions in terms of Part 3, which amends the Goods and Services Tax Act of 1985 and it is supposed to have refunds that are fairer for people who return imported goods.

There are two main changes that I can see that Part 3 does. It extends the time frame for GST refund claims so that importers, including those who are individuals consumers who import goods, will now have up to 12 months to re-export those goods and claim a GST refund, instead of the current very short window of two months. My question for the Minister is: why was the original GST refund window only two months, and does she or her Customs Service officials have evidence that drove the decision to extend it to 12 months?

I have a few more questions. How will consumers and businesses learn about this new term of entitlement under which they can return their goods? What will Customs do to ensure that consumers know that this is what they have an entitlement to do now under this new bill? Next question: will Customs or Inland Revenue be doing an information campaign so that people actually know that they can claim back the GST on returned imports—because there’s not much point in making the rule fairer if those who are supposed to be benefiting from it are unaware that the rules have changed.

I wanted just to let the Minister know that we are in support of this part, just as we were in support of Part 2 of this bill. The final question for this part is: what is the process for claiming the GST refund under the new rules? Will it be automatic, or will people still need to fill out a form?

I’d just like to take a call because I think it’s one of these emerging challenges across regulation and governance that we kind of have to keep up with. The idea of kind of importing something and then sending it back overseas and then getting something replaced just kind of was beyond comprehension probably even 10 years ago, five years ago, but such is the commercial world now that people are buying a lot more online.

The Foreign Affairs, Defence and Trade Committee looked at this and basically saw it as a logical step forward, but I think the questions that the Hon Jenny Salesa asked are ones that the Minister of Customs, hopefully, will answer. It was seen by most people on the select committee as a logical step for a technical glitch to make sure that people don’t—and it might only be $50, it might be a relatively low-value item, but none the less, if they end up paying twice in GST, then it’s not very smart. We just request of the Minister some answers to the questions that the Hon Jenny Salesa put up. Thank you.

You’re asking a question of the Minister to answer the question of the former—

Madam Chair, that’s an excellent, excellent summary. Just in case the Minister didn’t hear the first time.

Just for my notes. I’d just like to get it correct.

Actually, Ministers don’t always answer the question in this House, I’ve noticed.

Yeah, so, firstly, just to pride and assurance, the process of reviewing and granting refunds will be robust. It normally requires submission of supporting information such as showing a record of the export to ensure that the refund is appropriate. From a communications standpoint, Customs or Inland Revenue will inform using the normal release processes which goes out to all the trades—the communication process—as well as updating websites to inform trades, etc. There’s the process when you’re exporting the goods, there’s an information connection through Customs as well, so I’m confident that there is.

Just in answer to the two months only previously, so as most trade was within New Zealand, this was not a bigger issue previously. Now, there is a lot more purchasing from overseas directly by individuals as well as that process. I think the 12 months is more aligning to that warranty period, so that equates to that.

I just have a few more questions of the Minister. For items that are under $1,000 that overseas sellers charge the New Zealand GST when the item is put up on sale, if such an item is returned, does the customer get the GST back from the seller or would they now get it from Customs, because of this new bill?

Second question: we would like clarity on ensuring that no one pays GST twice or pays GST unnecessarily under the various import scenarios. Would it be Customs that would deal with this issue, or would the customers go to IRD?

Lastly, are there any protections against—

These are frivolous questions—frivolous!

The member on the other side of the House is most welcome to get up and contribute and ask his questions in the normal way, because this is why we are having this committee stage. It is open to every single member of Parliament to take five minutes, take a call, ask as many questions as you like instead of just making a lot of noise from the other side and actually making it harder for us to ask our questions.

Lastly, Minister, are there any protections against abuse of this refund system—for instance, what is to stop someone from importing and then exporting to claim GST back in a fraudulent way?

Just in answer to the last part, which is what I alluded to, this was discussed in the Foreign Affairs, Defence and Trade Committee. It was addressed in my answer previously about Customs providing assurance around the process, the review, and the provision of documentation at the export stage. If a person is purchasing something from a shop and returning it to a shop, the transaction is between the seller and the purchaser within New Zealand, so this GST component isn’t required. You’re returning a good to the shop and the shop is refunding you or giving you a store credit or whatever they do. That’s out of the scope of this discussion. The other part that’s out of scope is anything under $1,000. This doesn’t apply to that.

Thank you, Madam Chair. Thank you to the Minister of Customs for answering these extremely important questions that we have, especially given we’re here under urgency.

My question is in relation to clause 17 (1AB). I’ll just read part of that out so we know where we are. It says, “Goods and services tax is not payable under subsection (1) for any goods if the chief executive of the New Zealand Customs Service is satisfied that, at the time of importation or entry for home consumption under the Customs and Excise Act 2018 (the current importation),” which is the totality of the clause, “(a) goods and services tax has been paid on the importation or entry for home consumption of the goods or substantially the same goods on another occasion (the original importation) before the current importation;”

My question on that part is whether there was a consideration of applying any timing restrictions in terms of the original importation and the time between the original importation and the current importation. My interest in this is also because of paragraph (c), where it says, “the goods of the current importation are goods that are the replacement, repair, or refurbishment of the original importation goods under a written warranty or a written returns policy.” You might consider a circumstance where you had an original importation of goods and then several months later, perhaps more than a year after the fact, you would have a refurbishment of goods, to a different standard perhaps, of adding potentially a significant amount of value to the goods in question.

The question is in two parts. One was the consideration of limiting the period between the two for that section. The second is in terms of looking at refurbishment in particular, or even replacement, if you consider. Was there thought given to replacement or refurbishment where the value of the item might increase, or decrease, for that matter, in a substantial way, and, if so, how the treatment of GST ought to apply in those circumstances? Thank you.

That time frame relates to where there’s a written guarantee, so it’s the period of the written guarantee.

I have just a couple of questions here, and I think there was a question about people perhaps fraudulently using this provision and saying that goods are faulty and then getting a replacement, and then, in fact, some importer is getting two for the price of one and getting an exemption on GST. But there is a legitimate issue here for some people who are sending it over from, say, the US or elsewhere in the world, which is that when they send it over, the cost of sending it back may be such that they’re just prepared to send on another replacement. Now, I don’t know whether that happens very often, but I know that depending on the value of the goods, that might be the best option. There could be a loophole here.

The question for the Minister is: have they checked that the export of those goods, which is required to get the GST refund, or to have an exemption on the second one—I think it’s a perfectly reasonable proposition and requirement, but is there an ability for someone to front and say, “Look, the person I bought it off says, ‘Just dump it, and I’ll send you another one.’, because that may be the cheapest option for them.”? I ask whether there is provision for that in there, and the Minister might be able to clarify.

The second one is the emerging situation of tariffs, of course, and we’ve had New Zealand Post not export items such as this into the US, because there were clear, I guess, calculations of whether they would be subject to the tariff, who should pay the tariff, etc., and whether the GST is then calculated on it, and it won’t be a tariff from there. But if there is a good going back into the US that has come out of the US, will it be tariff-free if it goes back in?

These are, I’d say, technical questions. They might seem like crazy situations, but, actually, with the world that we’re in at the moment, if we’re tidying this up—I know that the Foreign Affairs, Defence and Trade Committee didn’t have the opportunity to have a look at this. Tariffs weren’t on the table, necessarily, but it could be one of the complications, and maybe the Minister has an idea of whether the officials have looked at this in recent days or weeks to see whether this might change the provisions needed in this piece of legislation.

I think the key point here is that we’re talking about goods over $1,000. The issues that we’ve had about those packages being stopped in the States is relating to the small goods stuff, which is the challenge we’re working through at the moment. So this is all relating to over $1,000.

Just to one of the earlier questions about if it was modified and it was more value than it was, then it’s not deemed to be a replacement. I think it’s important to note that when the process under which we’re dealing, if it was going to be disposed of, the process of verifying this and providing the information—and this is what Customs talked about: the robust processes to ensure there’s evidence of destruction or evidence of disposal; those sort of components. It’s not a huge issue, but it is generally of significant items that we’re talking about when we’re talking, and you all know it’s that machinery-type components, which is expensive pieces of equipment. This is what we’re trying to deal with in this space.

Members, we come now to the final debate, which is clauses 1 and 2—“Title” and “Commencement”.

Mr Speaker, the committee has considered the Customs (Levies and Other Matters) Amendment Bill and reports it without amendment. I move, That the report be adopted.

The Customs (Levies and Other Matters) Amendment Bill is set down for third reading immediately.

I move, That the Customs (Levies and Other Matters) Amendment Bill be now read a third time.

This bill aims to improve revenue collection on goods by making collection fairer and more effective and supporting regulatory efficiency. It does these things by amending three existing Acts. Part 1 amends the Customs and Excise Act 2018, Part 2 amends the Waste Minimisation Act 2008, and Part 3 amends the Goods and Services Tax Act 1985 and the Customs and Excise Act 2018.

The amendments in this omnibus bill make small but important improvements to three existing revenue-collection regimes: Customs’ cost recovery charges, product stewardship fees, and goods and services tax. These types of revenue are all either currently defined as duties under the Customs and Excise Act or will be able to be defined as duties or treated as if they are duties once the bill’s amendments are in place.

The primary aim of the bill is to introduce a levy-making power so that levies can be made as an alternative to existing fee charges to recover Customs costs related to its goods management functions, including vessels. Levies are more appropriate than fees when costs are spread across a class of payers and there is not necessarily a direct line of sight between the costs and the payers. Customs’ goods management system supports trade and protects New Zealand. Trade is reliant on a small, efficient, and secure border that protects the legitimate flow of trade. The costs of Customs services and integrated goods management system, including the management of vessels, are best recovered from classes of levy payers that create the risks and costs.

This bill is enabling legislation. The primary legislation changes for Part 1 and Part 2 of the bill will require regulations of Orders in Council to implement the changes; the Goods and Services Tax Act changes in Part 3 do not. The bill amends the Customs and Excise Act to add a provision that empowers the Governor-General, by Order in Council, on the recommendation of the Minister of Customs, to make a levy order. Such a levy order would prescribe a levy that funds costs incurred by Customs in or for the purpose of performing a function under the Customs and Excise Act or other legislation relating to goods management. Later this year, in addition to the levy order, I will also be submitting secondary legislation that will include amendments to existing Customs and Excise Act regulations to reflect goods and vessel cost recovery policy decisions made by Cabinet.

Part 2 amends the Waste Minimisation Act to clarify that the Governor-General, by Order in Council, on the recommendation of the Minister for the Environment, may make regulations to specify persons that will collect funds to fund product stewardship. Future product stewardship schemes could use these provisions to provide for effective cost recovery of the product stewardship fees by agencies such as Customs. These would need to be provided for in regulations associated with those schemes.

Part 3 amends the Goods and Services Tax Act to ensure that imported goods valued over $1,000 receive the same GST treatment as other goods by broadening the criteria under which an importer can get a GST refund for returned goods.

The bill was referred to the Foreign Affairs, Defence and Trade Committee, which considered several public submissions on the draft bill. I would like to thank the select committee for its valuable consideration of the bill; in particular, they provided scrutiny of the proposed changes to GST refunds and sought confirmation that effective safeguards are in place to avoid fraudulent claims.

To summarise: this bill will modernise Customs’ cost recovery empowering provisions in the Customs and Excise Act and allow for the recovery of costs for Customs’ goods management functions through levies. This approach supports a more robust and balanced outcome. In addition, the bill makes changes to support the efficient future collection of product stewardship fees by other agencies such as Customs and makes GST refunds fairer. Again, I thank the Foreign Affairs, Defence and Trade Committee for its considered work and to those who took the time to provide submissions on the bill. I look forward to the passage of the bill. I commend the bill to the House.

Kia ora e te Pīka. Ngā mihi nui e Te Wiki o te Reo Māori. I’m honoured to give a speech on the Customs (Levies and Other Matters) Amendment Bill as spokesperson for Customs for the Labour Party.

On the face of it, this omnibus bill, which deals with three different Acts—the Customs and Excise Act 2018, Waste Minimisation Act 2008, and the Goods and Services Tax Act 1985—appears to be a reasonable measure that is proposing to modernise and improve how we collect revenue on goods, as we heard the Minister describe. The Government has repeatedly assured us that this bill is about improving the system, and it doesn’t change or increase rates or existing charges or introduce new charges.

At first reading, Labour approached this bill in good faith, supporting its referral to the Foreign Affairs, Defence and Trade Committee in the hopes that these measures would indeed deliver fairness without any unintended consequences. We supported the bill, as well, at the second reading. Right throughout the committee of the whole House, we were hopeful that some of the amendments that we tabled would be taken on board. However, as we have examined the bill in detail, especially Part 1 of the bill which overhauls the Customs and Excise Act, it has become alarmingly clear that the bill takes an unusual and, unfortunately, an alarming turn. After careful analysis of this bill, Labour can no longer support this bill in its current form.

Part 1 of this legislation is really problematic to us, and we prepared the Amendment Papers to try and fix the worst flaws. Our concern is that unless the bill is amended, Part 1 hands the executive a blank cheque with sweeping powers to impose new levies without any adequate checks. This bill does this in a way that threatens both fairness and accountability. Labour refuses to stand by and allow such an overreach to proceed unchecked. This is a bill that is not a confirmable instrument—and that was one of the Amendment Papers that we tabled—so that it will come back to the House for members of Parliament to have a say.

Part 1 of the bill grants the Minister of Customs authority to create an entirely new levy regime via regulations by Order in Council, by inserting new section 414A into the Customs and Excise Act. On paper, the idea of cost recovery or spreading border management costs across a class of importers rather than individual fees may seem fair. Indeed, using levies for cost recovery can be appropriate in some cases, and it is not unprecedented. This is something that we ourselves have done, but not in the way that this bill does, which is deeply concerning. Under the new section 414A, the Government could impose levies on virtually any person or any business involved in importing or exporting goods. The scope is astonishingly broad and ill defined. The Minister may call it “cost recovery”, but let’s not sugarcoat it.

This is, effectively, a new taxation power to allow the Government to target an undefined group of people for an undefined range of services and to charge them an undefined amount in levies, all without returning to Parliament for oversight or approval. One particularly concerning clause in Part 1 which exemplifies this overreach is new section 414A(2). As currently drafted, in clause 6 of the bill, it explicitly states that Customs may recover costs “without limitation”. In other words, the power to levy charges would be without limit, unrestrained, and indefinite. The phrasing is no mere technicality; it is an open cheque, because even at its most basic principle of lawmaking, writing the words “without limitation” into taxing power is extraordinary and, quite frankly, outrageous. No Government agency should ever be told that it can extract money from the public without limit.

This Parliament should not grant an open-ended authority to levy potentially hefty charges on our businesses and our consumers. Labour tabled an amendment to delete the words “without limitation” from clause 6, new section 414A(2). Those two words might seem small, but removing them is absolutely vital to rein in the bill’s sweeping scope. If the Government truly does not intend to create limitless charges, they should have no objection to striking that language out. Keeping it in law would send a signal that Customs’ powers to tax through levies knows no bounds. Not only is the scope of the levy power too broad but there is no robust check on the balance or its use. Under this bill, levy orders would be made by Order in Council, effectively regulating regulations decided by Cabinet, without needing further approval by Parliament.

Once this bill is passed, executive could bring in new hire levies at any time and members of this House would have no say beyond the blunt instrument of disallowing a regulation. That is simply not good enough when we are talking about charges that are, in all but name, a form of tax on the public. Historically, Parliament has been very careful when delegating taxation-like powers. Often, statutes imposing levies include provisions to ensure ongoing parliamentary oversight. In fact, many Acts in New Zealand require levy regulations to be treated as confirmable instruments, meaning any levy imposed by regulation must later be confirmed by Parliament to remain in force. This is a sensible safeguard that upholds the principle of no taxation without representation in our modern legislative framework. Yet this Customs amendment bill contains no such safeguard.

Actually, it omits any requirement for parliamentary confirmation of the new levies. Essentially, this bill asks us to trust the Minister of Customs entirely, to trust that she will only ever set reasonable levies, never abuse the words “without limitations” authority, and somehow always achieve fairness with no further input from the House. That is not how democracy is meant to work. Labour believes that if the Government truly intends these levies to be fair and limited, they should welcome transparency and oversight. Labour’s proposed amendment is not radical; it is common sense and in line with longstanding constitutional practice. I urge the Government to accept that amendment.

Beyond these constitutional principles, let us talk about the real-world impacts of this bill. Who will bear the brunt when the Minister unleashes these new levies under this law? The Government argues about fairness, spreading border management costs more evenly—but fairness for whom, exactly? From where we stand, it looks like these levies will not hit everyone equally; in fact, they are likely to hit small and medium sized businesses the hardest, along with ordinary New Zealanders who ultimately purchase imported goods. Make no mistake, these costs will be passed down the line. When an importer faces a new levy, they will try to recoup it somehow, usually by increasing prices for consumers. Ultimately, everyday people are likely to pay.

Labour has withdrawn its support for this bill in its current form precisely because we stand on the side of fairness and accountability. It is really cynical to try and say that scrutiny is not something that Parliament should continue to have. Having these costs, these new levies, without limitation, charging it to importation of exportation of goods, charging it to shipment, transshipment, and transportation of goods—actually, the other worry that we have is the fact that prohibited goods is one of the things that this bill basically says that should be charged a levy. Prohibited goods is usually one of those main responsibilities of the Minister of Customs, because the Minister of Customs is tasked with ensuring that our borders are safe and secure. Having prohibited goods not come through our borders is basically a public good. It should not be paid for by a levy that is charged to private companies and our importers and exporters. We do not commend this bill to the House.

The question is that the motion be agreed to.

Thank you, Madam Speaker. I rise in continued support of this bill from the Green Party of Aotearoa New Zealand. While we do share some of the concerns that have been articulated by Labour members in the previous stage of the committee and by previous speaker Jenny Salesa, we do think that the potential good that this bill could do outweighs some of the potential cons that it could impose. I was a little bit assured during the dialogue in the committee of the whole House stage that the “without limitations” clause basically just referred to the subsequent subclauses that are referred to in the legislation. That being said, if this bill does confer as sweeping of powers as our Labour colleagues do suggest that it does, then we’re looking forward to bidding for the customs portfolio in the negotiations for the next Government.

I want to talk a little bit about Part 2, which is one of the main reasons we’re supporting this bill. Part 2 is the section of the bill that amends the Waste Minimisation Act. The purpose of this is to enable priority product stewardship. I guess I want to talk about why this is really important by drawing on some of my past work in the past life where I was the waste lead at the Climate Change Commission. Now, one of the things that we were looking at there is the issue of refrigerants and controlling refrigerants, and one of the ways that you can actually ensure that you’re having some level of control over refrigerants—and refrigerants are the things that act as coolants and heat pumps and air conditioners, that kind of thing—and they need to be dealt with at the border.

Really? It’s bad for the environment.

Yeah, they’re bad for the environment—absolutely. They’re actually really potent—really potent in a global warming sense. That’s why one of the policy recommendations that we had that we talked to officials on and we talked to the community on when I was at the Climate Change Commission was to ensure product stewardship legislation for refrigerants. It really makes sense to have Customs as the body that actually, literally deals with the import of goods at the border—to have that be the agency that administers the product stewardship scheme. That’s why we think that this legislation is a really positive step forward. Notwithstanding ignoring the concerns that our Labour colleagues have articulated, our view is that this does make it a little bit worth it.

But we’re not supporting this bill with a kind of notion of naivety. We do know that the Minister has provided some assurance during the committee of the whole House stage that this Government does not intend for the product stewardship fees to be used as general parts of the revenue. But we do know that, sadly, during their term in Government, they have used things that have similar structures to fees or levies and then broadened them out for a general purpose. For example, one of the first things that this Government did when they came into power was to change it so that the revenue from the emissions trading scheme no longer went to the Climate Change Response Fund, which was a big loss, in my view, because the Climate Change Response Fund was a fund that was set up to fund not only climate change mitigation but also climate change adaptation measures.

The loss of that was one of the things that the Government first did when they came into office. This is why I’m a little bit sceptical when the Minister does provide reassurances like that; it doesn’t seem to accord with, sadly, the record of this Government. One of the other things that they did just right at the start of my term as a parliamentarian, actually, was to change the Waste Minimisation Act. This bill also makes changes to the Waste Minimisation Act, but they changed the Waste Minimisation Act at the start of last year to de-hypothecate the Waste Minimisation Fund and broaden the scope for that.

Now, that’s significant because, as set up, the Waste Minimisation Fund was supposed to use the waste levy and fund it and use the money to fund purely waste reduction initiatives with the objective of making New Zealand a zero-waste country. I do take on board the Minister’s feedback that this Government does not intend to use the ability to set fees through the priority product security and use it on other things, like general things—for example, subsidies to fossil fuel companies. That would be a very bad thing to do, in my book. Sadly, you know, we do have to treat the Minister’s claim with a little bit of scepticism. That’s why, while we are supporting the legislation in Part 2, and while we are supporting the overall thrust of this legislation, we are coming into it with eyes wide open.

I want to turn to Part 3 of the bill, and Part 3 is also something that potentially supports the objectives of waste minimisation in quite an indirect way. I’ll explain why it’s quite indirect, because it doesn’t directly—it’s not like the previous section, which directly amends the Waste Minimisation Act. The way that Part 3 does this is that currently, when you send goods overseas to be repaired, there’s the potential that when they come back, you’re potentially having to be paying twice for that. This legislation makes the changes so that if you pay for a good once and then you pay the GST on it and then it breaks for whatever reason and then you send it overseas and it comes back, you’re not paying a double fee for that, which isn’t really conducive to the idea of having an economy—a circular economy.

I mean, we know that certain members opposite don’t like the word “circular economy”, but that does support the objective of a circular economy, which is one of the things that is necessary to shift New Zealand into a cleaner, greener, and zero-waste future. We do have other things that, you know, while this bill will only play a very small part in enabling better repairability of goods and services in New Zealand—I don’t want to over-egg the pudding too much; it’s not going to be like a very, very big role—it is good step in the right direction, of being able to ensure that that we’re lowering the barriers for people to be able to repair products.

I mean, it’s a shame that my colleague the Hon Marama Davidson’s Consumer Guarantees (Right to Repair) Amendment Bill is not being—

Well done. You’ve only got two more minutes. You can make it!

Yeah, two more minutes—carried on by this. Well, it hasn’t actually come to the House yet; there’s a potential that the members opposite might come to a road to Damascus moment. We’re certainly hoping that they do, and we’re certainly hoping that the objectives of this, which is to enhance repairability, does carry on to the wider programme of this Government, including supporting the right to repair legislation of the Hon Marama Davidson, because shifting to repairability is right and this bill does help enhance that slightly. It’s a really good way that we can reduce waste.

Now, finally, with only around one minute left to go, I really want to turn my attention and really make sure to thank the people who are staffing the border at customs. I mean, I think like many New Zealanders who’ve had to travel or return overseas, I was struck by the professionalism and the integrity and just how quickly you can actually go through the border these days. I think that part of this legislation is actually enabling cost recovery to support the good work of the men, women, and non-binary staff right at the front lines of customs.

With about just 15 seconds left—well, 12 seconds left of my time now—I do want to issue a note on process. I really don’t think we needed to use urgency to pass this legislation, but if we’re going to use urgency, we’re going to drag it on for as long as possible.

Thank you, Madam Speaker. I rise in support of this bill and ACT’s position. Look, I find it kind of ironic that the Labour Party, despite supporting this bill entirely, decided to pull the pin last minute, raising, actually, some fairly good points, but it leads me to the question of the Foreign Affairs, Defence and Trade Committee. We’re a great select committee—and I’ve got some of my colleagues over here—and these points could have been discussed and they weren’t raised with us. I think the members on that side may have just done their homework tonight and got a speech written by ChatGPT, but these are serious concerns. Maybe if the members want to engage with us on some of these matters, they should look at doing that via the select committee in the future.

I think this bill’s really sensible and makes it nice and easy. Being able to get your GST back on refunds on products over $1,000 that you import, that’s really sensible and that’s a good step forward. I commend this bill to the House.

Thank you, Madam Speaker. It’s a pleasure to take this call here in the final reading. I appreciate the support of the Green Party—even with some mixed metaphors there—but we’ll take that support. That’s the way the cookie bounces! Ultimately, this is a good piece of legislation, despite the scaremongering from the Labour Party, which, actually, was not raised at any point during the select committee consideration. I’m not sure where it’s come from now, other than perhaps a misguided interpretation of this bill. Actually, we saw them concerned for the first time about the potential of increased tax. It’s a very un - Labour Party thing. I was surprised to hear that coming from the member. Rest assured that that, indeed, is not a risk under this legislation. These are pragmatic changes that bring efficiency and, ultimately, will improve delivery, the hallmark of this Government.

I rise on behalf of the Green Party to speak at the third reading of the Customs (Levies and Other Matters) Amendment Bill. Now, I did read the title because in the second reading there was a bit of confusion as to whether I was talking about the right bill—so just clarifying that, absolutely, product stewardship and waste minimisation is a really important part of this bill. For the Greens, the most important part of this bill is the product stewardship and the progress it makes on waste minimisation. This is a kaupapa that is part of our whakapapa.

The Waste Minimisation Act 2008 began its life as a Green Party member’s bill and was championed by former Green MP Nándor Tánczos, who is running currently for Mayor of Whakatāne. The Hon Eugenie Sage, when she was the Associate Minister for the Environment, did amazing things with products stewardship, bringing in six priority products including things like tyres and e-waste. I was actually on the e-waste products stewardship working group when I worked at Para Kore and then went on to work at the Ministry for the Environment, so I know how massive our waste problem is and how big the waste department at the Ministry for the Environment is.

There are some really amazing solutions happening out in the communities and product stewardship is one of those really exciting things. This bill carries that kaupapa forward. The Waste Minimisation Act 2008 was the first time Aotearoa recognised that responsibility for waste must be shared with producers and importers, not just by households, councils, and, ultimately, Papatūānuku—our Mother Earth.

By enabling the changes to the Customs and Excise Act 2018, the Waste Minimisation Act 2008, and the Goods and Services Tax Act 1985, this bill closes a crucial gap. It makes sure that when tyres, electronics, or packaging come into the country, the cost of dealing with those products at the end of their life are not simply dumped on whānau, communities, and into Papatūānuku that she cannot digest.

This is about shifting the responsibility upstream to those that design and profit from products. Now, a great example of this is in the EU, in Belgium, where Apple changed their chargers to USBCs in line with regulation to reduce that e-waste. Now, you might not have known why the iPhones now have that C charger, but it was because laws can put the onus on producers to create products that reduce e-waste and waste in general. Every step in this direction is a win for our communities, for our councils, and for Papatūānuku.

This bill also makes GST rules fairer for repaired and replaced goods. I want to shout out to my colleagues here Ricardo Menéndez March and the Hon Marama Davidson for their work on the right-to-repair bill—which I actually helped with before I was an MP. This is something that is core to our beliefs as the Greens. It is that belief that we should honour. When we extract something from the Earth, we should honour it; we shouldn’t just produce it into something, consume it, and then throw it away—a straight line all the way to the rubbish dump. What we need to do is move back into circular systems. That means making sure that producers are responsible for the products that they make at the end of their life. We are so far behind the rest of the world on this. I mean, you only have to look at European nations to see that we really, really need to catch up.

People are making conscious decisions to reduce their carbon footprints, but the throwaway system—that linear system that we live in—does not allow them to do this. The technical changes like this can help us move towards a system of sustainability. The Green Party is proud to support this bill, even though it is a small step and there is so much further we need to go. Thank you, Madam Speaker.

I never thought I’d say this but I’m looking forward to hearing from the Hon Peeni Henare in a minute, I would assume. The last Labour Party’s “Penny”—“Henny Penny” thought the sky was falling with this bill. It’s ridiculous.

It’s a great bill. It’s about a Government getting on with the business of running a country, going for growth so that we can make life more affordable and deliver more opportunities for Kiwi families. I commend it to the House.

That member’s in luck, and I can guarantee that member that my speech will be longer than his tie!

Madam Speaker, I thank you for the opportunity to speak on this bill and want to reiterate a few points that I thought my colleague the Hon Jenny Salesa spelled out quite clearly in the House, and I want to touch on a number of those points.

One of the terms that I didn’t hear from the Minister throughout the entirety of the process of this bill in the House was something that I think would actually resonate with the community out there, which is “fiscally neutral”. We kept hearing from the Minister how this is designed so that it can be a cost recovery, so that we’re literally paying for the management system that will look after the management of goods at the border. But what we didn’t hear was that it would be fiscally neutral. I think that’s one of those terms that is really important when we look towards whether it’s a tax or a levy, something that’s being explained to the people as simply being cost recovery for the management of goods at the border should be something that’s fiscally neutral. Something that tells New Zealanders, tells small to medium sized enterprise business owners that actually they’re getting good value, they’re getting an efficient service, they’re making sure that when they’re looking towards importing goods here into this country and exporting—in a case which I’ll touch on very shortly—that it is fiscally neutral and gives the public the reassurance that those systems are in place to protect our borders.

I’ve just returned from Papua New Guinea where they celebrated the 50th year of independence. One of the matters that was raised with myself in the discussions in and around the functions and the ceremonies that I attended from the Pacific Islands were the challenges of transnational crime—and the fact that we need to make sure we have strong borders, and, for the most part, we do a good job. The New Zealand public want to know that whenever we’re looking towards taxing or putting a levy on something, that those costs will go to something that will make sure that things like our borders are protected, that transnational crime is something that’s taken seriously—and for the most part it is. But what we need to do is make sure we take the public on this journey. There are still some unanswered questions, and one of those is from the Minister on whether or not there will be a fiscally neutral pathway forward on this particular bill.

The amendments to the bill that were proposed by my colleague, I thought were, at least, reasonable. I’ve heard members from the other side of the House say that it should have been raised in the Foreign Affairs, Defence and Trade Committee. Well, that’s why we still have the committee of the whole House. That’s why we have that opportunity, so that we can bring these matters once again, after hearing from submitters, after going through the processes of the bill, we can still make a bill better. That’s the point I want to leave on members of that side of the House. The reason we don’t have that opportunity is because this bill’s being pushed through under urgency, and now we find ourselves going through all stages of the bill. That’s the challenge that we put in front of the Government and also the public out there, who I’m sure will have some very clear and strong views and some expectations when we look towards the passing of this bill.

I want to acknowledge my colleague the Hon Damien O’Connor, who spoke to the amendments to the Waste Minimisation Act, which is amended in Part 2, and I think they’re really good. They do ask some questions though, and I want to acknowledge the comments of my colleague the Hon Damien O’Connor, who actually had thought that this Government had given up on any green initiative in this country, and now, all of a sudden, we’re trying to make amends. We’ve heard the term “road to Damascus” several times during question time, and I think that might be one of those opportunities to use the same phrase to say it is about time that the Government under its leadership looks towards parts like the amendment to the Waste Minimisation Act—something that says “To those that provide products, there must be some kind of recourse or some kind of pathway that shows that we can make sure that our environment is looked after into the future.” I think the example of the charger, the universal charger for Apple iPhones, is a really good example of that.

I do think that there were some questions about today’s and tomorrow’s technologies which I wonder will have to come up through secondary legislation or at least be defined more clearly in the bill. One of those was lithium batteries, and we know with electric vehicle cars and all that, there are concerns about the way that lithium battery is disposed of, etc., and I think those are all questions that New Zealanders have on their minds. When we look towards anything to do with the Waste Minimisation Act and the way that we might present ourselves as a progressive country, I think those are some serious things that we all have to consider as a House of Parliament and as representatives of the people.

I mentioned in my contribution in the second reading and in the committee of the whole House, the Legislation Design and Advisory Committee of 2021 and the recommendations that they make around ensuring that good legislation and good process is undertaken to make sure that we have good and strong and robust legislation. I made the points earlier about some of the questions that, from their perspective, needed to be answered in order to ensure that we aren’t simply using this House to impose taxes, which is why there is a separate pathway for very clear taxations. Then there is another pathway which talks about levies. It does make a distinction between the two, which I think is important, but also it speaks to the kinds of questions that the House needs to ask itself if it’s going to do either one of those two. Some of those questions, I think, are quite reasonable and quite simple.

The terms of empowering provisions is the first one, and whether or not the appropriate circumstances for secondary legislation are in place. I’m sure some of my colleagues in their contributions to the House this evening can talk towards how secondary legislation is important and can’t simply be seen as a process whereby we can have efficiencies. We heard from members on the other side of the House on how this is making things more efficient. While we are all for efficiencies, when it comes to matters like this, the Legislation Design and Advisory Committee made it clear that secondary legislation had to make sure that there were appropriate circumstances in place in order for those to happen. Otherwise, what we see is an erosion of democracy. What we see is the power being put into the hands of a few, and that’s not what we want in this country. I’m sure the public can make an argument that, actually, they’re not being heard in this case because we acknowledged during the process of this bill that this bill affects quite a large number of people in our community.

Some of the other questions that they asked and need to be answered to make sure that our legislation is good and robust, are things like the costs. What we’re saying here is the cost of providing the service and whether or not it’s relative to the income that’s being taken in. While there were some assurances from the Minister, I come back to my point about fiscal neutrality and making sure that it’s clear to the New Zealand public that what’s actually being taken in is reasonable and covers the costs of the service to take that money in or to levy that particular service. That’s important because otherwise what is often the case is the perception in the public and in the community is, once again, that this Government is using underhanded tactics to continue to tax or levy communities.

Those are questions coming from the community, and while members on the other side might not like those questions, they are real questions. The other one is: who do the changes apply to? Who do the changes apply to? I think there is some really good questions put forward by my colleagues on this side of the House about not just small to medium enterprises and the changing nature of the way that New Zealanders purchase their goods online, etc., and the origin of purchase or the origin of certainly the company selling as opposed to the distribution point. I’m not an expert on the matters, but I do shop online, and I know others in this House do. We’ve got to ask questions about where that comes from. Do these matters apply to those who are selling? Are those companies offshore or are they companies here in New Zealand? The Minister made a point about the threshold being at $1,000. Well, that’s quite clear to me, but still, these are the questions that need to be answered to make sure that we have robust law.

Why is that important? Because, ultimately, it comes down to a constitutional matter. Constitutional matters that say this is the House of the people, this is the House that represents the views of the people, and the more and more I’ve seen over my 11 years here in Parliament is that often there are attempts to make sure that the power rests in the hands of the few. That can’t continue. If we want to make sure that this House continues to represent our country today and into the future, we’ve got to make sure that democratic processes are strong, robust, and sound.

On that matter—in the last five seconds—we won’t be supporting this bill. We’ve tried to make it better. Sadly, we couldn’t.

Look, I’m pleased to stand and take a call on the Customs (Levies and Other Matters) Amendment Bill in this, the third reading. I do find it extraordinary that many of the questions raised were not asked in the select committee process by the other side. I think that is the place where they should have been asked, and if they weren’t, then that is something that could be addressed by them in the future.

This is a levy regime. It’s more appropriate and best practice when costs are to be spread fairly. It’s a good bill and it helps us to make collection fairer and more effective. We need to be faster as a country. We need to be more effective and more efficient, and this will do that. As a result, I commend it to the House.

Tēnā koe e te Mana Whakawā. Look, this is an exemplar for lazy lawmaking. It’s just sloppy.

Lazy homework!

Yeah, because I’ve had a good look at this piece of legislation, and a good starting point is the regulatory impact statement. A good regulatory impact statement steps through the policy problem, puts forward a range of options, and measures them against each other on a number of fronts. It’s not easy, but it’s good policy work. I’ll be honest: I feel for the officials who might look at this, but this is one of the worst regulatory impact statements I’ve ever seen. I mean, the options it has presented are to do nothing—the status quo—or to do what the Minister says. There is no challenging, there’s no testing, and there’s no going forward and saying “What other ways are there to address the problem?”, because the problem here is that the current fees regime isn’t working quite right.

When you import goods and, for example, they have to be inspected and there’s a cost to that inspection, that is a classic example of where a fee should be charged, because we know what the job is and we know what it costs. But that’s all a bit too hard—they don’t want to explore how to improve that framework; they want a levy system.

Now, a levy system is used where it is impossible to differentiate who bears the benefit of any particular piece of work. A good example is marketing by produce boards like Zespri and the levy for kiwifruit owners: you can’t charge a fee for the marketing for any given orchardist; or there is border protection against Mycoplasma bovis: you can’t say “This work benefited that farmer.” That’s where a levy is suitable. That is what a levy is for—to spread the costs across a population of people who benefit from a particular Government activity—but this isn’t it.

That’s why this is lazy lawmaking. There has been no genuine exploration of what the best fix for this fees regime is, and we do have real concerns that what this really is is a money-grab, because we know that that Government over there has put up Government fees across the board. A good chunk of the inflation in our economy is being driven by increasing costs in Government sectors. Whether it be car registrations, fuel taxes, court fees, or whatever it might be, that’s administered inflation, and they’re administering it. Here we have another opportunity where the Government is grabbing unto itself the ability to impose more cost that, ultimately, New Zealand consumers will bear, without there being any accountability to this House.

Jenny Salesa had her amendment on the Table that said that if you’re going to do that, make it confirmable. Make it so that it has to come back to this House and say that we approve that legislation, and then we can examine it. At least the Minister would have to front up and answer the question as to how it was justifiable.

Now, I’m concerned that these levies will be put through without the appropriate consultation. There was no consultation on this bill before it came to the House, and that’s shocking. This directly affects importers, exporters, and consumers, and yet the regulatory impact statement is quite up front and says, “No, we didn’t do any consultation. We’ll do that when we impose the levy.” That is sloppy and it’s lazy, and, quite frankly, from a Government department, which is, in fact, our oldest—the Customs Service, I think, if I might have this right, is our oldest Government department—I expect more.

That’s not good lawmaking from Customs, and I’m really concerned that what we have here is a situation where the Government is like “Oh, I can’t really be bothered doing the work to charge fair and accurate fees. Let’s just have a blanket levy. It’s so much easier, and”—as my friend and colleague Peeni Henare said—“we can be a little looser about it. It doesn’t have to be cost-neutral. We can make a little bit on the side. We can have a bit of an uplift there, as well.” That’s not good lawmaking; in fact, it’s unconstitutional.

A levy, as the Legislation Design and Advisory Committee says, should only recover the cost it needs, and that’s not what this bill does. It’s bad lawmaking, it’s going to increase costs, it’s bad for importers, it’s bad for consumers, and—most importantly—it’s bad for New Zealanders. We will not support this bill.

Thank you, Madam Speaker. It’s a pleasure to take a call on the Customs (Levies and Other Matters) Amendment Bill. It’s a useful piece of legislation, and I commend the bill to the House.

Madam—Madam Speaker?

Are you sure?

Yes, Madam Speaker.

The Hon Damien O’Connor.

I wouldn’t miss it for quids. Thank you, Madam Speaker. No, look, it’s a privilege to get up and speak on this bill, a piece of legislation that has been through the Foreign Affairs, Defence and Trade Committee, but things have moved on a little bit—things have changed, and I guess we have every reason in the Opposition to just scrutinise the legislation one more time. There have been some excellent speeches from my colleagues who, rightfully, have pointed to a number of concerns. I have to acknowledge the Minister who stood up and answered most of the questions that we had.

I want to thank her for that, but she is still part of a coalition Government that has actually increased fees wherever they can and taken as much money from people as they can back into the consolidated fund to pay for tax cuts. It’s as simple as that: increasing vehicle registration fees back into the consolidated fund, increasing the international visitor levy from $35 to $100 into the consolidated fund. Indeed, we’ve moved away from it, and we, in Government, of course had a philosophy—and it’s been one that has been generally accepted across the parties—of user-pays. I think that’s a fair way to go. We don’t want taxpayers money subsidising particular areas. We’ll assist when necessary, but not subsidising areas of the economy.

When it comes to import and exports, then those people who are moving goods should pay, and this is what this bill is about. It’s designed to, I guess, update and modernise the legislation, but what it does do is shift from a process in Parliament of oversight to a process with the Minister, where there are obligations to consult but they are not that robust, and we say they are at risk of being abused by a Minister who just decides to cover costs and a bit more, as my colleague previously said. Indeed, this goes on all the time.

There is a memorandum account or a structure like that, we are told, and that will be reviewed and audited. So, you know, there are some checks and balances, but, as I say, in an environment of suspicion because of other pieces of legislation that have either been rushed through—indeed, we’re in urgency, so we have every reason to be a little bit suspicious—or designed, as I say, to shift costs often from industry on to taxpayers or ratepayers; in this case, people who are importing and exporting things. This is a core part of our economy, and we need to make sure that we’re not kind of lumping them with additional costs.

The reality of these changes—from submitters and from our observation—is this will likely shift more cost on to small and medium enterprises. At a time when the Government says it’s wanting to kind of boost the economy, they are at the heart of our economy. So it is possible, because of the new systems that Customs might impose upon them for payment, that it might indeed increase or it’s likely to increase their costs. That’s certainly what all of them said when they came to the select committee.

But, hopefully, it might make the collection process a little more simple, given that it’s through Customs. They have a track record of collecting fees through alcohol and through imports, and so they have the capability to do it. Do they have the resources? In fact, it was very rarely raised or spoken of in the Minister’s reply here to questions that we asked. We see across all areas of Government service that the squeeze is on. All those agencies have been asked to claw money back and put it back to pay for tax cuts, and that has come at considerable cost and, we say, risk. We’ll just see what that delivers over time.

The second part, Part 2 of the bill is the Waste Minimisation Act amendments, and where there is an ability to, I guess, take a product stewardship fee. In Government, we had proposed six of these fees. One of them has been implemented for tyres. We had an assurance from the Minister that the others will be progressing. We shall hold our breath and hope that they do come through because the one for tyres was indeed a charge on tyres that helps with the disposal and the processing of them.

There are many other areas, as was spoken of, of course—that might be plastics, it might be batteries that we’re seeing more of across the economy. It is important that the Waste Minimisation Act amendments that pass through this piece of legislation do work effectively. Again, concern from small to medium sized enterprises that this is going to be an administrative cost on them when the Government says they’re getting out of the way of business and letting them get on with it. Well, this is not the situation here, so let’s just talk about the reality.

The third part of the legislation is GST amendments for imported goods, and it’s a slightly complex, technical issue around goods that someone might purchase for over $1,000 from offshore, bring into the country, and then find that they are faulty, send them back out, and then the replacement goods incur another GST charge, and so this bill will allow that to be offset.

In summary—and I won’t go on and take the full time—it is important that pieces of legislation passed through this House in urgency are given the full scrutiny, are tested by the Opposition. Otherwise, we end up with—and, actually, even with full process—faulty legislation because the reality is that the world moves very, very quickly and moves on. We struggle to keep up with innovation through regulation, and so when you kind of do stuff like this in a rushed manner, the chances are that you might make some mistakes.

Labour sees the general value of this, but we do have some questions around, I guess, the potential and the temptation for the Government of the day—that is, the coalition Government—to screw more money out of importers and exporters through the Customs (Levies and Other Matters) Amendment Bill. We, in Opposition and when we’re in Government next year, will make sure that this is a very fair process for all of those people who are engaged in small to medium sized enterprises and in enterprises across our country. It’s a pleasure to speak and, as I say, to keep the Government honest in a very important area of our economy.

I rise in support, in this third reading, of the Customs (Levies and Other Matters) Amendment Bill. Of course, a lot has been said about this bill in the previous readings. We’ve had some of the Green Party members say that they’re just filibustering, even though they support it. I don’t think there’s much more to say on this bill. I commend it to the House.

Thank you, Madam Speaker, for the opportunity to take the final call in this important debate. We are in urgency, and we find ourselves here considering a Government introducing a boundless taxation ability for a Government department. We are back to the 1980s where New Zealand will be governed by a capricious and voracious executive Government and someone in the deep bowels of the bureaucracy will decide what New Zealanders pay for their consumer goods and their alcohol and their cigarettes—somebody who is not accountable to them. It won’t be the member for Northland sitting there. He’s a local representative. He gets down to the pub, talks to his constituents, and works hard—it’s not him. He won’t be responsible for these new levies and their very tax-like powers. Laura McClure, who is accountable to her constituents and works hard as a list MP, won’t be accountable for these decisions. No. It’ll be someone somewhere at an office deciding what to levy next.

That is the proposal in this bill, a boundless power that will be used at the whim of Customs to introduce some sort of levy, and we don’t know what it will be. It might say that these might be cost recovery related. We might hear from the Minister that these are intended to be fiscally neutral. If that was the intention in the legislation, perhaps the legislation would say that. Perhaps it would be in the law that the intention of this would be to spread costs more fairly or to present them in a fiscally neutral way. That is not what the provisions say. The provisions allow an open-ended levy-making power on goods coming into New Zealand.

Let’s just think about that. Let’s think about a Government that is proud of its record on intervening in the supply side of things, like housing and the cost of living, making more things available, making the crisis of affordability something that families can get through because they’ve intervened on the supply side and made more things available. This does the exact opposite.

I hear the contributions of the ACT Party members in this House worried about the Labour Party members now raising this with them. Is it because, if they had had this pointed out to them, they would have realised that this is completely at odds with their ideology? We have an ACT Party here who has gleefully voted for a boundaryless taxation power where nobody knows what New Zealanders will be charged. Now, they raise with us, the Labour Party members, that we did not ask these questions in front of them adequately. That is what a committee stage is for. Page 493 of McGee is the place where members on that side were confused about the role of the committee of the whole House, especially in urgency. They might like to refer to it about how these questions are raised and how amendments by our spokesperson for Customs, the Hon Jenny Salesa, would be put to solve this problem in a way that is cross-partisan and in a way that you might expect for a piece of legislation like this, which is serious and will cost New Zealanders tens, hundreds and, in some cases, thousands of dollars a year.

We might be able to agree in a cross-partisan way, at the committee stage, that there should be an amendment to at least look back at the function of these levies—as democratically elected representatives, as hard-working members of Parliament who go down to the pub and talk to people about how these things are affecting them. But, no, the Government voted that down. The Government has actively voted against any accountability for these levy-making powers, which are extremely tax-like in nature.

I ask the ACT Party members: what if this was on the other foot? What if the left had come to the House today and introduced a bill to introduce a random tax that could be levered by a Government department? There would be outrage on the other side. We would have decrying that we were going back to a system of executive Government that we have well passed.

Just in this House tonight, we had the Rt Hon Sir Geoffrey Palmer up on the podium talking about the need for more cross-partisanship around this style of executive Government. He has been a great advocate for regulation being a real worry for New Zealanders that we need to deal with and that there is goodwill to continue to deal with in this term, because of this interest from people around the world in supply side economics and the need to get rid of unnecessary barriers and tricky fees like this, which are built into our economy and which are costing people more. Families in New Zealand know it. Under this Government, administrative inflation has hit a 30-year high at 10.8 percent. This will do it more. This will make it worse. This will make it harder for working families.

I declare the House in committee for consideration of the Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Bill.

Members, the House is in committee on the Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Bill. Members, we start with Part 1. This is the debate on clauses 4 to 16A, “Restrictions on registration as participant (forestry conversions)”. The question is that Part 1 stand part.

The Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Bill amends the Climate Change Response Act 2002 to limit whole-farm conversions to exotic forestry registering in the New Zealand emissions trading scheme—otherwise known as the ETS. The bill follows through on a key election commitment and delivers on the action in the Government’s second emissions reduction plan. It takes a balanced, practical step towards protecting our most productive farmland, and will support our climate goals.

The primary sector is vital to the success of our economy. Our farmers feed New Zealand and the world. Forestry helps drive our economy, providing regional employment, sustainable wood products, and helping us meet our climate targets. However, the current seatings in the ETS mean that it can be more profitable to convert farms to exotic forests than using the land to produce food.

We’ve heard those concerns from the rural sector about whole farms being converted into exotic forests under the ETS. This Government’s position is that there is a place in New Zealand for both forestry and for agriculture to be growing our economy from the rural heartland, but doing so in a balanced way. This bill will protect our most productive land for food production while still allowing sustainable growth of the forestry sector.

The bill introduces four key changes to forestry in the ETS. The first is restrictions on exotic forestry ETS registrations on actively farmed Land Use Capability (LUC) classes 1 through to 6, which is our most productive land. Secondly, a 25 percent allowance providing farmers flexibility to plant up to a quarter of their land-use class 1 to 6 land in exotic forestry and register it in the ETS if they choose to do so. Thirdly, establish ballots to allocate up to an additional 15,000 hectares of exotic forestry on class 6 land to be registered in the ETS each year, providing for sustainable growth of the forestry sector while minimising full-farm conversions. Finally, temporary transitional exemptions for those who invested in good faith before December 2024.

Grounding these changes in the Land Use Capability classification system, which is a well-established tool that reflects the productivity of land, allows these restrictions to protect our most productive land. Importantly, the bill doesn’t limit ETS registrations on less productive land, on certain types of Māori land, on unfarmed land, or on native forests.

Following select committee, the House agreed to amend the bill to lift the bar to qualify for a transitional exemption. We agree that to be eligible for a transitional exemption, you must demonstrate both a clear interest in the specific land as well as evidence of a qualifying investment prior to 4 December 2024.

This House has also agreed to make minor amendments to the definition of “unfarmed land”, the way mapping standards will be issued, the exemption for offsetting land, and enable unused hectares in the portion of the ballot reserved for small-scale applications to be reallocated. These changes make this legislation stronger, fairer, and more future-focused while supporting the direction that this House has unanimously agreed to during the first reading.

Today, I have tabled Amendment Paper 363 proposing further changes to improve the ballot system in the bill. The ballot process is intended to support economic growth in the forestry sector by enabling additional afforestation in the ETS on Land Use Capability class 6 up to an annual limit. However, the forestry sector has raised concerns that the ballot system, as currently designed, may reduce investment in afforestation on LUC class 6 land because of increased uncertainty.

The Amendment Paper proposes to improve access to permits by running two ballots each calendar year rather than one. It will support the annual hectare limit to be fully allocated each year by allowing unallocated hectares to be reallocated between ballots and rolled over between years, and that’s capped at a proportion of the annual hectare limit prescribed by regulations. It will simplify the ballot’s design so that there is only one live permit for any title, and enable permit holders to cancel their permits if their intentions change. Finally, it will enable earlier refinement of the annual hectare limit by bringing forward the first review to 2028 rather than 2029.

Together, these changes simplify the ballot allocation system and enable greater opportunity for landowners and forestry investors to plan afforestation with confidence. This bill is a necessary and timely response to changing land use in New Zealand, driven by the ETS, one that reflects our climate ambitions, our commitment to rural communities, and our vision for a balanced, resilient future for New Zealand.

I do want to start working clause by clause through this bill in just a moment. There is something to be asked about many of the clauses in it. However, I first of all want to ask the Acting Minister of Agriculture about this Amendment Paper that was dropped just today, and dropped with no notice to the Opposition. It just arrived on the Table. No one bothered to contact us to say that there was an Amendment Paper coming. There was no attempt to consult with us over the nature of the changes. It’s just arrived now at this very late stage of debate.

We find out from the Minister in the chair that, in actual fact, the Amendment Paper has arrived, following consultation with the forestry sector. That’s fine, but if there was time to consult with the forestry sector, there was time to pick up the phone and inform the Opposition that, in fact, an Amendment Paper was coming on this bill. I am, quite frankly, appalled by the process there, and I’d like the Minister to explain why no one bothered to tell us that this Amendment Paper was coming, because it does contain some quite important changes to this bill.

They’re changes that haven’t been examined through select committee, but they’re now going to have to be examined under urgency at the last minute in a debate where who knows where it will go. I think that’s a disgraceful process and I think that we at the very least deserve the courtesy of an answer as to why we weren’t at least given some notification of the substantial nature of this Amendment Paper. Minor amendments, sure, that happens; this is a little bit more substantial than that. I think the Minister owes us the courtesy of that explanation. I note that the Minister in the chair is not the Minister whose name is on this Amendment Paper; however, I appreciate that the Minister in the chair is acting as that Minister for the time being, so I really do want that answer and I will keep on asking for it until I get it.

Moving on to the bill itself, I do want to start working, as I said, clause by clause. I want to draw the Minister’s attention first to—now, it’s going to take a while now because we’ve got to flip back and forth between the two sets of stuff—clause 4. Now, clause 4—and I’ve just got to now check that that hasn’t somehow changed between the Amendment Paper and the bill as it came back from select committee. No, we’re all good on that. It amends section 3A of the original Act. It’s around the regulations for changing the annual hectare limit.

Now, the original Act requires the Minister to consult with iwi before making secondary legislation. There’s a set of regulations that have to be consulted on. Under the Treaty of Waitangi clause in this legislation—the one where we try to ensure that we govern appropriately in partnership with iwi, with Māori, as promised by the Treaty—it has said that if we’re going to change the annual hectare limit that then there has to be consultation with iwi. I want to know from the Minister whether New Zealand First and ACT were consulted on this clause in the process of drafting this bill and whether they are happy with it, given their known stances against the Treaty of Waitangi. That would be the first substantive question to the Minister: were New Zealand First and ACT aware of this new Treaty provision—well, not the whole provision but the need to consult when new regulations for changing hectare limits come into place?

Thank you, Madam Chair. Yes, it’s quite exciting to get all these new Amendment Papers with no notice. It’s a pity, because this is a bill that we had some substantive conversations on at the committee, and certainly the Green Party deliberated at length in determining whether we would support or oppose the bill because it addresses a very serious problem, a very real problem of conversion of arable land to forestry, and it attempts to make a step in the correct direction on that. There were some serious challenges with how to try and create a piece of legislation that meaningfully addressed that problem. It would have been great to understand the logic behind the amendments and to have been included in that process—but, sadly, that is not the case.

I am, like my colleague Deborah Russell, going to be scrambling through this Amendment Paper to understand what the actual changes are. In the meantime, I’d like to draw the Minister’s attention to Part 1, clause 6. In section 4 (1)—this is the section which basically designates that there will be a 25 percent allowance in relation to an individual farm for areas where forest plantations will be restricted up to 25 percent of all the areas of land use classification, classes 1 to 6, within the farm boundary.

I have, for simplicity’s sake, an amendment to that clause which would extend that 25 percent restriction into land-use classification class 7 and 8 also, and let me express why I think that’s an important thing to do. Land-use class 8, for a start; if you read the definition of “land-use classification 8”, it is “Very severe to extreme limitations to all productive land uses, arable, pastoral or commercial forestry. Suitable for erosion control, water management and conservation.” My question for the Minister would be: why would it be a good idea to have any percentage of carbon forestry permitted on Land Use Capability (LUC) 8? And just to repeat, the classification is “Very severe to extreme limitations to all productive land uses, arable, pastoral or commercial forestry.” This is exactly the LUC which is likely to be unharvestable, and understanding the practical reality of having plantation forestry on these higher classes of land 7 and 8, particularly in far-flung places, these are the forests that will become abandoned, that will not be commercial to harvest, that will become the future fuel for forest fires when we get worse drought conditions.

I’ve got more on this, but I’ll start by asking: why should there be any allocation in LUC 8? Similarly, why was the restriction on allocations to 25 percent, which has its problems in and of itself, stopped at LUC 6? Why not also restrict LUC 7 and LUC 8? Also, in a later question, I’ll invite the Minister to express their response to the very clear concerns of the sheep and beef industry, that the engine room of that farming sector is LUC 6 and LUC 7. So my proposed amendment is that if you’re going to choose this figure of 25 percent, apply it to all our LUC classes.

Thank you, Madam Chair. I’ll just respond to the Green Party member’s questions. I think, as I made clear at the outset, this bill is about striking a balance between two very important sectors to the national economy, one being the forestry sector, the other being agriculture. We think this is striking a balance between protecting and preserving our most productive food-growing land, as well as allowing for our forestry industry to be successful, as well.

To answer the member’s question, the bill very clearly does not distinguish between production and carbon forestry. It does not restrict emissions trading scheme registration on Land Use Capability classes 7 and 8, because of the very principle that it is aiming to protect our most productive land for that food production that I’ve explained, but also allowing for sustainable growth in the forestry sector. It is not an anti-forestry bill. It is not an anti-farming bill. It is actually pro both industries.

To respond, also, to the Labour Party member’s questions—and I can sense her outrage about the consultation—but, you know, this bill has been widely canvassed. It has been through the proper parliamentary process. It has had a thorough hearing at the select committee process. In fact, the amendments made in the Amendment Paper that we’ve put forward today—there’s been plenty of hours since it was put forward—are as a direct result of industry feedback that the select committee heard. I can confirm that all parties have been consulted on the changes in the bill during that parliamentary process, and I would have thought that those parties who are making grand statements of outrage at the moment would have had something to say about that during the select committee process.

Thanks, Madam Chair. I’m not sure how the Minister in the chair, the Hon Nicola Grigg, thinks that hours of notice for an Amendment Paper that is reasonably significant and that we got no heads-up about is proper process in Parliament, because it’s not. While she says that this has gone through the select committee—yes, it went through the Environment Committee; many of us are on that select committee—the Amendment Paper obviously hasn’t. That was the point that my colleague the Hon Dr Deborah Russell was making in her contribution.

I want to also point to a couple of points that the Labour Party members have raised a few times through the select committee process and subsequently in this House during the second reading, as well. One of those is the fact that it has been pointed out during submissions to select committee and also by the Parliamentary Commissioner for the Environment that really what we should be doing here is looking at a full review of the role that forestry plays within these years. That has not been done and this has been raised by a number of people.

I do want to ask the Minister in the chair why, given that there’s a fair bit of sentiment expressed by many that this piece of legislation could have gone further and that would have been that review of the role of forestry—the Climate Change Commission, for example, has suggested that if we allow these farm conversions to forestry, there is potential further down the track that New Zealand’s 2050 emissions target under the Paris Agreement will be put at risk. Of course, there is that report by the Parliamentary Commissioner as well. I do want to ask the Minister why that wasn’t done, why the Government made the choice not to go the whole hog and to review the role of forestry within the emissions trading scheme (ETS) but instead to come up with this option.

I also want to point to some of the concerns that have been raised. Many of us met with Federated Farmers just today, as well. I know that they’ve put out a press release. They have expressed some concern and, I guess, a little bit of anxiety around the fact that this doesn’t go as far as it should. They have said that as it stands, the bill allows a lottery system for Land Use Capability class 6 land with up to 15,000 hectares. I understand that with the Minister’s Amendment Paper, the amount of land—the quantum, the 15,000 hectares that is mentioned—doesn’t change. I would like some clarification or confirmation from the Minister on that. I understand that instead of an annual ballot, the change is for two ballots per year, but that the 15,000 in total remains the same. That is still the amount that is eligible for full conversion. They have said that, meanwhile, classes 7 and 8 remain unrestricted. They have expressed the view that it is then open slather for conversion there, and they have said that 88 percent of previous conversions were on classes 6 and above. For those carbon farming, that means it’s likely to be business as usual.

I would like a little bit of explanation from the Minister with regard to the specific land-use classes that are being restricted here. I know that Beef and Lamb New Zealand has also mentioned that up to 26,000 hectares of whole farm on land classes 6 and 7 could be converted each year. They feel that it’s too high and are keen to get a sense of where the 15,000 came from as well.

Beef + Lamb New Zealand has also said that class 6 is often the most productive land when it comes to sheep and beef farming. So there are questions around why the restrictions there are the way that they are in the bill. They’ve also mentioned that class 7 land is also economically viable.

Also, I do want to just quickly point to some of the flow-on effects that my colleagues have mentioned at various points in this House, but also in our differing view to the select committee, some of those flow-on effects for schools and for communities where these changes are being proposed, as well. Thank you.

I would just point out that two of my questions are still outstanding. One is on whether or not New Zealand First and ACT were aware of adding the regulations around changing the annual hectare limit to the requirement for consultation with iwi. For the first one, on why we weren’t informed about the introduction of this Amendment Paper, the Minister in the chair, the Hon Nicola Grigg, tried to say that it was because there was a select committee process. The absolute truth was this Amendment Paper arrived yesterday—well after the select committee process—and there are these three provisions in it, which are actually quite a bit different from the bill as it came out of the Environment Committee.

I would like to have some understanding as to why there was no consultation with us on the Opposition. It would have been simple to do, to just do a quick sense check with the Opposition to ensure that we were on board or could understand what these changes are and perhaps come up with any changes that might be necessary or give the Minister of Forestry some assurance that we didn’t see a problem with them. That’s part of what happened through the select committee process. I would like to still have answers on those, please.

I want to go to clause 5 of the bill, and that is consultation about certain regulations, orders, and so on. In particular, it’s in the same space as the previous one where I was asking about why iwi weren’t consulted. The original Act, when it comes to the matters that the Minister must consult—not with iwi, but, actually, more broadly with people in the industry, with the community, with stakeholders.

Section 3B of the original Act has a list of matters that the Minister must consult on, and to that is added—so that’s with respect to forestry generally or climate change generally—the regulations for changing hectare limits as something that the Minister must consult on.

But as well, in this bill, there is a process of setting up new mapping standards. Now, that’s done through Land Information New Zealand (LINZ)—I think, is where it’s going to be done through—but there are some new mapping standards to be developed for application to farms or to pieces of property where people are considering conversion to forestry. Why are those new mapping standards not being included in the consultation as well? It does seem to be something that ought reasonably to be consulted on. I appreciate it’s quite a technical matter, but that is also something that could possibly have been consulted on. Why was that possible consultation not included in the list of things that the Minister must consult on? Maybe it’s somewhere else—maybe it’s sitting somewhere else where LINZ routinely carries out consultation anyway. It would just be interesting to know exactly what that is. That would be a bit of help. Maybe it might even be the New Zealand Institute for Bioeconomy Science that does that. Who knows? But it would just be good to know why that isn’t included in the list of consultation.

In the few moments I’ve just got left on this particular call, I do want to move on to the definition section of this bill. The bill, in clause 6, amends section 4 of the original Act, and to that it adds a considerable number of definitions.

My colleague Steve Abel has talked about the 25 percent allowance. My question around the 25 percent allowance is just how that figure of 25 percent was arrived at. Why not a third? Why not 10 percent? What was the work done behind it to show that that would be an appropriate amount? Was that sort of the amount that typically goes into forestry if a farmer is converting only part of their land? So exactly where that 25 percent came from?

This next definition I’d like to ask about is the definition of “actively farmed”. It’s actively farmed: it says in the bill that the definition of it is that “all or part of the land described in a record of title is in use for farming purposes”. So “all or part”—how much “part”? Is 10 percent enough? Is 5 percent enough? What is enough for a part there? Is it 50 percent? It is left rather ill-defined. What does it mean to be actively farmed? Does that mean farmed as a business activity; or is it, maybe, farmed as a hobby activity? These are both possible. Now, I’m not much for hobby farming. I feel as though people who engage in hobby farming should perhaps, you know—

Get another hobby.

Get another hobby. Even so, does it include that?

Thank you very much, Madam Chair. Just in response to the questions asked by members. First and foremost, the question asked was: why didn’t the Government do a full review of forestry of the emissions trading scheme (ETS)? Well, if we go back to the cold, old, dark days of 658 days ago when we came into Government, we inherited a scenario where the ETS market was in a state of massive volatility. Why? Because the prior Government had initiated a review of forestry in the ETS and it completely shocked the market. The first thing we did was stop that review. To say, “Well, why don’t you start that again?”, well, the reason is we want a credible ETS market, so we’re not into that.

Questions in regards to the Land Use Capability (LUC) classes 6, 7, and 8 and the concerns noted, particularly around land-use class 7 and 8—in terms of proportion of forestry going into those areas, approximately one-third of forestry goes into land-use class 7 and 8; around about 60 percent, circa, goes into land-use class 6—6 is the bread and butter area, obviously, and hence which is included within the broader cap that we have placed. Classes 7 and 8 are what you would refer to as traditional forestry areas and it is not subject to the cap. That’s the rationale in regards to that.

There are questions in regards to consultation and feedback on the Amendment Paper 363. I think, in fairness to the members, in the context of the changes that have been tabled by amendment, they are primarily remedial in nature, they are improvements to the bill, they are improvements in response to feedback that was received from the Environment Committee, and they enhance the bill. There’s nothing in there that actually makes the bill weaker or worse, in that context, from what was tabled. It strengthens and they are improvements and, in that context, the amendments are in good faith.

In the context of the questions around mapping standards for the ETS, obviously, the mapping standards are actually issued by the Environmental Protection Authority, and those definitions and requirements are concluded under that entity.

I just want to go to, again, another issue in the definitions, and I’m looking at some of the definitions around land-use class. Now, if I can direct the Minister—Minister, may I just ask which version of the bill you’re working off? Is it Amendment Paper 363, or off the paper as submitted by the—it’s just that we’ve had this issue once before, Minister, and so I want to make sure we’re on the right—

The Amendment Paper.

The Amendment Paper—thank you. I’ll make sure I work to the same thing then, as that kind of helps, doesn’t it? I’m looking at the definitions of Land Use Capability (LUC) class 1 to 6 land, and then land-use class 6 land—this is on page 7 of the Amendment Paper. We’ve got “LUC class 1-6 land”, which means “land identified as land use capability class 1, 2, 3, 4, 5, or 6”, and then we’ve got a separate definition of “LUC class 6 land”, which means “land identified as land use capability class 6”. So there’s kind of two separate definitions for the same thing.

The land underlying it is Land Use Capability 6, but we’ve got two definitions for the same thing. I wonder if the Minister could just talk about why we need two definitions for the same thing. I guess that my concern would be that something is going to get confused later on and someone will get confused somewhere along the way by that and there’ll be court cases for wahoo, and so the lawyers will have a good time with that.

Minister, while I’m talking definitions, I also wanted to say that I was taken by the definition of “mapped land”, which means land that is included on a map, but, in particular, it’s “on the NZLRI map”, and so it’s a particular map. But I don’t know, Minister. I just cast my mind back to the days when President Trump was drawing the trajectory of a hurricane to make sure it went in the direction that he wanted, and I sort of had that image running through my mind. I just wanted to know if you could draw on the map for yourself—and does that change around what’s going on there?

This mapped land is “land that is included on the NZLRI map”. I appreciate that it’s a common phrase—“mapped land”—but, obviously, it’s serving a particular purpose in this bill, and so if the Minister could just speak to the particular purpose in this bill. Oh, and just for the benefit of those who are watching at home, all three of you—and I’m sorry about my croaky voice; it sounds worse than it is—the NZLRI map is just the New Zealand Land Resource Inventory map, which is published by the New Zealand Bioeconomy Science Institute Ltd.

Just on that point, Minister, of course, the New Zealand Bioeconomy Science Institute Ltd is one of the new science institutes. It’s one of the four new public research organisations created from the merger of some of the previous Crown research institutes. To be honest, I just can’t recall the legislation for that coming through the House, or whether it had to come through the House in the first place, and so I just wanted to check that that entity actually legally exists.

Thank you very much, Mr Chair. In regards to questions on clause 6, definitions around where did the 25 percent number come from, I acknowledge that the member may not have read the National Party manifesto for the last election, in regards to this specific policy, but it was very clearly outlined that 25 percent was the number, and that was based on a range of feedback that was received in regards to what would be the appropriate number for this point. That’s where that number comes from.

Questions raised in regards to definitions on page 7 of the tabled amendment, as to why there looks to be two definitions of Land Use Capability class 6—in simple terms, that is to avoid confusion. One of them is in the context of the generic definition; the other is specifically for the context around the 25 percent. Through Parliamentary Counsel Office drafting, it is to ensure that there is not confusion around those two points. The point is, though, when you do look, they are very similar.

Tēnā koe e te Māngai o te Whare, otirā tēnā rawa atu tātou katoa i tēnei, Te Wiki o te Reo Māori.

Nā te mea ko tēnei Te Wiki o te Reo Māori, ka whakahua i aku kōrero me aku pātai i roto i te reo Māori i tēnei pō. Reo Māori: tuatahi ka mihi atu au ki te Minita tuatahi i noho i roto i te tūru me āna kōrero ki a mātou i tēnei pō. I kī mai ia kāre rātou o tērā taha e pīrangi ki te takatakahi i tēnei mahi, te mahi ngahere, ā, kei te pērā tonu te whakaaro o tēnei taha o te Whare. Kei te pīrangi mātou kia whai oranga ngā kaipāmu me ngā kaimahi ngahere katoa, otirā Aotearoa whānui. Heoi anō rā, e te—kei te pai?

[Thank you, Mr Speaker, indeed true greetings to all of us this week, Māori Language Week.

Because this is Māori Language Week, I will express my statements and questions in the Māori language tonight. Māori language: first I would like to thank the first Minister to sit in the chair and his comments to us tonight. He said that they on that side do not want to denigrate this endeavour, forestry, and we have a similar opinion on this side of the House. We want all farmers and forestry workers, indeed wider New Zealand, to achieve wellbeing. However, to the—is everything OK?]

Could you just hold on for one second while we catch up with the technology, please.

Ka pai. Ka tīmata anō. I kī mai te Minita tuatahi i noho i roto i te tūru, ehara tēnei i te kaupapa i te pire takatakahi i ngā mahi ngahere. Kei te pērā tonu ngā whakaaro o tēnei taha o te Whare. Kei te pīrangi mātou kia whai oranga ngā kaipāmu, ngā kaimahi ngahere hoki.

Heoi anō rā hei tāpiri atu ki te pātai a tētahi o aku hoa i tēnei taha ki ngā karaehe whenua, tēnā koe e te Minita, mō tō whakahoki i tana pātai e pā ana ki te karaehe tuawhitu me te karaehe tuawaru. Heoi anō rā ko taku pātai hei tāpiri atu ki tāna, me pēhea rā koutou e aukati i taua āhuatanga? Nā te mea kei te tino māharahara ētahi ka huri katoa ngā whenua karaehe tuawhitu, tuawaru hoki ki te ngahere.

Nā reira me pēhea rā koutou e aukati i taua āhuatanga?

Ko tētahi atu pātai, kua kōrero koe mō te kōrero tahi mō ngā iwi Māori e mahi ana i te mahi ngahere. Heoi anō rā ki te tiro mātou ki ngā whakamārama o te whenua, arā Māori freehold, Māori customary, me te general land nō te tangata Māori, ka ōrite tō kōrero tahi ki a ratou katoa, ka aha rānei?

Ki tua atu, ka kōrero anake koe ki ngā iwi? Ka kōrero rānei koe ki ngā hapū, ki ngā whānau, ki te tangata tonu hoki?

Koirā hoki aku pātai mō tēnei wā.

[I’ll start again. The first Minister to take the chair said that this programme is not a bill to denigrate the forestry industry. The opinions on this side of the House are the same. We want farmers and forestry workers to achieve wellbeing.

However to add to the question of one of my colleagues on this side regarding whenua classifications, thank you, Minister, for your response to his question regarding class 7 and class 8. However, my question, supplementary to his, is how are you going to prevent such an eventuation? Because some people are very worried that class 7 lands, and class 8 also, will be converted into forest, and so how will you prevent that from eventuating?

A further question: you have spoken about consultation for iwi Māori that are involved in the forestry industry. However, if we look at the descriptions of the land—Māori freehold, Māori customary, and general land owned by Māori individuals—will your consultation be the same with all of them, or what will it be?

Furthermore, will you consult with iwi only? Or will you speak with hapū, with families, and with individuals?]

Yeah, thank you very much to the member for the questions. Two aspects in particular were raised there around, in effect—well, I guess the question was being asked around the concerns around planting on land-use classification 7 and 8 and, in effect, what the mechanisms are around restricting that. As I noted before, the significant proportion of forestry that is going on to land that is captured by this legislation is particularly in land-use class 6, in the context of around 60 percent, and it is the assessment that in the context of when we’re looking at productive farmland in particular, that is the area and below that are the areas that are most heavily affected. The context around 7 and 8 is not an area that has been at issue.

I think it’s important to recognise that the legislation on the Table today is providing for the first time a cap on the amount of forestry going on to productive farmland in this country. At the moment, as it stands before this, there is no restriction. That has been highlighted as an area that we are looking to. As the context is set in terms of the classifications and the cap, obviously that will be reviewed as this programme rolls out over the years to come. But at this point, we’re comfortable with where the settings have been made.

Thank you very much, Mr Chair. I’m wanting to ask questions to the Minister regarding erosion-prone land. It’s now page 5—I think it was page 5 before—clause 6. I have an amendment in this regard. Minister, given the acknowledgment of the challenges in planting in Land Use Capability (LUC) 6 and LUC 7 and LUC 8 particularly, erosion susceptibility is a major challenge, and one of the things that was very well canvassed in the submission process was the fact that the LUC class system is not designed for the purpose it’s being used for, for this legislation, but the argument was that it’s the best we’ve got.

Now, the Parliamentary Commissioner for the Environment pointed out the very useful work that Manaaki Whenua has been doing on more granular Light Detection and Ranging (LiDAR) - based mapping of erosion-prone land in the Hawke’s Bay. You can jump on the website and see the erosion mapping. It is far more granular than the LUC system. The Hawke’s Bay and Gisborne have already done this mapping—the regional council has paid for it. It is publicly available data. My amendment simply suggests that in those areas and regions where this more granular and accurate mapping of erosion-prone land has been done, that should be the default basis of the erosion classification. Now, that is not a difficult thing to do.

Have you done the sums?

There are no sums to be done in that instance, sir, because the mapping has been done and it has been paid for by the—

Who’s going to pay for the implementation?

OK. You’ve already got restriction on erosion-prone land. Perhaps the Minister could elucidate to his member what the requirements are around erosion-prone land. [Interruption]

The members might like to take a call if they’re—

Take a call. I think that’s a great idea, Mr Chair. All I’m saying is that if erosion-prone land is an issue, here we have an opportunity to inform land users with a more granular and effective way of understanding that erosion-prone land.

I note that the current wording says “land that is spatially identified as a high or severe erosion risk layer in a regional plan or district plan.” It may be as simple as requiring or requesting that the likes of the Hawke’s Bay include their erosion mapping in their regional plan. But if it is not already done, then my proposal is an amendment that does exactly that.

To finish that question—and I’ll leave it there and, hopefully, the Minister will respond straight away—let’s understand that the Hawke’s Bay and Gisborne are two areas where the question of erosion, the impact of that in terms of forestry, has been absolutely devastating. Getting this right is very important. That erosion-prone land is not land that it is appropriate to have plantation, commercial forestry on that will be harvested and cause more erosion. I appreciate your response. Thank you, Minister.

I thank the member for the question. In regards to the way in which erosion-prone land is assessed, currently that is the task of the relevant local government entity to undertake that classification. In many cases, such as the one in which the member has noted, there is no restriction on the mechanisms which they use in order to determine what erosion-prone land is. I would expect, potentially, that they may consider using such technology if that’s of better quality than other sources available.

At the point at which the local governments deem that the land is erosion prone, at that point—under the legislation on the Table—that would be exempted as part of this mechanism. In effect, the bill on the Table does not restrict the use of such tech availability; it is for the role of local government to determine and do so. But as and when it is zoned erosion-prone land, then it is exempt from the bill and that’s, in our view, the most appropriate way to deal with it.

The Minister in the chair said that one of the reasons that we didn’t get any notification of these amendments that were coming through is that they were minor and remedial in nature. I just disagree, Minister. I mean, in the original bill as it went through select committee—as it was presented to the House and then went through the select committee process—there was going to be one ballot a year, and now we have two ballots a year. That’s a difference. It makes a difference as to the way it is allocated.

More importantly, in the original bill, as it went through the Environment Committee, if the annual hectare limit was not reached, if it was not all allocated, then those hectares just kind of disappeared, as it were, and now they are included in rollover relief. In effect, what this bill is now saying is that 15,000 hectares a year of farmland is going to be available, and if it’s not used up one year, if only 10,000 is used up, well, then there’ll be 20,000 available the following year, and so on and so on and so on.

I do want to focus on—sorry, there was one other thing that was changed in there: it was the timing of the annual reviews. In the bill as presented, the annual reviews were going to be, first of all, in 2029 and then every five years thereafter. In this bill, as now coming before us, a change—it’s an interesting one. The first review of a hectare limit is now going to be—sorry 2028, then 2034, then every five years thereafter. That’s a wee bit of a change. Now, bringing that first review forward to 2028 is interesting because it makes it happen in three years. Is that enough time? I do want to have a look at that when we get to it. I’ll be asking the Minister that question.

In the meantime, I want to focus on rollover. Sitting in the definition section—it’s clause 6 of the bill, which amends section 4 of the original Act; I’m looking at page 8 of the Amendment Paper—there is now a definition of rollover limit. The rollover limit is the prescribed proportion of the annual hectare limit for a calendar year. There’s the maximum that can be reallocated in the second ballot of that year to the next calendar year. What I want to hear from the Minister is: what is the prescribed proportion? Is that anywhere set in this bill or is that going to be set in regulations? If it’s going to be set in regulations, that’s fine. It’ll be subject to consultation and review, but it would be helpful to know from the Minister just around about what that prescribed proportion might be—are we talking 50 percent; are we talking 10 percent? There needs to be something in there that just says what that prescribed proportion is going to be.

Thank you, Mr Chair. Yes, I’m jumping to new section 167B—added by clause 11—page 11: “Regulations relating to LUC class 6 land permits”. This is the ballot requirement. Now, the ballot is probably the most complex and difficult part of this legislation. It’s suggesting that 15,000 hectares be designated annually through a ballot process in land-use class (LUC) 6 land. This is one of the things that has been widely criticised by certain in the pastoral sector, sheep and beef, among others, have pointed out that over the course of a decade, that’s 150,000 hectares of land, which is a significant amount of land to still be going into forestry.

The ballot requirements are complex. The means by which the ballot will be accessed is complex. My question for the Minister of Climate Change is: how did you strike upon the determination of 15,000? Why not 10,000? Why not 5,000? Why not 30,000?

Secondly, given how concerned the sheep and beef sector are, describing LUC 6 as the engine room of their production, and how opposed they are to this ballot system, I have an amendment which proposes to remove the ballot system entirely. That would vastly simplify this legislation and get away the uncertainty for land users—and for foresters, for that matter—that the ballot system represents.

My first question is: what is the logic behind the choice of hectarage that has been put into that ballot system? Oh, I have one other question in that regard: there is due to be a designation of small land holders, a guaranteed minimum percentage that will be balloted. That has not been designated. It’s strange because my memory, from the Environment Committee, was we did have a discussion about it being a minimum of a third of the 15,000—[Interruption]

Some of these members—inside voices, please. I can hardly hear. Thank you. Carry on, Mr Abel.

Thank you, Mr Chair. We did have a conversation about whether it should be a guaranteed minimum third of that 15,000 designation, and there is no number given to that. I have proposed another amendment which does in fact require that that designation to small landowners be a third, at minimum, that is 5,000 hectares annually. That’s another question, so I’d appreciate the response.

Thank you, Mr Chair. I’ve got a few questions for the Minister in the chair around the changes that are outlined in the Amendment Paper 363 that was recently tabled as well, and they also relate to the ballot system. I want to know the reason or the rationale behind the amendment here, which is to allow for two ballots instead of the one annual ballot. The Minister hasn’t explained the rationale for this amendment, as far as I’m aware. While I’m a permanent member of the Environment Committee, I made way for colleagues who heard the submissions to the select committee. I don’t recall this particular change being one that was submitted on but if it was—and there’s a reason for this—then I invite the Minister to clarify that and to share what that rationale is for the two ballots within the period, given that the 15,000 hectares remains the same. Why two ballots instead of the one?

The second question is also around the rollover provision that is outlined in this Amendment Paper; the rollover of unallocated hectares. It does state here that hectares of the annual hectare limit that aren’t fully allocated within a specific class—Land Use Capability (LUC) class 6 land permits—in a year could be rolled over for use in the next year but then cannot be rolled over further. I’m keen to hear the rationale for the eligibility for it to roll over into the next year but not the second year.

Also, if the intent of this legislation is to restrict the amount of farmland that can be converted into forestry, then why the rollover provision at all? I would be grateful if the Minister could clarify that change that has been recently introduced, as well. That relates specifically to new sections 190KHB and 190KHC, that relate to the two ballots: the first and the second ballots.

The third area of questioning that I have is around the third change that is outlined in the Minister’s Amendment Paper. I’m still, to be fair, trying to get my head around it, but it’s around—the heading for that section of the amendment is: “Permits not for same records of title”. It says here that this particular Amendment Paper that has been introduced by the Minister quite recently provides a new section 190KLA for the “application not to be eligible for entry into the ballot if it contains a record of title that is already included in an LUC class 6 land permit.” The new section 190KLB then “provides that if an application is drawn that contains a record of title that is included in other applications, those other applications are then cancelled.” I’m just keen for some clarity around that from the Minister as to why that’s been introduced through this Amendment Paper. What is the rationale for that? What is the intent behind this particular change?

Subsequent to that and related to those changes, there is also a new section 190KY, which then allows a permit holder to cancel their permit by informing the Environmental Protection Authority (EPA). The EPA then notifies the landowner using their last known contact details, as supplied to the EPA. It just seems really clunky to me and I’m trying to get my head around the rationale for this entire section. I’m just keen to get some clarity from the Minister around all of these changes that have been introduced through the Amendment Paper.

Thank you very much, Mr Chair. I’ll go through the questions that have been asked. There was a question earlier asking what the basis was for the 15,000 limit and the context and background in addition to it being something that was considered as part of the manifesto commitment. The historical plantings was also a factor in our considerations in terms of ensuring that that limit was set slightly below what was seen as the historical pipeline of planting. Also, a factor was input from the sector, also acknowledging that we have implemented a number of review steps, going forward—the first being in 2028, that will consider the appropriateness of that limit.

In the context of the question around the small applications pool—in effect, the exact number that is going to be allocated to that grouping through the ballot is something that will be set in regulations. It has not been set yet but it needs to be set at a level that will support flexibility and certainty. I welcome any input on that between now and when those regulations are considered.

In regards to the question around the unallocated hectares in the ballot process—and there are two ballots and I’ll come back to why there are two—in effect the two ballots are in place primarily to improve the access opportunity to ensure foresters have multiple opportunities to participate in the ballot. Having two instead of one gives more opportunities to participate, and that’s it. The volume is split between two so that doesn’t have any material impact in terms of that; it just gives more optionality.

In regards to the unallocated portion, again that will be set in regulations, and while it has not been set yet, consideration around what that is will be thought-out. I guess the context is you don’t want a significant rollover consideration happening year on year, which would, in effect, have a dilution effect similar, I guess, in terms of the emissions trading scheme unit settings but in a different conceptual model. Again, I’m signalling that that is something we will consider and take feedback on as well.

Mr Chair, sorry, I’m not sure how much longer I’ll be able to speak for, which I guess some of my colleagues might find a blessed relief. But I do want to—

You’re not losing your voice?

Keep going, Deborah!

Yeah, yeah, ka pai.

I do want to focus on some issues around the ballot, as we’re talking about the ballot now, because it is an interesting piece of legislation. I just want to focus, first of all, on—let me see if I can find it. It is new section 190KN, inserted by clause 16. I just feel as though there’s a missed opportunity here, Minister. It says that “The EPA must conduct a ballot by random selection—(a) in accordance with the Act … and (b) by using electro-mechanical drawing equipment or any other equipment that the EPA may determine.” I just feel as though there’s a missed opportunity, here, to tell them that they should use a biscuit tin, which might have done the job just as well. I invite—if anyone wants to, you know, they could have done a biscuit tin.

But there’s a couple of things where I think it may be a little bit difficult. If we go to new section 190KL, inserted by clause 16—that I have a serious questions around—there’s some conditions of eligibility. Of the things, to be eligible to put in the application, is you might have to pay a prescribed fee, if any. Given that this is a ballot, it does seem a little hard that a person might have to put together a whole application and have it ready to go into the ballot and then pay the prescribed fee, and then they might not get drawn out of the ballot. I think that does seem a little harsh. It does seem to me that, rather than that being a condition of going into the ballot in the first place, maybe it might need to be a condition of being successful in the ballot. That might be a better place to charge a fee. Now, I appreciate it does say “if any;”. I just invite the Minister of Forestry to take that thought on board with respect to drawing up the regulations, when it comes to working out the regulations around the ballot.

The other section I want to look at is new section 190KO, inserted by clause 16, and that’s “Review and appeal are not available for decisions about entering the application into ballot”. Now, going through the bill, as drafted, there are a series of criteria that people must meet in order to put an application into the ballot, or bits of information they must give; that all seems perfectly reasonable. But then it says the Environmental Protection Authority can decide whether or not to enter an application into the ballot and, in fact, there’s no review or appeal of that. Now, it says, “under any of sections 144 to 146” of the original Act. Now, section 144 is just asking for a review—as far as I can call it, the EPA itself. To be fair, sections 145 and 146 go on to the District Court and, I think, the High Court, and that does seem a little bit far down the track.

However, it does seem to be reasonable to me that if someone’s application is rejected from the ballot, there should at least be some capacity to ask for a review of that. Or is the Minister intending to ask the EPA to set up a system whereby they review applications in the first place so that a person can correct an application if necessary or add information to it as needed so that it can go into the ballot? Otherwise, having no right of appeal does seem to be at least a little unfair—and something that could easily be corrected.

Thank you, Mr Chair. I have a follow-up question on the ballot after my colleague Deborah Russell, who is persevering bravely through the winter challenges—

Brave, courageous, and not afraid of anything.

—courageously. In terms of the entry into the ballot, does it function the same as our entry into the biscuit tin here—you enter once and you remain there for every subsequent draw—and there’s two annually? Or does one have to enter each time there’s to be a draw, like buying a Lotto ticket? That would indicate the challenges, potentially, for the cost of entry to the ballot, if one has to enter the ballot twice a year, or does one enter the ballot once and remain there until such time as they withdraw themselves from the ballot?

My other question is—I think it’s page 21 of Amendment Paper 363 also—on section 190KZ, inserted by clause 16: “The EPA may report publicly on processes under this subpart, including information regarding receiving and approving applications and allocating the annual hectare limit.” Now, why is it that it’s “may”; surely, “the EPA must” would be better because from a point of view of transparency about the ballot allocation, “must” must be better wording. So that’s an amendment that I’ve proposed, also.

Further down, in section 190KZA, “Review of annual hectare limit”, subsection (1) states, “The Minister of Climate Change and the Minister of Agriculture, in consultation with the Minister of Forestry, may initiate a review of the annual hectare limit.” Again, I propose that it should be “they must initiate a review of the annual hectare limit.” I’ll jump down and come back with another one in a minute.

Tēnā koe, te Heamana. Ka pātai anō awau i roto i te reo Māori. Tēnā anō tātou; tēnā koe e te Minita. I a au e tipu ana, he rārangi paina kei tērā taha o tō mātou taiapa. E toru tekau mita pea te tawhiti mai i tō mātou whare. E hoa mā, ngā ngārara paina, arā pine beetle, i tau mai ki roto i tō mātou whare!

[Thank you, Mr Chair. I will again pose my questions in the Māori language. Greetings to all of us. Greetings, Minister. When I was growing up, there was a line of pine on the other side of our fence. It was maybe 30 metres from our house. My friends, the pine beetles that landed in our house!]

Ngārara paina. [Pine beetle].

Kupu hou: “ngārara paina”.

Ehara tērā i te kōrero noa iho, e te Minita, he pātai anō kei roto. Kei te kōrero au mō te wāhanga tuatahi, rārangi tuaono, me kī, Part 1, clause 6, e pā ana ki ngā taha whenua, me kī, arā farm boundaries. Ki te kōrero mātou mō ngā taha whenua, kei te whakaaro au ki ngā ripa a ngā tāngata noho tata, arā neighbours. Kua whakaritea he ture e kīa nei, he aha te tawhiti o te ngahere o tētahi kaipāmu ki te whare, ki te taha whenua, ki te pātiki rānei o ngā tāngata noho tata?

[New vocabulary: “pine beetle”.

This is not just a story, Minister, but there is in fact a question in there. I am speaking about Part 1, clause 6, regarding farm boundaries, I should say. If we speak about farm boundaries, I am considering the boundaries of the neighbours. Has legislation been prepared that says: what is the distance from a farmer’s forest to the house, the farm boundary or paddock of the neighbours?]

I move, That debate on this question now close.

Oh, thank you, Mr Chair. Sorry, I was busy listening to my colleague, so I wasn’t quite up on my feet as soon as I needed to be.

Oh, excuses, excuses!

Were you listening?

Well, you’re not listening.

I want to go to new section 190KT, added by clause 16. It’s on the bottom of page 21 of the Amendment Paper, and it’s about whether or not permits can be transferred between people. A person can win a permit in the ballot; can that person then transfer that permit on? It says no because, actually, the permit is in respect of a certain set of land, so that’s where it has to go—it has to go with the land. It does mean that the permit, in effect, does attach to the land rather than the person, or maybe both.

But it can be transferred by way of inheritance—that seems fair enough—but then the other one is in terms of unincorporated bodies. An unincorporated body, of course, could acquire a permit, and, then, members could move in and out of the unincorporated body. We have to sort of work out—it’s the standard bridge of Theseus problem from philosophy: at what point does taking one member out, one at a time, actually change the nature of the person? The Minister of Forestry has, quite sensibly, stipulated the limits and said we’ve got to have 60 percent of the original members of the unincorporated body still there. Minister, why 60 percent? Again, is it drawn from another piece of legislation? I would have thought the obvious place to go to would be the income tax legislation, but if you could just clarify exactly why it was going to be 60 percent of people continuing in place was enough for an unincorporated body.

There was another one: if we just go on to new section 190KU, added by clause 16—that’s on page 22 of the Amendment Paper—it says, well, you can’t use a land-use permit other than in respect of the land specified in the permit. That’s kind of a bit of a belt and braces section, because you would have thought that would be a no-brainer. But if the land is subdivided, then the permit is no longer valid. Now, I couldn’t quite see why that had to be the case. Surely, if the land is subdivided, the permit could be determined to go where the bulk of the forestry was. It could go across the subdivision if the land was subdivided in such a way that—say it was a 20-hectare permit, and 5 hectares of it was on one side of the subdivision and 15 on the other; surely that could be a way.

I guess there is some mischief that this particular rule is trying to prevent. If the Minister in the chair could just give us an indication of what mischief that particular rule is trying to prevent. It does seem to be reasonable to be able to subdivide land, and why shouldn’t the permit go with it? But, clearly, there could be some trouble there.

Just a response to those two questions: the 60 percent number is actually—the proxy for that is within the Climate Change Response Act. There is a precedent around that percentage being used there. Around the mandatory aspect of not being able to, in effect, transact beyond or outside the scheme: we don’t want to create a secondary market mechanism in this context, for these units, so hence why that was done.

There was a point raised around cost recovery, before, in the context of whether there will be a fee. Regulations haven’t been set in terms of what that fee will be, but the precedent will be to ensure that the costs are covered for the Environmental Protection Authority to, in effect, administer the ballot.

There was also a question in regard to, in effect, if you make an application into the ballot, does that remain even if you are unsuccessful, and in effect carry forward. The answer is no. You will need to reapply each ballot if you are unsuccessful, and a precedent for that is to ensure that at each ballot, then, everyone has a consistent starting point in terms of ability to get an allocation of hectare limit.