Hon Dr MICHAEL CULLEN (Minister of Finance) : I hereby present the Supplementary Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2004. I move, That this paper be published.

• Motion agreed to.

Hon Dr MICHAEL CULLEN (Minister of Finance) : I move, That the Appropriation (2004/05 Estimates) Bill be now read a first time.

• Bill read a first time.

Hon STEVE MAHAREY (Minister for Social Development and Employment) : I move, That the Future Directions (Working for Families) Bill be now read a first time. This bill contains the Working for Families package, the biggest change to New Zealand’s social assistance system in over a decade. It is the culmination of research and planning. By 2007 it will invest $1.1 billion a year in around 290,000 New Zealand families. This bill is further evidence of this Government’s commitment to improving the lives of low and middle income families with children. It provides more support to working families, will make people better off in work, and ensures that families have enough income for an adequate standard of living.

The bill increases the rates of family support substantially. Next year family support rates for the first child increase by $25 a week, and by $15 a week for other children. Two years later these rates will increase by a further $10. The orphans benefit, the unsupported child’s benefit, and the foster care allowance rates also increase next year by $15 a week—and as a quick aside can I say that I hope it is at least something for those grandparents who are raising children, and who have been raising this issue with us.

Family income assistance will have a simpler, more generous abatement system, letting working families keep more assistance for longer. Family tax credit will increase to ensure that families do not have less income when moving off benefits into full-time work. It will provide a higher guaranteed minimum level of income than currently—up to $17 from the current $15, and those figures are net.

A key factor contributing to inadequate family income has been a declining real value of family income assistance. This bill ensures that family support is regularly adjusted to maintain its worth for families. A new in-work payment for parents not on benefit will replace the child tax credit. The in-work payment is more generous than the child tax credit. It will be worth up to $60 a week for many families, and be worth even more for large families. Sole parents must work at least 20 hours a week, and couples at least 30 hours a week jointly, to qualify.

The in-work payment will have wider eligibility than the current child tax credit, including people receiving New Zealand superannuation with dependent children, working the required hours, like many grandparents raising grandchildren. Families currently getting the child tax credit who are ineligible for the in-work payment will still get the child tax credit; but as family entitlements change, the child tax credit will gradually be phased out. The in-work payment will have the clarity and the work incentive effect that the child tax credit lacks.

Housing costs can be, and are, a major burden. To make housing more affordable this bill increases the accommodation supplement. It lets people keep more assistance, and updates accommodation supplement areas from three to four. Auckland will be divided into two areas, with a higher maximum rate for central and North Auckland. Other areas are grouped into areas with a higher maximum rate. For example, Nelson and Queenstown are now recognised as needing a higher accommodation supplement.

These changes will improve housing affordability for people on low and middle incomes living in locations where housing costs have risen sharply. Beneficiaries in work will keep their entire supplement, no longer losing up to $20 a week. The amount of housing costs low-income workers must pay before they get help will be reduced, and for low-income earners the level where their supplement begins to abate will be raised. These changes will help families and assist couples and single people.

Working for Families makes quality childcare for low and middle income families more affordable. For many families the cost of childcare is a significant barrier to employment, yet eligibility rules have not changed since 1992, and the cost of childcare has outstripped annual adjustments in rates. Working for Families raises childcare rates and increases the income limits so that more families qualify. It aligns out-of-school care rates with those for preschool care, increasing them by a further 10 percent this October and a further 10 percent again in October 2005. This bill puts childcare assistance in legislation, recognising its importance to many families. Childcare coordinators will help families access childcare assistance and other assistance. Higher family support and accommodation supplement rates will help families who have difficulty meeting their essential costs. Changes to special benefit next year will reflect this, but no family will lose more special benefit than they gain in family support. In fact, absolutely no one will be financially disadvantaged as a result of Working for Families.

Complex rules in delivery systems work against parents moving off benefit into work. We need a simpler system that supports people into work. The changes in this bill form part of ongoing reform of the social assistance system. The child component of main benefits and student allowances will become part of the family support system. All support for children will be paid primarily through one payment—family support. This makes the assistance readily transferable between benefit and work. The removal of the child component will coincide with family support increases early next year, providing a significant boost for families with children.

A temporary additional support benefit that is easier to administer and understand replaces the special benefit for people who are unable to meet essential costs from their regular income and resources. The invalids benefit rules also change. People receiving the invalids benefit will, with their case manager’s agreement, be able to work 15 hours or more a week for up to 6 months to see whether they can sustain employment. They will not lose their benefit entitlement—though, of course, their benefit might reduce depending on their earnings, and if they leave the benefit, but need to reapply later, they will not face a stand-down unless they have higher earnings, meaning that they can switch on and off work and back to the benefit without any penalty.

The evidence speaks for itself. A couple with three children, living in Auckland on the North Shore earning $52,000 a year and paying a mortgage of $385 a week, will be about $170 better off in April 2007 than they are now.

A domestic purposes benefit recipient with two children, living in Christchurch, will be better off by about $36 a week. An equivalent sole parent working, earning $30,000 per year, will be $128 better off in April 2007 than now. The message is very clear: this Government wants to ensure that adequate income goes into households so that children have the kind of environment they need in which to grow up and flourish, and we want to ensure that work pays. At the heart of everything we are doing here is to advantage people as they move into the workplace, retain earnings, and get on with their lives. I cannot imagine anyone in this House wanting to oppose this bill, but I am looking forward to hearing the debate and alternatives put forward as people move smoothly towards what, I think, will be overwhelming support for what we are trying to achieve. I commend this bill to the House.

KATHERINE RICH (National) : One of the things I do agree with the Minister for Social Development and Employment about is that the evidence speaks for itself. So far the evidence is that the Government has got it wrong. [Interruption] Government members may laugh.

Government Members: Say it again!

KATHERINE RICH: If Government members quieten down they might hear something. They might hear that the Minister has scuttled back up to his office and found that, in fact, he has got some of his figures wrong. In one of the “Working for Families” sheets—and this has kindly been confirmed by Mandy at the 0800 number that the Minister has kindly set up—there is a scenario that is wrong and misleads New Zealanders into thinking they will get more from this Budget than they actually will. I suggest that the Minister should go back to his office and check his figures to see what other errors are there.

This legislation provides no vision for New Zealand. The only future direction signposted by this legislation is further welfare dependence and overtaxation of hard-working New Zealanders. Since when has making hard-working New Zealanders dependent on welfare constituted a grand vision for this country? Michael Cullen is happy to extend the tentacles of the welfare State into once-independent homes, but one of his predecessors, Michael Joseph Savage, will be shaking his head up there as we speak. He would be shocked at the idea that people who earn $80,000 a year are in a line for welfare support.

Another former Labour Prime Minister, Peter Fraser, would also be appalled. He was concerned that some people thought the welfare system would provide them an armchair ride to prosperity. If one believes that, then Michael Cullen has not only reupholstered the chair, he has added a couple of cushions. The benefits of this Budget go to one in five households, the majority of which are supported by welfare. The remaining households—1.2 million of them—will get nothing.

Extending the welfare roles is no vision for this country. Making middle-income Kiwis more dependent on Government handouts is no vision, either.

New Zealanders will see this Budget for what it is—a cynical attempt to buy votes. It is a lolly scramble, but people will get their lollies in a few years’ time. It is: “Vote for us next year and we will deliver the lollies.” If this is not a lolly scramble about buying votes, then why did it take the Government 5 years to get as far as this? Thanks to the best economic conditions in a generation, this Government has enjoyed healthy surpluses for 4 years but it has not bothered to recognise the needs of people and to use those surpluses to meet them. Now we have the cynical multibillion-dollar handout, most of which will come into play next year, the year after, or the year after that.

Yesterday Labour congratulated itself on increasing funds for hip and knee operations. That self-congratulation offered no consolation whatsoever for those New Zealanders who have been waiting in pain for such surgery over the last 5 years. [Interruption]

Madam DEPUTY SPEAKER: There is too much noise. There is just too much interjection.

KATHERINE RICH: This Budget is a cruel hoax for hard-working New Zealand families. The money being handed back to them is the money they earned in the first place but lost due to overtaxation. I think that this Budget will backfire on the Government. New Zealanders can see through this cynical lolly scramble and see this Budget as a desperate attempt to claw back support and retain power. If it is not about buying a third term, then why have the spend-up now? Why did this not happen years ago? Government members have no answer to that.

This Government patronises New Zealanders and expects them to be grateful. Why should middle-income New Zealanders be grateful for being made more dependent on the State and joining the ranks of many of those who are already trapped by the benefit system, which rather than empowering people, actually entraps them? Why should they be grateful for receiving their own money in the first place? People seldom feel good about receiving State handouts. They feel good about providing for themselves and their own families through their own work.

It is adding insult to injury to overtax people, then place them in a position of dependency in order to get their own money back. It is obscene. People feel good about being independent and providing for themselves and their families. New Zealanders do not want handouts. They want to keep their own money that they have earned. Marilynn from Waihi said that this morning on Breakfast. People want a fair deal. They recognise and accept that there will always be those in the community who need support and help, and they are happy to pay for that through their taxes. But they are not happy to have their hard-earned cash churned by a Government bent on creating larger numbers of dependent New Zealanders in order to meet some failed ideology—some dream of controlling everybody’s life.

It is a sad comment on this country that educated professional people with good jobs cannot get by. They cannot because they are overtaxed and they are continually required by the Government to carry a growing number of State-dependent New Zealanders. The burden continues to fall on hard-working Kiwis paying that top tax rate. Labour promised that 5 percent of New Zealanders would pay that top rate. It is now 12 percent of New Zealanders, and we are not talking about the wealthy or the elite. We are not talking about property moguls or millionaires. Many of those guys now pay their tax in other countries because they have left New Zealand. We are talking about teachers, policemen, and the other middle-income Kiwis who keep this country going.

This Budget is not about making New Zealand a place where our children can see a future. This Budget is not about growing New Zealand’s economy or creating opportunities, it is about redistributing income.

Hon Dr Michael Cullen: Oh no!

KATHERINE RICH: I say to Dr Cullen that I do not think a teacher on $55,000 is wealthy. I do not think a policeman earning $60,000 is wealthy, but Labour does. Labour thinks that that person is part of the elite and should be taxed accordingly. This Budget overtaxes the increasingly poor to give to the poorer. I say shame on the Labour Government for robbing growing numbers of hard-working New Zealanders of their independence—of their ability to take care of themselves and their own families by their own efforts. Even that family in Waihi wants to retain a greater amount of the money they earn. They do not want to be dependent on the Government for just another welfare handout.

Since his time in Opposition, Steve Maharey has talked about the universal benefit. Where is it? Michael Cullen talked about it in 1990. Where is it? Where are the changes? There is very little to crow about. There has been no talk today in any of the speeches about the rising number of people on sickness benefits and invalids benefits, which by Treasury figures will grow at an alarming rate by 2007-08.

Labour, in its term in office, will be adding nearly 32,000 New Zealanders to the invalids benefit, and up to 19,000 people on to the sickness benefit. That sort of increase cannot be explained away by looking at expected rates of disability and illness in our community.

There is nothing to crow about in the Budget. The Minister wants to overlook the fact that he got some of his figures wrong in the first place. If he got those figures wrong, how can we rely on the other figures that are in the pack? It is an absolute sham. It is a lolly scramble, but people will get their lollies in a couple of years’ time. Gee, that is really generous! But the thing about this Budget, and one of the key themes that I think it is important to remember, is that it makes some people who earn up to $80,000 dependent on the State. Michael Joseph Savage will be turning in his grave. This Government has made families whom he would have thought of as hard-working, independent people, now dependent on the State.

This is going to backfire on the Government, because the main beneficiaries of this Budget are beneficiaries already. There is no vision in making welfare a more attractive part of this country. It is a sham, it is a cruel hoax, and nobody will get any benefit for some years to come.

Hon Dr MICHAEL CULLEN (Minister of Finance) : That truly was the voice of the “rich”, broadcast live to New Zealand. That member is the last member in this House who should be getting up to talk about welfare dependency. She is the only person in the country I know who earns over $100,000 a year, and who got paid parental leave at the full 100 percent rate of her previous earnings. She then opposed the paid parental leave legislation.

Katherine Rich: I raise a point of order, Madam Speaker. Dr Cullen is misleading the House. I did not get paid parental leave through the Government scheme. I think everybody knows that is a fib, and he should withdraw and apologise.

Hon Dr MICHAEL CULLEN: Speaking to the point of order, the point I was making was that the member continued to draw her full parliamentary salary, and then opposed paid parental leave for others.

Madam DEPUTY SPEAKER: Unless the member is raising that as a matter of privilege, the issue of misleading the House is a debating point.

Hon Dr MICHAEL CULLEN: We have some questions for the Opposition. Will Opposition members vote against this bill? Yes, they said. Oh, make my day, they have done it! Oh good. Firstly, Opposition members will vote against an extra $100-odd a week in the hand for struggling working families on $25,000, $30,000, $35,000, and $40,000 a year. Why? Because they will not get any of it. It is as simple as that. If we had made sure that they got the money, they would have voted for it, because that is the Tory view.

Secondly, since the bill will pass, will National repeal it if it becomes the Government? Dr Lockwood Smith is a man with no vested interest in families with dependent children. Will he repeal this legislation if National becomes the Government? He looks baffled by that suggestion. He has only been here for 20 years and he does not know what “repeal” means. Will National repeal it before lunchtime? No, National members will be true Tories. They will have their lunch first and repeal it after lunchtime. We know that is what a National Government would do, given half the chance.

What were the alternatives? The alternatives were tax cuts. How do we deliver a benefit of over $100 a week, in the hand, to a person on $30,000 a year with two children? She is only paying $100 a week in tax at the present time—or just over. So the first $30,000 of income would have to be completely tax-free. How much do members opposite think that would cost? It would cost billions, and billions, and billions of dollars.

Who would get the biggest gain? Well, I would do extraordinarily very well out of it. I would get $300 a week out of doing that, unless of course we raised the marginal tax rates on higher incomes and put up the 39c rate. What would we get by lifting the threshold on the top tax rate from $60,000 to $70,000? Nothing for those earning under $60,000, and the princely sum of under $12 a week for all those earning $70,000 a year and above. The fact is that we cannot deliver gains of $100 a week, $120 a week, and $140 a week to people who are struggling in this life, because they do not pay enough tax to make it possible to deliver it that way.

What has come through in this debate already is the terrible prejudice that National Party people have. It came through from the ACT party in question time yesterday. We have the hard-working family on $50,000 a year, and the family, employed, on $25,000 a year. The National Party seriously believes that one’s income is an absolute reflection of how hard one works. Look at those members opposite! How hard does Pansy Wong work? I have never seen her working in the entire time she has been in the House. On the rare occasions she was working, no one understood what she was doing at the time. There is no such relationship.

Some of the hardest-working people in this country, who do jobs that nobody in this House would want to do, earn $25,000, $28,000, and $30,000 a year. These people are below Dr Lockwood Smith’s horizon. His lofty gaze never comes down to their level. He assumes that somehow they are lazy, incompetent people. They happen to be a large proportion of our population. They happen to be the strata of society I am proud to have come from. Just because I now earn over $200,000 a year as Minister of Finance, I am not turning my back on them—unlike members opposite, a few of whom came from similar backgrounds, and who argue for tax cuts just for them and nothing for struggling families.

Those members wonder why there are social problems. They wonder why kids are going astray. They wonder why people are struggling when too many of our families do not have enough money, when too many children are being raised in poverty. National would say that they should get off their butts and just earn more. They should have chosen their parents better, as so many Tories do, so that they could have inherited wealth, instead of having to struggle up through the ranks of society, as so many others have to do.

We make no apology for putting more money in the hands of families who need it. That is what we were elected to do. We make no apology for the fact that families on $50,000 and $60,000 a year, with two or three children, will get some extra money in the hand, as well, because it can still be a struggle bringing up families on those sorts of incomes when modern rents, modern mortgages, and modern costs have to be paid.

What National has never explained is why cutting the rate for those at the very upper end of society takes a higher priority than low to middle-income working families. Dr Smith has this strange belief that somehow or other the whole engine of the economy will move into a new gear if he plays a lower top tax rate. I have not noticed, in the increase from 33c to 39c, that the entire upper levels of New Zealand society—especially those who earn $200,000-plus a year—have downed tools and stopped working. All the ones who promised to go to Australia have not gone. I still see them at every meeting I go to. They are still earning vast sums of money. I do not want to hear from them in the next few days that they regard it as improper that people on modest incomes should receive some assistance.

But what we have done is increased the gains through employment, compared with being on the benefit. We have not done it by swiping $25 a week from beneficiaries, as the National Party did—pushing more people into poverty and into despair. We have done it by giving a helping hand, so people can earn more by going out to work. By actually being employed they earn more, as a consequence of this package.

National members will vote against that, because with that $1 billion they would prefer to buy a tax cut. What could they do? For $700-odd million of that they could cut the top rate of tax to 33c. That does nothing for the majority of New Zealand families with dependent children. They like to use an average based on the mean, which is biased hugely upwards by the wealthiest families in the country. The median income for a family with dependent children in New Zealand is not $60,000-odd a year; it is $49,000 a year, at the last measure. Therefore, cutting the top tax rate would benefit well under half of all families with dependent children, and most of those would get next to nothing out of it, either. So where is the justice in that? Where is the reward for effort in that? Where is the commitment to the future of New Zealand in that particular approach?

National has managed to summon up the courage to say it will vote against the bill—big deal—but it has not managed to get to the next step and say that if it became the Government, it would repeal this legislation, take the money away from the families that would get more and redistribute that money upwards to those at the top end of society. Because that is the logic of what Kathryn eponymous Rich said here this afternoon. It is what she believes ought to be done: this money should not go to low and middle-income families; this money should go to her and her ilk—on a combined family income of God knows what. I suspect it would be well in excess of $200,000 a year.

Well, I am sorry. The evidence is that people at those sorts of levels in New Zealand have done pretty well in the last 5 or 10 years, all by themselves, through the workings of the markets. The people who have not done so well are those low to middle-income families. They face costs like childcare for going to work, and this Budget and this bill will benefit them.

If National wants to go to the hustings saying “We’ll be better for pensioners”, when it cut the pension, and “We’ll be better for everybody else”, when it cut benefits and wages and reduced conditions of employment, and if it wants to redistribute this package upwards to those who are least in need, then I urge that party to really “bring it on”, because I am looking forward to that fight so very, very much indeed.

PETER BROWN (Deputy Leader—NZ First) : In case there is anybody out there listening, I just say that Parliament is debating the Future Directions (Working for Families) Bill. There might be someone listening. One never knows. It is Budget day, so people could well be sitting there listening. This is a bill—

Hon Annette King: The last one just turned off.

PETER BROWN: Now, now; the Minister could be a little bit kinder than that. It is Budget day. I inform listeners that this bill has just been presented to the House, and nobody on the Opposition side of the House has had a chance to read it in any in-depth manner. We have just quickly gone through it. I inform people out there that the general policy statement in the explanatory note states: “The Bill’s main objectives are to—make work pay for parents who move off benefits into work:”. That is a commendable aim, an absolutely commendable aim. It goes on to state in the next bullet point: “increase family income to significantly address issues of income adequacy:”. That is, beyond question, a commendable aim. The next bullet point states: “address accommodation affordability by responding to the increased cost of housing:”. That is another commendable aim. Those are three commendable aims. Then it states: “make childcare assistance an integral part of the social security system in recognition of its importance to many families:”. That is four commendable aims. And the fifth aim is to “take steps to simplify the social security system.” There are five commendable aims.

How can New Zealand First vote against five commendable aims? Well, we cannot; we will support this bill. [Interruption] But I will tell members over there on the Government benches, before they get too overjoyed, that this is a lousy way to do politics or to play politics. We sat in this House on Monday, and we all said nice things about the House and how important Parliament is to ourselves and to the country, but to present a bill that the Opposition has to read and learn about in 10 seconds flat is to treat Parliament with contempt. That is not a fair go. This bill does not need to go through in such haste or in urgency. It is a “Treat Parliament with Contempt Bill”.

It is a guilty bill, because the Treasurer over there—or does he call himself the Minister of Finance, or Treasurer, or both, or everything; he is “Minister of Everything”—has so much money that he does not know what to do with it. He has to give some away. Actually, I think, on reading this bill, that he is giving it to the right people, which is why New Zealand First will support it. We do not believe that the Minister of Finance should sit on piles and piles of dollars—billions and billions of dollars—through applying some sort of ideology. We support some of that money going into the pockets of New Zealanders, and this bill does that.

But have we got it right? Has the Government got it right? So many bills go through in a fast-track sort of way, with little or no consultation or scrutiny by Parliament, that I almost guarantee there is a major muck-up in this bill. But in the few moments I have had to read it and digest it, I cannot find it.

So we will support the first reading of the bill, and will go through it clause by clause, I hope, when we come to the Committee stage. But I say to New Zealanders out there, particularly to family New Zealanders—and New Zealand First does know what a family is, unlike some people on the other side of the House—

Hon Richard Prebble: They have an academic knowledge.

PETER BROWN: Oh, they have an academic knowledge, yes. But we actually know what a family is and how important families are to New Zealand—

Hon Annette King: They studied for it.

PETER BROWN: They have a degree in it, have they? This is getting me worried. I hope this money is going to the right people. New Zealand First would have appreciated more time to be able to digest this bill and what it is all about, but we recognise that the five aims are all worthwhile.

Hon Annette King: Read them out again.

PETER BROWN: I will read them out again for the Minister: to “make work pay for the parents who move off benefits into work:”—a good aim—and to “increase family income to significantly address issues of income adequacy:”. That is an excellent aim. To “address accommodation affordability by responding to the increased cost of housing:” sounds like a good aim. [Interruption] No, let them enjoy the moment, because I have the feeling—[Interruption] Three fingers, eh?

Hon Steve Maharey: Yes, three!

PETER BROWN: The member has five “fingers” here. To “make childcare assistance an integral part of the social security system in recognition of its importance to many families:” is a good aim, as is to “take steps to simplify the social security system.” That is a good aim. But it is the Government’s process that we object to. We think that pushing this bill through in the dark of night under urgency is unnecessary. I think there are plenty of people in this House who would support those aims, and we would have liked to have some input into them. We do not want to see a mucked up bill come in that adversely affects New Zealanders; we want the truth to emerge and what has been promised here to be delivered on.

Hon Annette King: Can you read the five again?

PETER BROWN: The Minister wants me to read the five again? I am getting a little bit exhausted. Does she think there might be someone else on the end of the radio now?

Hon Annette King: I am just enjoying it.

PETER BROWN: Ha, ha! There is a better way of looking after this country than introducing this knee-jerk sort of Budget, which flashes out the money and the lollies. There is a better way of doing it—a planned economy. To be without a plan is to plan to fail. But we would sooner have this money in the pockets of New Zealand family people than have it sitting in the little chest that Dr Cullen goes and sits all night playing Scrooge with. We would sooner it were in the pockets of families. Therefore, New Zealand First will—I was going to say support this bill going to the select committee, but the Government has abolished the select committee process on this bill. To hell with democracy! The Government is just imposing itself here. Right or wrong, we are being imposed on. Well, the Government has the aims right, but it has the process wrong.

Hon Annette King: One out of two isn’t bad.

PETER BROWN: That is about the measure of it: one out of two—half of it. New Zealand First will support this bill as it is. We will try to examine it in detail as we go through the debate in the House, but that is a pretty tall order because I suspect there will be some major errors in it. However, I do not want New Zealanders to suffer. Here is an opportunity to give some of Dr Cullen’s money back to them, and we will not stop that occurring for anything.

In the unlikely event that this bill is right, when we lead the next Government we will not be repealing it. But I have my doubts that it is right—[Interruption] Do members want me to say that again? When we lead the next Government, if this bill is correct we will not be repealing it. We will support the progress of this bill, but if we find something wrong we will highlight it hard and long. We hope, for the good of New Zealanders, that the Government has got it right, because it would be the first time that this Government has done something once and done it properly. We say it is better that the money is in the pockets of the average New Zealander, of family people, than in the pockets of the wealthy—so let us hope that the Government has got it right. We will be monitoring it carefully.

We will support this bill.

SUE BRADFORD (Green) : The Future Directions package announced today in Dr Cullen’s Budget, represented by this very sudden bill, is a mixed blessing. There is no question that the Green Party welcomes the steps that the Labour Government is taking to seriously address issues of endemic child poverty. It is a relief that after 4½ years in power it is finally taking action and beginning a major redistribution of resources towards families and children that was so badly needed after the structural adjustments and widening gap between rich and poor over the last two decades. The Green Party will be supporting this bill.

We do not want to be ungracious about it, but at the same time I will take this brief opportunity to point out a few of our concerns with the legislation. We are quite disturbed by the underlying attitudes represented here, which basically say that it is much better for any parent, even a sole parent with young children, to be out there in the paid workforce rather than staying at home and carrying out the even more important job of being a good mother, or father in some cases. I have a strong sense today that Labour is actually strengthening that dangerous moral imperative that first emerged in the 1990s with the Shipley, Bazley, and Rankin reforms. The imperative says that really all parents, including single parents, should be contributing to the formal economy as a priority, rather than nurturing their babies and children. This bill has as its focus “making work pay”—a slogan used again and again to bolster an acceptance by society that anyone on a benefit should get off it as quickly as possible, even if it is to the detriment of parent and child and even if there are still hundreds and thousands of other people still out of work; and that somehow the children of beneficiary families deserve and need less money to live on than the children of parents in paid work.

I believe the State should be neutral on whether single parents should have to work, and should also accept that it is not a bad thing if one partner in a two-parent beneficiary family works as a full-time caregiver for their children, rather than being work tested, forced out to work, or, as with this legislation, financially penalised for not going out to work. This is not to say that we do not support any measures to help beneficiaries with the transition between benefits and work. There are huge and accumulated problems with wage rates that are too low to support many families, a variety of punishing abatement regimes, and the indubitable burden of extra costs incurred when people first start work after being on a benefit. However, we believe that the way to deal with the transition is not by continuing to entrench the disparities between beneficiaries and working families on the same or similar incomes, thereby penalising the children, but rather through direct support of the working adult, and their needs.

I will turn now briefly to look more specifically at a few aspects of the bill. First of all, there is a lot of detail that will be done by regulation. The Green Party is concerned by the increasing tendency of this Government to put the detail of so much new policy into regulation, rather than doing it through the means of Parliament and the select committee process, which this bill will not have the privilege of going through. There is a lot of detail that will be done by the regulation review process and we will be watching that closely.

This bill does begin the simplification of the benefit system, which the Minister has been promising for the last 4 years, but I would like to reiterate that the Green Party would rather have seen at this time a whole rewrite and review of the Social Security Act—we would like to see the Government start again. The Social Security Act has been with us since 1964 and it has been amended over and over again, as this bill does, yet again. After 4½ years of work by the Ministry of Social Development on benefit reform, we would have thought that this would be a prize opportunity to undertake the whole process, rather than continuing to do it bit by bit.

We are pleased, however, that this package takes us in the direction of simplification. We are very pleased that the inflation indexing, which this bill promises with the family assistance, will happen. It is high time. But we note that although this bill brings family assistance up to date, families in the end will be only as comparatively well off as is equivalent to the position in 1992. It does not really keep pace in the way that we would like to see it do.

We are also concerned about what is happening around the special benefit, which has been a problem area for a number of years for the Government and for beneficiaries. Detailed provisions on this are to be done by regulation, and again we will be keeping a close eye on where this goes. The accommodation supplement is also improved in this bill, which is a good thing for everyone who is in the position of needing an accommodation supplement right now, but in the end we would like to see the accommodation supplement abolished. The only way that will happen is if we have enough housing in this country, and if we do not have a situation where so many people are forced in the end to depend on the State to provide a subsidy that in effect goes both to the landlord of the accommodation and to the employer at the other end.

Although the Budget is increasing the number of State housing units that will be available, it is only by a very small amount. It will actually mean that State houses, as a proportion of the total housing rental stock, will continue to decline. In the long run the accommodation supplement is not the answer.

In conclusion, I would like to reiterate that, despite our concerns and reservations about some aspects of this legislation, this is a commendable Budget initiative that families have been waiting for since 1991 when National’s benefit cuts and the Employment Contracts Act deepened a whole generation’s plunge into poverty. No one will be worse off as a result of this package, and I am grateful for that. Many, many families will be a lot better off over the next 4 years and into the future. I have a concern that, in the summary of the Government’s new spending on the Working for Families package, it appears that the rate of spending goes up only very slowly. In 2004-05 it is $170 million, and spending does not go up to over $600 million until 2005-06, so the wait for substantial gains will be quite long for some people. But good on the Labour Party! The Green Party will be voting for this bill and we are pleased to see that such a big step has been taken.

Hon RICHARD PREBBLE (Leader—ACT) : I rise to speak on behalf of the ACT party. ACT will be voting against this measure. We say to the House that it has no redeeming features.

Hon Maurice Williamson: None.

Hon RICHARD PREBBLE: None, whatsoever. What it does show is that the package that has been put in front of the House is a welfare, Work and Income package, and not one for working families.

Hon Steve Maharey: Rubbish!

Hon RICHARD PREBBLE: The member calls out “Rubbish!”—

Hon David Cunliffe: He said “Rubbish!” It is.

Hon RICHARD PREBBLE: That shows that Mr Cunliffe did not bother to get briefed on the Budget, or alternatively did, but did not care about this interesting detail in the Budget. I ask the House why we are having to sit in urgency. There is only one reason we have to sit in urgency, and that is in order to bring measures in. What are we bringing the measures in for? Are they being brought in for working families? When we actually look at the Budget we find that the position of working families does not change, as the member says. The reason for the urgency is that on 1 April 2005, family support, which will go to welfare beneficiary households, will increase. It is regarded as so important to suddenly do something for Labour’s welfare base that the House will have to sit in urgency!

If members think that is not correct, they can look at page 5 to see that the current benefit rate structure will change. Who will get the increase, but domestic purposes, widows, unemployment, and sickness beneficiaries. Invalids benefits, domestic purposes benefits, and caring for the sick and infirm; that is why we are rushing this measure through. But members have heard leaks from statements Dr Cullen has made to this House. He said that the purpose of this Budget—and, I guess, he claims, the purpose of this bill—is to help working families, and members are starting to say how urgent and necessary that is. I heard the Green Party and, I think, the New Zealand First Party, say they all thought that that was well worthwhile. So let us see when the new in-work benefit starts.

Hon Maurice Williamson: Midnight tonight?

Hon RICHARD PREBBLE: The member asks whether it is midnight tonight. Under urgency, that would be a reasonable assumption.

Hon Maurice Williamson: Is it?

Hon RICHARD PREBBLE: No. Is it 1 April 2005, when the Government’s welfare beneficiaries get a massive—one cannot call it a pay increase, because they do not work—increase in their benefits? No, it is not that. I would like to hear from the next Labour member why the date is 1 April 2006. Why do working people have to wait 2 years? Every single member who votes for this bill is saying to every working person in New Zealand who gets the increase: “I thought it was so important, you should wait 2 years.” Of course, what those members will probably say is: “Look, don’t complain, because most working people got nothing.”

Gerrard Eckhoff: That’s right.

Hon RICHARD PREBBLE: That is right. Statistics New Zealand says there are 550,000 working families in New Zealand with dependants, and the Minister tells us that eventually, in 2 years’ time, 150,000 working people with dependants will receive some money. The 150,000 beneficiary-led families will have it paid early, and that leaves—and I know that everyone on the other side of the House has done the calculations, so I want them to forgive me for pointing it out, just in case they have not—250,000 working families in New Zealand with dependants who, if members support this bill, will get nothing.

Dr Cullen told the House that he had gone through the Budget carefully to make sure there were no losers. Where was Mr Cunliffe when those calculations were being done? He occasionally visits the New Lynn constituency—not often, as he does not want to stay there—but he occasionally comes to visit us in New Lynn. How is it that he did not point out to Dr Cullen that the majority of working people in the New Lynn constituency will be losers in this Budget? Their only role, Mr Cunliffe, is to be bystanders and to pay for this largesse that the Labour-Progressive—and, I suppose, United Future doormat—Government will be supporting. I thought the United Future Party supported families. But no, United Future will apparently vote for this package, so those members support this increase in welfarism. They support making New Zealanders more dependent.

Let me give this example. [Interruption] No, the member should listen to this. If one takes the example of a family with two children on a moderate income of $50,000 a year, and work out where it will be after this Budget, in 2 years’ time it is true that it will get a slight increase in its position. But the family’s net position is that as taxpayers, they will pay more to the Government than they receive back. But if that family on $50,000 a year decides to halve its income to $25,000 and have 20 hours off, then it qualifies under this Budget. What happens to its real net income? It is only $4,500 worse off than if it was earning $50,000 a year.

Hon Maurice Williamson: No!

Hon RICHARD PREBBLE: Absolutely! In fact, it might be worse than that. I have not been able to quite work it out, but there will be a new special accommodation allowance for parts of Auckland—which may or may not include the New Lynn electorate; I suspect it does. I think that under the accommodation allowance, the difference between earning $25,000 and $50,000 a year, after all payments, would probably work out at around $80 a week. That is a huge incentive not to take overtime or work extra, but to go to the boss and say: “Look, I would rather work 30 hours a week than 40, because 10 hours a week is worth more to me than being paid $4,000 a year.” Of course it is, because one could probably go off and do a bit of—

Hon Maurice Williamson: Moonlighting.

Hon RICHARD PREBBLE: —moonlighting. But I would not suggest that any New Zealander would do that—even though theInland Revenue Department says that moonlighting in New Zealand is worth somewhere between $6 billion and $10 billion a year in the black economy. This bill will see the biggest boost to the black economy ever. If one has children, the only way to get ahead is to, first, breed, because the more children one has, the more money one gets—it is much easier than working hard. The second thing one should do—under this bill—is to reduce the number of hours one does and then take up a cash job like mowing lawns or something similar.

I say to members opposite that that is what they are doing. This is a bill to take us on a low-wage, Third World economy path. There are no redeeming features in this bill. This is nothing compared with the huge impact that we would have on the prosperity of New Zealand and the prospects of every New Zealand child, if there were a 20c flat rate of tax—which we could have had. Instead, what we have is the sight of members of Parliament, after having taken $6 billion of the taxpayers’ money from them, asking to be praised for having given some of it back. State radio asked me today: “Isn’t it fair enough for the Labour Party to be helping and looking after its people?”, and I think that shows exactly the level of morality of this Government. It should not be looking after its people; it should be looking after all the people. It should be looking after the nation, instead of being a narrow, partisan Government, which is way behind in the polls.

Hon David Cunliffe: They are all our people.

Hon RICHARD PREBBLE: I say to Mr Cunliffe, the Liberal Party in Australia put forward a benefit breeding programme, where the Treasurer said: “This is a policy that is going to encourage people to have kids.”, and what happened to that party’s popularity? It went into free fall. The only thing stopping this Government from going into free fall is one cannot really go into free fall when one is already under 38 percent—but one can still fall; that can still happen. I say to Mr Cunliffe that he can look for—

Hon David Cunliffe: What’s your support—1 percent?

Hon RICHARD PREBBLE: No, since I have quit the leadership it has gone up by 50 percent—so I am looking for great things.

GORDON COPELAND (United Future) : United Future will be supporting this bill. We could do nothing else, given the fact that Dr Cullen and the Government have seen fit to introduce measures almost identical to those United Future has sought in working towards the implementation of the Future Directions (Working for Families) Bill. Just to back that up, I want to read almost verbatim from the letter and notes I wrote in October last year, when we were in dialogue with the Government about what should be included in this year’s Budget.

Our party decided to put to the Government that it should be a priority in this year’s Budget to address the issue of family support. The first thing we said we were looking for was a complete overhaul of the family assistance system. This bill does that. We wanted to do that by making a significant overall increase in the assistance given to beneficiaries and low-income working families, with specific recognition of the number of children who would be dependent on the family income. This bill delivers that.

We wanted to see a simplification of the system by the amalgamation or elimination of the present segmented family support, child tax credit, and parental tax system. We predicted that this would be likely to require a downgrade in the level of the benefit for those who were not in the workforce, but a downgrade that would be more than offset by the increase in child benefit payments. That is exactly what this bill does. We sought a widening of the after-tax income level between families on benefits and working families, in order to incentivise and encourage participation in the workforce. This bill delivers on that.

I should add that the 1991 benefit cuts that were rushed through in great haste by the National administration of the day did not adequately address the way the accommodation supplement and other things were rebated, giving very perverse outcomes and very high effective marginal tax rates to many families that were endeavouring to do what we all want them to do—to move from benefits into the workforce.

We wanted to ensure that all families entitled to support actually received it, and we are delighted that the Government has signalled that it will be undertaking a major marketing campaign to ensure that all families that should benefit from these measures will do so.

We also asked the Government to make sure that we retained some relativity and comparability with Australia, for the very important and inevitable reason—and, in many ways, unfortunate reason—that some New Zealand families are relocating to Australia because that Government is giving better assistance to families than they can receive here.

One of the things I am delighted to see in this bill is that benefit levels will now be indexed. Every time the consumer price index moves by 5 percent or more, the relative level of benefits and other assistance to families will move in tandem with it, thus retaining in real terms the benefit we seek to deliver to those needy low and middle-income families.

I remember very well having a conversation with Dr Cullen before the Budget in 2002 on the whole question of indexation. As a result of that conversation, members may recall that in last year’s Budget we began at long last to index those families at the upper end of the scale in terms of income. Last year’s Budget delivered $59 million in family assistance to those families, which would not have happened had United Future not been in Parliament to advocate for their situation and to bring that reality to the attention of the Government.

I remember saying to Dr Cullen that if a family had, for example, four children, then even at an income of over $50,000 a year, it would still be struggling to make ends meet. I had no idea at that stage that just a couple of weeks ago we would see in the Sunday Star-Times the big write-up and all the publicity given to the McLachlan-Gilbert family, which is in exactly that situation. It proves the point, once and for all, that even at that level, families continue to need direct support from the Government. The reality is that it is expensive to raise children. We need to take that fully into account, and I am delighted that in this Budget the cut-off point for a lot of families is as high as $70,000. For those with quite large families, it goes up even further than that, to maybe $80,000. We welcome that very much indeed.

I also want to say that the fiscal stimulus that will be delivered to the New Zealand economy through the Future Directions (Working for Families) Bill is timely. No less an authority than the Reserve Bank has said that this is the right way and the right time to give some fiscal stimulus to our economy, because it is going slightly off the boil at the moment and, therefore, can take that stimulus without any adverse effect on monetary policy. That is very, very important indeed. What could be more important right now for this country than to put additional funds, via fiscal stimulus, into the pockets of those people who most need it?

The unfortunate reality for New Zealand at this point in time is that children and poverty go together. If we think for a moment about how the money that will be delivered through this bill will be spent, it becomes obvious that this is exactly the right thing to do at this point in our history. The money will be spent on food, on clothing, on school uniforms and transportation to and from school, on mortgage repayments, on rent, and, I could add, the odd treat by way of family outings and family holidays. I wonder how many families in this country have not had a decent holiday together as a family for some years. It is very important that we give such encouragement now to those intangible but very important aspects of family life. Who knows? Maybe a family will even be able to get a newer car—probably a second-hand import, but still a step up.

The basic and fundamental thing is that through this Budget, our kids and their mums and dads will benefit. They will be able to spend more money on their families. In truth, this is not just expenditure on our families; it is also an investment in the future of our nation. Indeed, I suggest to the House that the measure of a nation and of a society’s greatness is how it caters for, and looks after, its children. It should be the No. 1 priority.

United Future is delighted that this bill will significantly and substantially reduce the level of child poverty in this country. For too long we have allowed children and poverty to go together in our nation. In many analyses, people have said that if we look for the cause of poverty in our nation at the moment, we will see that it is related to children. Those with children are the poorest members of our society, and the more children they have, the poorer they become. Why? Simply stated, it is because a single income—paid, very often, to a working family—just does not give them enough to look after their children and give them the benefits we want them to have. I, for one, do not want to live in a country that is prepared to allow its children to live in poverty. We need to give every child the best possible opportunity for a great start in life.

I was very offended by Richard Prebble’s nasty reference to “breeding”. I find that deeply, deeply offensive.

Hon Richard Prebble: Why?

GORDON COPELAND: Because children are our greatest blessing and our greatest wealth. They are not just our present reality, but also our future.

Hon Richard Prebble: Why do only the poor have them?

GORDON COPELAND: That is nonsense. I can tell the member that many people who probably earn a lot more than he does actually rejoice in large families, and I know lots and lots of couples who place a high priority on that. Has he so quickly forgotten the McLachlan-Gilbert family that was written up in the Sunday Star-Times just a couple of weeks ago? Did he not see in those photographs the kind of situation that all of us would like to see for our families?

In summary, this is a great bill. I know I will be disappointed, but I came here tonight—not having heard the National and ACT speakers—in the hope that this bill might have the support of all parties in the House. If any party does not vote for the bill, let members of that party—here and now during the first reading—stand up and tell the people of New Zealand that they intend to repeal it if they ever become the Government. Let us get really honest and down to basics. They should have the courage of their convictions. If they are not going to vote for this bill, they should undertake to repeal it. I say to members of the National Party—some of whom are saying right now on the radio that they cannot make their minds up about the bill—that they should get off the fence and vote for the future of New Zealand by delivering some much-needed assistance to struggling families.

• Sitting suspended from 5.59 p.m. to 7.30 p.m.

LINDSAY TISCH (Junior Whip—National) : I seek leave for the 11th call in this debate to be a split speech between New Zealand First and National, with New Zealand First having the first call.

The ASSISTANT SPEAKER (H V Ross Robertson): Is there any objection to that course of action being taken? There appears to be none.

Hon ANNETTE KING (Minister of Health) : I rise to support the Future Directions (Working for Families) Bill. The name says it all. It is about the future—the future today, the future tomorrow, year in, and year out. This legislation is about what this Government will do for working families in New Zealand, and I give it my wholehearted support.

Peter Brown read out the five objectives of the bill and said New Zealand First could not vote against it. I do not need to repeat those five objectives. They were clearly put by an Opposition party member who could see through the National Party rhetoric and the ACT rhetoric, and would support a good bill in this Parliament. That is Parliament working at its best. Members will find that the overwhelming majority of members of this Parliament will support this bill. I predict that somewhere around 82 votes will support this bill. Does that mean most parliamentarians are right, or wrong? In terms of a parliamentary majority, it means most members in this House recognise legislation that will help families not only this year and next year but into the future.

But that will happen only if there is a Government that supports the measures in the bill. The truth is out. The dried arrangement who is the Leader of the Opposition was on Holmes tonight. I have never seen a more wooden performance in my life. He said that if people voted for Labour they would have these measures, but if they did not vote for Labour, they would not have them. Well, there it is; it is out there. These measures will be gone “by lunchtime”, should the National Party, in coalition with the remnants of ACT—should ACT members get voted back in after Richard Prebble leaves—get back in Government. The truth is out: if people vote for National, all the benefits in this bill will be gone.

I know that New Zealanders are not silly. They will be listening to this debate. They will be weighing up the options. They will be looking at what the bill does for them and their families, and they will be saying that the National Party has no commitment to families unless they earn heaps of money. If families earn heaps of money, then National will give them more, because it thinks those are the people who vote for it. National thinks that a family that earns $20,000, $30,000, $40,000, $50,000, or $60,000 a year is not a hard-working family, because if it was really hard-working it would earn more—it would have the ability to earn more. Who would be mowing those members’ lawns and looking after their gardens? Who would be taking away the rubbish they throw out every week? Who would be looking after their kids? Who would be teaching their kids? Who would be the nurses in the hospitals? Those people earn under $60,000. They are the sorts of people who look for some payback in a Budget.

I find it very interesting that it was OK for National, when it was in power, to give money back to families through family tax credits and family support. That is how it gives money to families—through tax credits and family support. Those people were not called beneficiaries when National gave them money, but they are called beneficiaries when Labour gives them money. What hypocrisy! How can those people not be called beneficiaries, when National puts money into tax credits and family support, but the minute Labour puts some real money into those areas, those people become beneficiaries? Well, that two-faced approach can be seen through. National members cannot say that when National does it it is OK—it is good—but when Labour does it, it is bad. If those people are called beneficiaries now, they should have been called beneficiaries under National, and that is the truth.

So National should either face up to the fact that it would do something for families through a mechanism that gives them money, or just admit that it would give money to the rich through tax cuts. Michael Cullen made it clear that if a Government wants to put that sort of money into families’ pockets, it would have to exempt tax on families’ incomes up to $30,000—no tax at all. That would mean I got a big tax break. That would mean that Maurice Williamson got a big tax break, and John Key, etc., etc. I listen to Maurice Williamson; he has always been an honest man. He has said that is excellent; he has said that it would be very good if he got a tax cut, but not good if people who need more money got a tax cut, or got more money in their pockets.

I ask National this: is it all right to tax people and give them hip operations? Those members say it is not all right to tax people and give the money back to them in family support or family tax credits, but is it all right to tax them and give them hip operations? Don Brash said in his speech that for months National had been advocating for families, that for months it had been advocating for more operations. So we are allowed to tax and put that money into operations, but we are not allowed to tax and put that money into families. That is a double standard. If we say the money belongs to the people—that taxes come from the people—we should then decide how to get the best benefit for the people. Well, we say there is a lot of benefit in taxing people and giving them hip operations, knee replacements, and so on. We believe that is good expenditure of money.

In fact, one of the things I like about what this Government has done is that we say there are things we can do for families in terms of income, and there are also things we can do for, particularly, our older people through operations like hip and knee replacements. We have said let us improve that; based on evidence, based on research, and working with the sector, let us improve access to those operations, so that our older folk have a better quality of life. The payback is that our older folk have a better quality of life; they are able to be mobile, to go out and enjoy their grandkids. That is the sort of payback that should go back to our older New Zealanders. Their children have grown up, but in terms of taxing people and putting that money where it is needed, that is good use of money, and that is what this Government has done. [Interruption] Maurice Williamson does not want a hip replacement at the moment, but I do not think he would want to pay $20,000 or $30,000 for a hip operation or a heart operation. Mind you, he probably has private medical insurance, but when he reaches 65 and his premiums are doubled or trebled, he might not be able to afford that operation. Then, of course, he will not be a hard-working New Zealander, so he will not deserve it.

I found Richard Prebble’s speech one of the most interesting and one of the most disgusting. One of the things he said is that this Budget encourages breeding. Well, it is absolutely certain that man has never had a baby. I do not know whether he has ever fathered a child. If he had, he would know that one would need more than a few dollars to want to have a baby. I can see my colleague from New Zealand First nodding her head; she knows what I am saying. Any member who says that this Budget encourages people to breed is very, very strange indeed. I do not know what sort of other inducement those members need to do other activities, but I can assure members—

Gerrard Eckhoff: I raise a point of order, Mr Speaker. Reference to the childless status of members of this House is not exactly encouraged. I recall not so very long ago the childless status of our Prime Minister being talked about in this House. The comments of the Minister are quite inappropriate. She should withdraw and apologise.

The ASSISTANT SPEAKER (H V Ross Robertson): I say to members that disparaging remarks about members are made all the time in this House. It is the personal reflections that we have to be concerned about.

Hon ANNETTE KING: I do not know who has fathered children in this House and who has not. There was no reflection on Mr Prebble. I do not know whether he has fathered children. He may well have fathered many of them. After all, another thing he said was to ask why the poor had children. I presume there was a time when he was poor. I presume that for most people—those who were not born with a silver spoon in their mouth—there was a time when they were poor. I believe that most people who have families do not have a lot of money when they are 20, 25, or 30. They are buying a house and setting up their home. They have mortgages, kids to pay for, and clothes to pay for. They are not usually wealthy. Most people are not rich when they have families. Richard Prebble made the very strange comment: “Why do the poor have babies?”. Maybe that is something he can ponder into the future, because he certainly will not be around very much longer to be able to make such stupid comments.

I believe that this is an exceptionally good bill. It will give support to families that need it. But all that I have heard from the Opposition is knocking and nagging. We believe that Opposition members are the knockers and the naggers of this Parliament. There are plenty of knockers and naggers over there. Could they please give us just one policy?

JOHN KEY (National—Helensville) : What an incoherent rant from the Minister of Health. How out of touch she is, telling the Hon Richard Prebble that people will not have a few more babies for a few extra bucks. Did she not notice the Australian Budget, where it had a baby bonus payment of $1,000? Has she not noticed the Italian Budget, which pays people $1,000? Mark my words, it will be a Labour Government one day that will come in here and tell the people of New Zealand that they have to have more kids, and that they have to have one for the country. A Labour Government will be paying people $1,000, and the Minister of Health will be blushing even more than she is now.

Did anyone see Michael Cullen on the Holmes show tonight? What a disgrace! All that nasty envy was oozing from the Minister of Finance. He tried to convince the people of New Zealand that this was not just an envious, sort of hopeless, Budget. The House does not have to take my word for it that this is not a good Budget. Members do not have to listen to me, even though I know it is a terrible Budget. We will talk about that and the Future Directions package in a moment.

Let us listen to the people of New Zealand who were asked: “Does the Budget do it for you?”

Hon Maurice Williamson: What did they say?

JOHN KEY: If the Budget does it for them in the same way as they will vote when the polls are out, there will be a difference in this Parliament in 2005. The Labour Party will look like United Future. That is how many seats the Labour Party will get. A total of 1,802 people said that it did it for them.

Lindsay Tisch: How many?

JOHN KEY: Eighteen hundred and two—that is, about 20 percent of all people who bothered to ring up said that the Budget did it for them. A total of 8,349 people said that it did not do a thing. Excuse me for being a bit of a mathematician, but one in five is exactly the same number of people who will get something out of this Budget. Michael Cullen has degrees from every university across the country. One would think he would be able to add the figures up and work out that when one in five New Zealanders are given something—when he takes $1.5 billion worth of extra taxation from people every year because of all the tax he puts on them and then gives them $220 million back—no one is surprised that one in five think this is a good Budget.

It is a disgrace. It had so much hype it was embarrassing. Yesterday the New Zealand Herald was ashamed of itself. It wrote a story saying that people earning $80,000 a year would get something in the Budget. The New Zealand Herald was not lying. Those people will get something—but in 2008. If they have four kids they will get $25. Thanks very much! In the interim they will have paid thousands of dollars more. If that is the secret to success in our country I will be glad when the Labour Party looks like United Future, because there will be nine members too many. That is the answer.

Hon Maurice Williamson: Gives us those numbers again.

JOHN KEY: The result of the Holmes show poll was that 80 percent of the country said that they had had enough of this Government.

If the Future Directions and Working for Families packages make such a good Budget and will fix welfare in this country, can somebody in this House just answer me one question? I only have one question for Mr Maharey. If this Budget is doing so much for families who are on benefits, is moving them on from being beneficiaries, and is the saviour of our country, can he just tell me why Treasury is telling us that beneficiary numbers will rise in New Zealand after this package, and that it will cost $4 billion more. That is what Treasury has told us after looking at it. Not only has Treasury slammed the growth rate, but it has said that 3.6 percent for the last decade—

Hon Steve Maharey: I raise a point of order, Mr Speaker. The member invited us to answer a question so I thought we should answer that question.

The ASSISTANT SPEAKER (H V Ross Robertson): That is not a point of order and the member is not yielding.

JOHN KEY: I see the embarrassment of members on that side of the House. Government members are very quiet over there. The Minister of Health—[Interruption]

The ASSISTANT SPEAKER (H V Ross Robertson): I say to members that behaviour in this House is beginning to slide downwards. It is time for us to look at the standards of conduct we expect in this House. I suggest members look up Speaker’s ruling 56/1, which states that interjections are to be rare, reasonable, and relevant. Chaos may be the parent of creation, but not in here.

JOHN KEY: This is a bizarre Budget if I do say so, myself. It is a bizarre package. Over the last 5 years the Hon Dr Michael Cullen has taken money out of the pockets of working New Zealanders so fast one would think he were an octopus. He has had eight hands in there taking money from everywhere. Now, under the hype, the octopus has said he will give a little bit back to people, and that they should be grateful and thank him for it. Quite frankly, those one in five people who will get something probably are grateful, but it is the other four out of five people who will get nothing.

Let us just look at the Working for Families package for a moment. The Government is going to encourage New Zealanders to get off benefits by giving them an in-work payment.

Jill Pettis: Has the member sold those ornaments on the mantelpiece yet?

JOHN KEY: No, and I do not intend to. Let us look at the in-work payment for just a moment, because it is a very interesting point. If it is such a great strategy for getting people into work—and we support in-work payments to encourage people to be active in the workforce—why is it to be applied only to people who have children? What happens to beneficiaries who are on their own—beneficiaries who do not have kids? Why is it not good enough for them? Why do people have to have 3, 4, or 5 children? Why is it not good enough for hard-working people?

Tonight so many New Zealanders have had their hopes dashed by this Government. The hype machine has been working. The Government has been trying to learn from Don Brash, and Government members have their backs to the wall. They have 12 months before “situations vacant” becomes a very relevant part of the newspaper. They have 12 months to go. They are on the slippery slide if I do say so, myself.

They are looking at themselves, but they cannot work out why it is all not working. It is because four out of five New Zealanders will get nothing out of this Budget, and they are genuine New Zealanders. They are young people who have come out of university, saying: “I’m going to wait before I have a family because I want to pay off my student loan.” Other New Zealanders are saying: “I want to wait before I have a family so that I can put a deposit on my first house.” They are older New Zealanders who know that New Zealand superannuation is not enough, and they are trying to save a little money to pay for their houses. But there is nothing for them in this Budget. There is nothing in this Budget at all.

The ASSISTANT SPEAKER (H V Ross Robertson): I remind members on my right that running commentaries are out of order. There will be a few yellow cards going out very shortly.

JOHN KEY: The Government has had months to work on this package, but what do we find? One of the five examples from the taskforce is wrong. We looked at it in the lock-up, and we said that the numbers were wrong. And if they are wrong in one of the five examples, they could be wrong in all of them. [Interruption] Perhaps I could tell the member how they were wrong. There was an example of a 16-year-old who, for 3 years, would stay 16. It is absolutely hilarious. The Government has had months and months to get it right. It has hyped it up, and now it has dashed the hopes of New Zealanders. It really is a very, very sad day for the Government.

We on the Opposition side see a Government that has been snatching taxes off people. We see a Government that we thought was going to have the biggest lolly scramble in history, and sure enough it did, but it could not even get the numbers right. It could not even work out that all New Zealanders deserve a return for their hard work—all those New Zealanders out there who contribute and work hard.

They listened to Jim Anderton, and he has sold them the biggest pup in history. He said: “Give them corporate welfare. We’re giving them welfare in other places so give them corporate welfare.” That is what he told Helen Clark. “They will absolutely love it.” Lo and behold, Federated Farmers were the first people off the block, and they came out and said they did not want corporate welfare. Exporters up and down the country do not want corporate welfare. They have said they do not want those handouts; they want tax cuts. They want to have a grade equivalent to Australia, and genuine legislation that will help them do their business. They do not want Jim Anderton, his scissors and his camera, and all the rest of it. They do not want that. This Budget is a complete failure.

Hon TREVOR MALLARD (Minister of Education) : I think we have just seen why Don Brash is not prepared to hand over the finance spokespersonship. We have heard from the man whom Maurice Williamson’s good friend Michelle Boag got into Parliament on a promise that he could be the spokesperson on finance. Then they got Don Brash in as well, on a late run.

What we have heard from the member who just resumed his seat—the member who popped into Parliament from his second or third country house in Helensville—was embarrassing. That member thought about doing some work earlier in the afternoon, decided against it, and then decided to pop down to Parliament for a bit of fun and make the sort of speech that really is embarrassing. Frankly, I am embarrassed. I was here to rebut the attack on this legislation from John Key, but I sat here for the entire speech and tried to work out whether he was for it or against it.

Hon Maurice Williamson: He’s against it.

Hon TREVOR MALLARD: He is against it. That is good—progress from Maurice Williamson. They are against it. I could not tell from listening to John Key. I am told by the member for Wanganui that ornaments on Mr Key’s mantelpiece could buy a house in Wanganui. That is why he does not understand this piece of legislation. He is spouting on about a poll on a television channel that is overwhelmingly watched by Tories.

John Key: What? Television One?

Hon TREVOR MALLARD: Television One—the channel that is overwhelmingly watched by people in the upper-income groups, the people who can afford to spend 99c each time, 100 times in half an hour, to respond to a poll. They are the sorts of people who respond to that. Maurice Williamson, I can see, has repetitive strain injury in his finger from using his cellphone to ring up.

Hon Maurice Williamson: Not from my cellphone.

Hon TREVOR MALLARD: He used his office phone to ring up Paul Holmes, time and time again. Even Richard Prebble, who every now and then is a lot of fun—he gets excited—knows not to rely on polls that people have to pay to enter. Except for the ACT polls, of course, for the leadership. Rodney Hide is buying it pretty well at the moment, but let us leave that to one side—

Darren Hughes: He got 99 percent of the vote.

Hon TREVOR MALLARD:In the ACT party, I think they are desperate to find anyone to vote. I have never seen people who are less willing to talk about legislation and the issues, and want to speak more about their leadership.

Let us get to some of the issues in this bill. At this point, I want to congratulate my friend Steve Maharey on the work he has done in this legislation. It is fair to say that there are often tensions between education and the labour market in deciding to work in the early childhood education area. Sometimes they can work against each other. Moving quality up in early childhood education costs, but this Minister has made sure that people with three children—maybe with only one of them in early childhood education—and with incomes of over $60,000 are getting support.

National is opposed to families earning over $60,000 and with one child in early childhood education getting support for that. Shame on them! Why do they care so little for the children of middle-income New Zealand? Why do they hate them so much that they say that they should not get support for their children to get quality early childhood education while their mothers and fathers go out to work? I do not understand why Tories attack middle-income New Zealanders so much. They do not care about them. They do not understand. Maybe my friend the member for Wanganui is right—

Hon Maurice Williamson: She’s not your friend.

Hon TREVOR MALLARD: She is a very good friend of mine.

Hon Maurice Williamson: She’s not your friend.

Hon TREVOR MALLARD: She is a very good friend and colleague. But the point I am making is that maybe she is right when she looks over there at David Carter, Lockwood Smith, and John Key, and says they just do not understand where middle-income New Zealand is at. They do not understand the people who have to think about whether they can afford 99c to ring up Paul Holmes, or whether they can afford to have their kid in an extra hour of childcare this week while they go to the dentist or the doctor. Those are the sorts of people who win out of the legislation we are debating, and the Tories opposite just do not care about them.

I think it is sad, exceptionally sad, that they are not commending this Government for the quality and the fairness of the package. For all their talk about the importance of work and getting people into work, they are opposing the legislation that is most likely to do it. If we were outside the House they would be called hypocrites. We cannot use that term in here, and I will not, but I want to make it clear that these people are saying one thing yesterday and another thing today. They say they want New Zealanders to work. They say they care about early childhood education, but when it comes to their votes, it becomes clear to us that the people sitting on the opposite side of the House cannot make a sensible decision.

Do members know what is the best thing they could do? My old friend, Maurice Williamson, I am sure, would have given them this advice. I have a lot of time for Mr Williamson on occasions. He knows a bit about parliamentary tactics, and he would have told them: “When you are on a loser, cut it short. Just say ‘yes’ quickly, get it over with, shut your eyes, and get on to the new business.” When that is happening, and one is being stuffed in a political sense, at that point it is better to say: “I accept it. We are losing on this particular case. I want to move forward, get it over with, and get on to somewhere where it might be more enjoyable.” Because what is clear to me is that members opposite have not been thinking carefully about the political tactics here. They want to stretch it out. When one is being done over, it is better not to extend it.

Members opposite need to think very carefully. They need the votes of people in the $25,000 to $60,000 income group—not the $80,000, not the $1-million-a-year people whom Mr Key is worrying about. It is the people in the $26,000 to $60,000 group—the families of New Zealand—and what they have given them tonight is two fingers.

BARBARA STEWART (NZ First) : As my colleague Peter Brown pointed out, New Zealand First will be supporting this legislation—the Future Directions (Working for Families) Bill. We need families to survive, as strong families are the basis of society, and we have all debated that many times in this House over the last year.

We are tired of reading negative reports on the state of New Zealand families. All the recent reports on New Zealand families, the UN report, and the Child Poverty Action Group report, state that New Zealand needs to take urgent action to enhance the lives of its children and those of its families. Many children live happy and fulfilling lives in their families, but the less fortunate live in poverty and face violence and discrimination. All of these issues can be addressed by the Government, and this legislation should do that.

When there are figures that are internationally comparable, New Zealand always stacks up really poorly. We have a large gap between rich and the poor, and we have many children living in poverty. We have high rates of death from causes such as infant deaths and sudden infant death syndrome. We have a large gap, too, between children who do well in school and children who do poorly. We have a high rate of youth suicide, a high rate of teenage mothers, and so forth. By international comparisons, we could, and should, be doing a lot better, and this legislation will hopefully do that.

The Agenda for Children came out 2 years ago, but last year’s Budget contained nothing to implement that agenda. It promised to end child poverty, but there was nothing in that Budget to improve the situation of poor families. These families have had to wait until this year’s Budget, and we hope they will benefit.

I was really pleased to see on page 23 of the explanatory note of this bill two internationally recognised income poverty measures with thresholds set at 50 percent and 60 percent of median household income, and that the Government estimates, after full implementation, that there will be a 70 percent reduction in child poverty at the lower threshold and a 30 percent—

The ASSISTANT SPEAKER (H V Ross Robertson): I am sorry to interrupt the honourable member, but it is a convention in this House that members should not conduct conversations in the House unless it is necessary to do so, and then only so as not to disturb the proceedings. I urge restraint on members to respect the contributions of another member. It is good conduct, common courtesy, and good form.

BARBARA STEWART: In looking at page 23 of the explanatory note, I see that the Government estimates that, after full implementation, there will be a 70 percent reduction in child poverty at the lower threshold and a 30 percent reduction in child poverty at the higher threshold. We hope this reduction in poverty actually occurs, and no one can argue that it should not. We in New Zealand First will be monitoring that very carefully.

New Zealand First is really pleased to see that some of Dr Cullen’s pot of gold will go to families. We want to see families prosper, and we want the worthy objectives at the start of the commentary, which my colleague Peter Brown pointed out, actually achieved. We hope this bill is right, and that there are no errors in it, as we have not really had a chance to thoroughly read its 50 pages.

We always say that the wealth of our nation can be seen in our children. Our children at the moment do not reflect a prosperous nation. Hopefully, this legislation should reverse that trend. We want to see changes to the state of our families. We want to see work pay for parents who move off benefits into work. We want to see family income increased to significantly address the issues of income inadequacy, and we want to see childcare assistance an integral part of the social security system in recognition of its importance to families. We want to see accommodation made affordable by some way of responding to the increased cost of housing. This bill outlines these things in its objectives, and we want to see them implemented.

Dr the Hon LOCKWOOD SMITH (National—Rodney) : This carry-on in here tonight reminds me of that song that goes: “Oh what a circus, what a show!”. What is so ridiculous is that the House is in urgency tonight passing legislation that does nothing until October. Most of it does not happen until April next year, and some of it does not happen until April 2007—but they have to pass it in urgency tonight! Why? Because they want to give publicity to this outrageous package.

Do members know what is outrageous about it? This is the greatest con-job that has ever been imposed on the honest working people of New Zealand. What Steve Maharey, Michael Cullen, and Helen Clark are doing is taxing hell out of honest working families; taxing them blind. They do that with the right hand, and then with their left hand—the left hand being a Labour Government, of course—they come back and say: “We’re going to give you this money. What a great Government we are, we’re going to give you hard-working families this money.” The con-job is this. The money belongs to those families in the first place. This disgusting Labour Government of Clark, Cullen, and Maharey—

The ASSISTANT SPEAKER (H V Ross Robertson): The member will use the members’ full names.

Dr the Hon LOCKWOOD SMITH: Oh, sorry—Steve Maharey. They think they can con New Zealanders by taxing them blind on one hand, and giving their own money back to them with the other—

Hon David Carter: There’s a time delay.

Dr the Hon LOCKWOOD SMITH: My colleague points out that there is a time delay. They take the tax today and they give some of it back to them in 2007. This is the greatest con-job ever perpetrated on New Zealanders. It is no wonder the Holmes poll showed that fewer than one in five New Zealanders support this Budget.

What some of those Labour members opposite do not seem to understand is the problem they have created. They are turning hundreds of thousands of working New Zealanders into beneficiaries. Before this package started we already had 194,000 working families whose employers deducted $695 million in PAYE from their pay, of which this Government pays $685 million back to the same families. That already happens right now. The Government takes $695 million in PAYE off 194,000 working families and gives it all back to the same families. That will now be far worse. At the moment 194,000 families are involved in that absolutely crazy churning. Now that the Government is going to impose this Future Directions (Working for Families) Bill, at least another 100,000 families will be taxed by the Government on the one hand, then on the other hand the Government will say: “Aren’t we wonderful to give some of it back to you later on.”

I have to say tonight that I was blown away by the arrogance of Dr Michael Cullen. He said that if the Opposition thought it could deliver this through the tax system, the only way was to give a $40,000 tax-free zone, and that was stupid, as it would mean a huge fiscal cost. Dr Cullen is an intelligent guy, but his arrogance is such that it is blinding him. He might be a Commonwealth scholar but he is not the only one in this Parliament. The low-income working families of New Zealand deserve help and they deserve support. National would deliver that to them without turning them into beneficiaries. If Labour members had half a brain they would see that tinkering with the system is not the way to fix it up. There are far better ways to deliver to low-income people than this con job.

Hon RUTH DYSON (Minister for ACC) : I can understand the member becoming slightly hysterical during his 5-minute presentation this evening, because it must be quite distressing if one is required as an Opposition member to explain to the House and, indeed, the country, what the Opposition has against hard-working families in New Zealand getting the financial support they deserve. I cannot understand the Opposition. I cannot understand what Dr the Hon Lockwood Smith has against hard-working families in New Zealand, and I sympathise with him for being required to stand in this House and oppose the legislation. That is why I understand that he had to become hysterical in order to get up enough passion to oppose something that nobody in his or her right mind could possibly oppose.

First of all I want to thank the Minister responsible for this bill, Steve Maharey, for his vision of social development in our country, for his commitment to working that vision into the reality of this legislation, and for his sheer hard work in ensuring the legislation is introduced tonight. I also give credit to the Minister of Finance and the Prime Minister for leading this major investment in social development and in our families. They deserve it. They have probably been waiting for too long, but we have delivered in a way that is affordable and sustainable, and they deserve this legislation to be passed and progressed.

I also thank and acknowledge the officials who have worked tirelessly to ensure that the detail of this legislation has the attention paid to it that it deserves so that we can progress it now and give our families the respect they deserve.

I have known for a long time that both Richard Prebble and Maurice Williamson are, frankly, poll-driven fruitcakes. I understand that. Everyone accepts it as a fact. Richard Prebble and Maurice Williamson have always been warmly regarded as poll-driven fruitcakes. They do not have any principles, they do not have any values, they do not have any vision, they do not have any commitment, and now they are totally relying on the Holmes show to elevate their blood pressure to a level at which they have both been able to participate in the House tonight. It was extraordinary to hear both of them speak.

Hon David Carter: What happened on the Holmes show?

Hon RUTH DYSON: I do not rely on any poll for my principles and my values. I never have and I never will. I know that working families in New Zealand deserve our support, and I know that, underneath it all, so does Mr Williamson know that, but it is his job as an Opposition MP to come along here and scrape whatever barrel he can find the bottom of in order to oppose it.

The National Party’s policy is to oppose this bill. It opposes making work pay for parents who move off benefits into work. National members oppose that. They think that parents who move off benefits into work should not receive any financial recognition for that. They oppose increasing family income to address issues of income inadequacy. Why would they oppose that? Exactly. There is silence. There is no good reason at all. They oppose addressing accommodation affordability by responding to the increased cost of housing. Why would they oppose that? Exactly. There is no good reason at all. They oppose making childcare assistance an integral part of our social security system, in recognition of its importance to families. Why would they oppose ensuring that childcare assistance was more accessible and affordable to families in New Zealand? There is no reason at all.

They oppose simplifying the social security system. There is no logic in their opposition. There are no principles or values in their opposition. There is certainly no vision or commitment at all to any alternative.

This bill recognises that low and middle income earning families in New Zealand work hard and that we should give them more support, not less. The National Party and ACT policies state that we should not support those families with better childcare assistance, we should not support them with better accommodation support, and we should not look at family incomes to address inadequacies. That is what those parties say. They do not care about hard-working low to middle income families. I imagine that when one is earning well over $120,000—or $1 million, as the previous speaker acknowledged he was earning—it is a bit hard to imagine how a two-income family can survive on $30,000 a year. It is hard for them to imagine how that family has to choose between the dentist and buying a new pair of shoes. That is what a number of low and middle income working families in New Zealand have to decide, week after week, and some have to go to a food bank or to Work and Income New Zealand to get special assistance.

That is the real world of working families in New Zealand. That is the issue that this bill is addressing, and it is the issue about which the National Party is saying: “We don’t care about them. We don’t think they deserve to get more support. We would have this bill gone by lunchtime.” So the National Party would reverse the changes. If National were ever the Government, and if it were a particularly busy morning in the House, it would have this legislation reversed by lunchtime. Then it would give tax cuts to people in this House—to people earning well over three times what people who are supported by this legislation are earning.

Hon Matt Robson: John Key needs a tax cut.

Hon RUTH DYSON: I think John Key earns a tax cut every day of the week—not. He does not deserve a tax cut. He does not deserve any financial support in comparison with the people who are getting support through this bill. Of course we would love to give everyone in New Zealand a tax cut, but if it comes to priorities and what is more important in terms of driving our economy and assisting people who have income inadequacy, that is the area of support that should take priority. Tax cuts to people who do not need them, versus direct financial support to low and middle income working families, just do not stand up at all. People who earn less in a year than those members opposite spend over a weekend are being denied that financial support by their opposition.

There is no logic to it. It is not even ideological. John Key can keep enjoying himself, laughing at his own opposition to this, but we do still have families in New Zealand that have to make the sorts of choices I mentioned. They have to think about whether they can afford to take their middle child or their youngest child to the dentist, whether they can afford to buy a pair of new shoes, or whether they can afford to buy gumboots to go out on the farm on the weekend and visit the farms of some of the members opposite. They do not own the farms, but they might be able to visit them, collect the eggs, and work part-time for them.

I want to draw the attention of the House to one particular aspect of the bill that relates to invalid beneficiaries. It is on page 11 of the explanatory note. People on invalids benefits in New Zealand—[Interruption]

The ASSISTANT SPEAKER (H V Ross Robertson): I am sorry to interrupt the honourable member. Can I just say, regarding interjections, that the rules permitting interjections are predicated on the assumption that the person being interjected on has the call. Interjections are not permitted at all when they are directed at a member who does not have the call. It is happening too often and too frequently. Please show some courtesy to the member speaking.

Hon RUTH DYSON: We have a number of people on invalids benefits in New Zealand. They are on invalids benefits because they are not able to work for 15 hours a week or more. Our social security system has lost touch with advanced technology, with growing expectations, and with growing demand from people with disabilities in New Zealand, who now know they have a right to support and a right to employment. Our benefit system in the past has denied them that, and in fact has offered financial disincentives for people on invalids benefits to work. This bill fixes that problem. This is a major and positive step forward for people on invalids benefits, who previously have said: “How can I work? I will be financially worse off if I do.”

I want particularly to congratulate the Minister on this initiative for thousands of people around New Zealand who are on invalids benefits. This says to them: “Our future contribution in the paid workforce will not only be literally valued but it will be financially recognised, as well.” I know that many people will be wanting to take advantage of this change. This bill is designed for people on invalids benefits, for people on sickness benefits, for people on other benefits, and for our low to middle income working families.

The National Party and the ACT party can oppose it as much as they like. They do not represent working families in New Zealand. They do not speak in this House for working families in New Zealand. They deny them the financial recognition and support they deserve. It is those people who deserve a voice in this Parliament, and who deserve the financial support that our situation can afford to offer them.

Hon STEVE MAHAREY (Minister for Social Development and Employment) : I move, That the Future Directions (Working for Families) Bill be now read a second time. I have listened with interest during the first part of what passes for a debate. It is a pretty one-sided debate, because this is how it has run so far. Mrs Katherine Rich, having worked her way through the argument about whether she was paid parental leave—whether it was via the paid parental leave provisions or by using her salary—then went on to advance what I think was one argument, which was that we ought to have made tax cuts. If she has a look at what that means, she will see that most of the people who will gain from this package—say, a family on $30,000—simply would not have got anything. In fact, they would have been in a negative position by an across-the-board tax cut. So I hope the National Opposition carries on advancing that argument throughout the rest of this debate.

National members have so far told us that they are not voting for in-work payments, families, childcare, and all the things in this package, but they have not told us that they will repeal the legislation. I do invite the next National Party speaker to put on the record, should by some mistake—because I cannot think of any other way it would happen—National become the Government, led no doubt by Peter Brown and New Zealand First I am sure, whether it would repeal the legislation. Let us go to the election knowing very clearly that the National Party position is not only to vote against kids, work, and all the things in this legislation but it would actively stop people getting the money that is in there. Let us hear from the National Party on that. It is the courageous position to take. It is the one Gerry Brownlee would take if he were leader, because there is no subtlety about Gerry Brownlee. He would be up on his feet thumping, and telling us that repeal was the option. I am sure that if he speaks next, he will tell us that.

I was moved by Peter Brown’s speech today. It had sheer clarity, as he led us through the five basic principles that drive the legislation the National Party opposes: making work pay and moving parents off benefits, increasing family incomes, increasing accommodation affordability, increasing childcare assistance, and simplifying the system. As he nobly led us through that, and as the National Party sat next door saying it did not support any of those things, I was moved by his speech, which was later reinforced by Barbara Stewart’s speech that said the same thing and that also made the very telling point—[Interruption] We are worried about poverty on this side of the House, whether or not National is worried. John Key, for example, would not know poverty if he drove past it in the Mercedes. He does not realise, but Barbara Stewart does, that this legislation will reduce poverty by 70 percent—and it will. She said that was why she was voting for it. Simon Power does not want to vote for something that will reduce poverty amongst children in New Zealand, but Barbara Stewart does. Lindsay Tisch does not want to support anything that overcomes poverty, but Barbara Stewart does.

Gerry Brownlee: I raise a point of order, Mr Speaker. I just ask you to consider whether the content of the Minister’s speech is appropriate for this debate. There have been numerous personal reflections, which I do not think do him a lot of credit, and it would be unfortunate if the standard of debate in the rest of the evening were to be lowered to a constant toing and froing of what are simply personal reflections as opposed to the merits or otherwise of the bill. We do understand the Government’s embarrassment over this bill, but surely its members could mount some defence of it.

The ASSISTANT SPEAKER (H V Ross Robertson): Again, I thank the honourable member for his contribution. The use of personal reflections, under Standing Order 116, is a matter I have taken into consideration during the course of the speech. Disparaging remarks occur quite frequently in this Parliament, but it is the personal reflection that is out of order. No objection was made by Mr Key, and therefore the robustness of this debate gave me the indication he did not object.

Hon STEVE MAHAREY: I always welcome what Sue Bradford has to say. She is a person who has done the hard yards, and she tells us the Greens want to support this bill because they too want to do something about poverty, childcare, and so on. Richard Prebble, not surprisingly, gave the most lucid opposition to this bill—unlike the National Party, which still does not seem to be able to do what the ACT party can do, and actually make its mind up on the issue. The ACT party would vote against it, would repeal it, and does not want to pass it. Basically, that party wants to give massive tax cuts. That is a clear position tonight. United Future will vote for it. Its members said they would vote for it.

John Key, the pretender to the throne, raised a whole series of points on that side of the Chamber. For example, he asked us why Treasury reports show benefit forecasts still going up. I tell the member that Treasury always has those forecasts going up, and the Government always comes in underneath them. We will carry on doing exactly that into the future.

The last speaker was Lockwood Smith, whose only major contribution that I could see was to tell us that he used to sing a song called Oh What a Circus, which I suppose was from one of the pantomimes he was in when he was young, and as a music lover I greatly appreciate being reminded of that song by him—but I cannot remember anything else he said.

The interesting thing about all of this is what National members—who are basically the only people with a wavering, quivering position on this bill, suitable to the party, and who honestly do not quite know what to do with it—are voting against. They are voting against housing becoming more affordable in October this year, because the accommodation supplement abatement thresholds will change. They are voting against that, first of all. I want to ask whether the National Party does not want to improve the abatement thresholds, so that people attain more money when they go to work. Does it not do that? Well, we will see. On 4 October this year the subsidy for out-of-school childcare rates will increase. People will get more money for that, and will not have to pay so much. So on 4 October the National Party will not want that.

Hon Richard Prebble: Another crap—

Hon STEVE MAHAREY: Well, Mr Prebble at least says: “No, I don’t.” all the time, whereas National members all sit there like stunned mullets, saying they really do not know what to do with this bill. It sounds pretty good stuff to them, but they are trying to sit there and pretend they want to vote against it.

In December this year the invalid benefits will change so that more invalids can go to work for over 15 hours, stay in employment, try out whether it works, and gradually work into a job. [Interruption] I ask Mr Brownlee whether he is against that—against the notion that invalid beneficiaries can get into work. National complains all the time about the numbers going up, but it never has a policy about how to reduce them. We have a policy about how to reduce the numbers.

Does Simon Power want to vote for more invalid beneficiaries to go to work, or is he content to be part of the process of sitting back and just seeing those numbers carry on rising? I ask that member what he reckons. Do we want to say to the Manawatu Evening Standard that Simon Power does not want to see invalid beneficiaries get a chance to go to work and retain more income? He does not want to vote for that. Well, I suggest he try this: on 1 April next year family support benefits, unsupported child benefits, and orphans benefits will all be extended to 260,000 New Zealand families. Now, I ask Mr Brownlee whether we will hear him in the Christchurch Press saying: “I don’t want anyone getting more family support. That is awful. They’re going to be reliant on the State. They’re going to have money coming into their households. I don’t want it.” I am expecting to see that headline in the Christchurch Press next year.

Gerry Brownlee: I raise a point of order, Mr Speaker. It may have escaped the Minister’s notice, but the bill actually provides for the repeal of family support later, in the—

The ASSISTANT SPEAKER (H V Ross Robertson): That is not a point of order. The member is very experienced and he should know better.

Hon STEVE MAHAREY: Will Mr Brownlee also have a headline in the Christchurch Press that says: “Grandparents raising grandchildren are not going to get another $15 a week because of the changes in this bill on 1 April next year.”? Is Maurice Williamson intending that the people of Pakuranga will hear from him: “I don’t want to see anybody get that money.”?

Let us move on to the accommodation supplement areas. We have increased the amount of the accommodation supplement in places like Nelson, for example. So will Nick Smith now, having insisted time after time to me that the cure for the housing problems of Nelson would be an increase in the accommodation supplement, courageously say in the Nelson newspaper that he no longer wants it? He has argued and pleaded for the Nelson people to have a higher rate of accommodation supplement, and the Government is giving it to them, but Nick Smith—and he can take the next call and tell us what he thinks—will be in the paper saying: “No thanks, I don’t want that. I didn’t mean that at all. I’m going to vote against an increase in the accommodation supplement for Nelson. I don’t want it.” This is Pythonesque. We will get to the point where, like John Cleese, he is saying: “What has the Labour Government ever done for us in Nelson? It has put the accommodation supplement up, it has put the family support up, it has changed things for 260,000 people, but we do not want it. Do not give it to us. We will campaign every time the Labour Government tries to give more money to people.”

John Key will drive his Mercedes down to the newspaper offices and ask to be put in the newspaper requesting that on 3 October next year childcare and out-of-school care subsidies are not increased, and that he does not want 28,000 more families getting more money.

Gerry Brownlee: When?

Hon STEVE MAHAREY: Mr Brownlee is so anxious that I want him to start voting against these measure from 1 October this year. I want to see all those courageous people on the other side of this Chamber, who are voting against the legislation, out there saying “No thanks”.

Hon MAURICE WILLIAMSON (National—Pakuranga) : What a very sad time it is for the New Zealand Parliament! I can remember a time about 14 years ago when the “mother of all Budgets” was read in this very Chamber. The front row of the Government defending that Budget consisted of the Prime Minister, Jim Bolger, the Deputy Prime Minister, Don McKinnon, and the Minister of Social Welfare, Jenny Shipley. The entire Cabinet sat on the benches; those members were there to defend a Budget that had to be done because the Labour Government that had gone out of office the year before had wrecked the economy, and had left no option. What do we see in the front row tonight? We have Steve Maharey, we have, I hate to say, Matt Robson—I am sorry about that—and I can see Marian Hobbs as well. That is all that is left here defending the absolutely indefensible.

Two or three questions need to be asked. By the way, let us clarify the National Party position, because members want it clarified: we are voting against this legislation. We do not say that we will repeal it; what we say is that we will replace it. We do believe that there needs to be assistance to some people within the community, but what this bill is doing—members talk about Monty Python; this Budget should be called the “Python Budget”—is taking huge sums of money, billions of dollars, from ordinary, working New Zealanders to make a surplus, and Michael Cullen somehow gloats that he is a great Minister because he has taken so much money off ordinary New Zealanders. I do not think that is anything to gloat about, or even to start to gloat about. Then he says that in a couple of years’ time—after the next election, that is—he will give some, actually quite a small sum, of it back to a certain group of people who could be classified as predominantly, but not solely, Labour Party voters. That is why the poll tonight on Holmes showed that for every one person that loves it, four hate it. That is 20 percent in favour, which is about where the Labour Party is polling at present as far as I can remember. Twenty percent love it and 80 percent hate it.

I got really scared yesterday when I saw the panic that set in when Labour realised that the last Colmar Brunton poll on Sunday night showed it was dropping even further in public opinion and falling behind. We had this enormous announcement that anyone who wants a hip replacement or knee surgery can have it. I hoped that Labour would not drop any further in the polls, or it would become compulsory to get a hip replacement and have one’s knees done. It was the most desperate move of a Government that is in trouble.

And what is this measure? This is the exact same move. This is not an attempt to relieve the burden on ordinary, middle-class New Zealanders. No, this is saying, “Why don’t we tax the hell out of all New Zealanders as hard as we can, then put some crumbs back on the table of one in five families?”. For that reason alone the National Party, I am proud to say, will both vote against this bill and, when the new National Government is elected next year—and from the way it is going, if Labour keeps falling like it is, it will be a majority, sole National Government, which will not even need to look at coalitions, because that is how bad that lot is—replace it with a properly targeted package of assistance for those hard-working, middle-income families who have been beaten around.

So what do the Labour Party members do tonight? They try to personalise this by referring to some of us. I admit that every one of us in Parliament is at the high end of income earners, but that is not what we are talking about here tonight. No one is talking about giving tax breaks to people earning over $100,000, which includes every one of us in this House. [Interruption] Exactly. There are a couple of questions that I still have not heard an answer to.

Lindsay Tisch: I raise a point of order, Madam Speaker. The outrage from the other side of the House is completely unacceptable. It comes from a certain sector that tonight has been very vocal. I ask that you direct that member in particular, the senior Labour whip, to tone down her comments.

Madam DEPUTY SPEAKER: I think there has been a fair bit of cross-interjection. I think it does need to be toned down a bit so that the speaker can be heard.

Hon MAURICE WILLIAMSON: I am very, very comfortable with Labour’s opposition tonight, because I have never seen such a limp-wristed, hopeless, pathetic attempt to justify something. On the night of the Budget, those benches should be packed and those members should be crowing about what they have done.

But there are a couple of things I want some answers to, and I think this is really important. I think New Zealanders will see this Budget for what it is by this one issue alone: every time I have been in this Parliament under urgency on a Budget night, it was to pass legislation that affected people as of midnight that night. That is why we go into urgency. The clock stops, we stay on today’s date, and we do that because we are making changes to the tax system—we are making changes to petrol tax, we are making changes to benefit schemes—as of midnight. My question is, and I have heard it asked many times so far, whether this bill changes anything as of midnight tonight.

Opposition Members: No!

Hon MAURICE WILLIAMSON: All right, that is clear. The answer is no. So do the changes happen tomorrow? No. In the weekend? No. In a week’s time? No. It does not have any impact until October. This bill could have been done in the normal time frame that every other bill is done in. So why would the Government call urgency? Because it thought that it had this neat momentum, that it was on a roll with the Budget.

John Carter: What did the Holmes show say?

Hon MAURICE WILLIAMSON: Mr Carter should not feed me these lines; it is too good to miss. What I loved tonight is that this poll was from the television channel that is charter-funded. We are talking about the “bean-sprouts and batik brigade” channel, the “sandal-wearers and kaftan-wearers” channel—Television One. Hardly a Tory would watch Television One, the State channel. And what did the poll show? I have heard this Labour Government often refer to Holmes polls, saying, for instance: “We saw on the Holmes poll last night that the Government is moving in the right direction.” In the first 3 years, to give those members some credit, it was pretty hard to lay a glove on them. But tonight, when that Holmes poll showed that only one in every five New Zealanders—

John Carter: No!

Hon MAURICE WILLIAMSON: That is right—one in every five. Guess what? It is an incredible coincidence. Members should guess what the coincidence is, and see whether they can spot it. This Budget favours one in every five families, and the vote tonight in New Zealand was that one in every five supports it. I tell this Government that at the next election it will get one in every five votes. In fact, I think it will be lucky to get that, because a few will bail out on the way. But to be fair—[Interruption] That is right—one in every five votes. That is what the Government will get, because this is a cynical move and it is seen by the public as a cynical move.

Let us get this very clear: this is not giving people anything. What it is doing is letting them have back a small amount of what was taken from them in the first place. Anyone can be a Robin Hood. Anyone can rip money off people, then say: “Guess what, I’m going to be kind. I’ll give you back a bit.” We accept there needs to be a targeted assistance programme, we accept the focus needs to be on getting people back into work, but we think this is the biggest miscue that has ever been made—and so does that Government, because if it thought it was right, we would see that front bench riddled with all its senior Ministers. They would all be taking the call and defending it, but they cannot defend the indefensible.

My last question to those members is this: if this is such a great scheme, how come 5 years have gone by—5 whole years—and they ask whether the National Party would repeal it? It is just a disgrace.

RUSSELL FAIRBROTHER (Labour—Napier) : After that lamentable effort from that senior member on the furthest back Opposition back bench, I say bring back Bill English. One can now see that he had great judgment. He had the judgment to send that member to the furthest back seat of the back bench that he could imagine. Members can see why—10 minutes of wasted time in this House, and not once did he dare to address the bill. I guess that is because the Government used words with more than four letters in it, so he cannot understand what it says.

This is a bill New Zealand will welcome, and the National Party will regret because those members could never have thought of it. That is because it is good news for every honest, hard-working family in New Zealand, and that party would not even know what that was. Regarding that last effort, for that speaker to have spoken it with a straight face he would need to be a contortionist. This is a bill that brings the family centre stage. [Interruption] I have just had a jury verdict that says: “Eleven for, one against (National). We’ll have another ham sandwich, thank you.” This bill brings the family centre stage in the New Zealand economy and social setting. That is a new idea for National, is it not? Fancy those members putting families at centre stage, instead of the tax break for the wealthy! This bill should be named the “Working for Families Bill”. Well, what is it named? It is named the ”Future Directions (Working for Families) Bill”. How ironic that a bill that does so much for so many people, and that makes this country get on to its feet again, is named the “Future Directions (Working for Families) Bill”. No wonder the last speaker did not bother to read it. No wonder we have allowed him until October to read and understand it. On 1 October that member will come grovelling to these benches, and he will be the last speaker, saying: “Oh, I wish I’d read that bill before I wasted 10 minutes of this country’s time.”

I want to talk about a great electorate that has working families—unlike the electorate of the last speaker, whose constituents sip lattes and send out overdue-mortgage notices. Napier is an electorate of working families. This is a good bill for the Napier electorate, because it is an electorate of working families. The suburbs of Bay View, Ahuriri, Mārewa, Onekawa, Maraenui, Greenmeadows, and Taradale are family suburbs. [Interruption] I say to Mr Brownlee that a family is that special thing we have in New Zealand that has a mum and a dad and kids. Mum and dad love each other, they love their kids, and the kids return it. That member may not know much about that, but he should listen to this debate, and he will have his eyes opened—and keep other things zipped up. There are suburbs with the real stars, and with their share of families on benefits—Mārewa, Bay View, Onekawa, Maraenui, Greenmeadows, and Taradale—and moving those families from the benefit to the workforce is one of the best things we can do for the suburbs of Napier. Before today, and before 1 October, it has been a hurdle to get off a benefit, no matter how much it was screwed down by the previous Government, because moving from the benefit to a wage often meant a drop in income—but no longer, because henceforth one is encouraged to work. One is encouraged to get off the benefit and get into a job.

And we can offer jobs. For the next 4 years or so, experts greater than the members opposite could even imagine predict that the unemployment rate will be below 5 percent, which means our families will have income earners. The intent is to get them off the benefit, which is not understood by the intellects on the other side of the House. We will move to an economy that is sound. So this bill is good news for New Zealand, good news for the suburbs of Napier, and good news for Napier.

Hon Maurice Williamson: Get out of making excuses for criminal behaviour.

RUSSELL FAIRBROTHER: Speaking about criminal behaviour, I think the previous speaker would know about that. Anyone who has studied it, both close up and far distant, would know that most criminal offending comes from those who are in poverty. That is well documented. Those people know there is a correlation between families under financial stress and family dysfunction. That is well known to those who bother to meet with families. The correlation between child health and poverty has been glaringly obvious to all but those who talk about tax cuts for the rich. We cannot ignore that correlation.

This bill increases family income. We recognise that family income inadequacy has a significant impact on the welfare of our society. This bill addresses that issue by lifting the levels of family income, so that families can move forward. Families in Napier who are endeavouring to survive can now lift their heads. The electorate that I represent will march forward from tomorrow morning. The workers in its suburbs can go off to their workplaces knowing that this bill places the family in the centre of our consideration. This is a bill for children. It is a bill that lifts the place of children, so that they can have families who care and love for them.

So I recommend this bill to the House. I endorse this bill, and I wait to hear one single argument from the members opposite as to why this bill is wrong—an argument from ex-bankers, ex-lawyers, ex-accountants, ex - money-sellers. I want to hear what they have to say about it. This is a bill that is working for New Zealand and working for families.

PETER BROWN (Deputy Leader—NZ First) : This bill addresses some serious issues. Right now, as we speak, there are some New Zealanders and New Zealand families suffering, and they need some financial help. New Zealand First is prepared to support that and help them.

But we have found two errors in the bill already. The first is in clause 2, “Commencement”. It is obviously a mistake for it to state that the bill will be brought in in 2005, so we will put an amendment, in my name, to delete this clause. [Interruption] No, I am warning that we are going to put one in. I hope the National Party will support it, because it is a quite serious issue. If the Government is bringing in, under urgency, a bill like this to give financial assistance to families, then, clearly, it would want it to happen immediately. It has made a dreadful mistake.

Hon Richard Prebble: Having a bit of a change, are you?

PETER BROWN: No, we are simply making a change.

Hon Richard Prebble: He listened to my speech where I pointed out the mistakes, and he’s changing things.

PETER BROWN: I am saying now that we will move an amendment, and if the member is at all sincere, then he will support it. We propose to omit clause 2 and substitute: “This Act comes into force on the day after the date on which it receives the Royal assent.” It is as simple as that. In other words, if members are to sit here until 10 o’clock tonight and all day tomorrow in urgency, we might as well do it for some immediate effect—not for something for the year 2005. I think the National Party has suddenly realised there is some merit, when we are in urgency, in doing something positive.

Hon Maurice Williamson: We just might think about this one.

PETER BROWN: I invite the member to think about it. It is all very well our rowing about this thing, but there are people out there suffering now. [Interruption] Oh, I am coming to the doormats. Is the member talking about these doormats, or those doormats? There are so many doormats around that I am not sure which one the member means. We are coming to the doormats, because—

Hon Maurice Williamson: What’s the difference between a doormat and a laptop?

PETER BROWN: That is too technical for me. I am just a simple sailor. We will move an amendment, and I hope members will support it. Clearly, the Government will, because if it wants to help people, it will want that help to take immediate effect. I am hoping United Future will, but one never can tell. We will move another amendment, too, because I was told that Larry Baldock, on behalf of United Future, went on Radio Rhema yesterday, the Christian radio station—

Hon Maurice Williamson: And the Prime Minister?

PETER BROWN: No, he was with our young guy, Craig McNair. I told Craig McNair not to be too vicious—to take it easy. Larry Baldock said there was much merit in the definition of “family” in Craig McNair’s Commission for the Family Bill and that, had we previously put it up in the House, his party would have supported it. Craig McNair pointed out that we had done that. So we will add the definition of “family” from that bill: “A family is defined as a family group, including an extended family (a) in which there is at least one adult member; and (b) in which the members have a biological or legal relationship.” [Interruption] The title is the “Future Directions (Working for Families) Bill”. We think it only appropriate that a proper definition of the family should be in the bill. Unless members want to accept the liberal definition currently in the Families Commission Act, which I cannot readily find—

Hon Maurice Williamson: Just make it up!

PETER BROWN: I should just make it up. The definition in that Act is very liberal. I have given the United Future members the opportunity to put their money where their mouth was yesterday on Radio Rhema. Surely Larry Baldock would not tell Radio Rhema one thing, and then, when there is an amendment to have an appropriate definition of “family” in this bill, vote against it.

Hon Maurice Williamson: Of course he would!

PETER BROWN: He would not. He is a man of honour. We are all honourable people here. We do not go on Radio Rhema and tell porkies, do we? Never! I know that the National Party will give me hell because I am bailing the Government out. I am giving it the chance to get this bill right and have it come in on the right date, which is after it receives the royal assent. I know that the Government will take that seriously, and I know that Larry Baldock would not dare say one thing on Radio Rhema then vote against it in the House. That would be a mortal sin, would it not? I would have thought it would be terrible.

Simon Power: Who is Craig McNair?

PETER BROWN: He is the youngest, most enterprising MP in this Parliament. He is one of the most sincere people members will ever be privileged to meet, but Mr Power does not keep that sort of company, does he? I do; it rubs off on me. I meet all these sincere people, and there is none more sincere than Craig McNair. Whilst we are talking about him, I was proud to sit in this seat when he took on the whole House the other day on the Commission for the Family Bill. I have never felt prouder. I have felt pretty proud listening to Winston Peters, but when that young guy spoke and took on the House on his own, I felt really proud to be part of his team. That is who Craig McNair is. I tell members that he is very much up-and-coming. That is enough about Craig McNair; I will get back to the bill.

We want this bill to come into immediate effect. We support it, but we want it to come in immediately, and we will be moving amendments in the Committee stage accordingly. We know there are people out there who are hurting. We know that this bill will be of some assistance to them. The aims in this bill are worthwhile. As I say, we looked through it and found two errors, and no doubt we will find a few more. [Interruption] The second one was the definition of the family. Even Mr Williamson would agree that the definition in the Families Commission Act is not adequate. We are talking about the Future Directions (Working for Families) Bill.

Hon Maurice Williamson: The Mafia would qualify, wouldn’t it?

PETER BROWN: It just misses including a gang as a family, but two prostitutes living with their pimp would be a family under the definition in the Families Commission Act. We cannot have that in this bill, so we will put up an amendment to reflect that.

I finish by saying there are some good aims in the bill. It deals with payment of funeral grants where there is a surviving spouse or children, children’s funeral grants, accommodation supplements, disability allowances, and all the social security payments in schedule 2. Well, they should come in immediately. I think Mr Maharey is nodding there. We will bail the Government out and give it a chance to get it right. We told it earlier on: “Do it once and do it right.”, and this is its opportunity. We will be studying this bill as it goes through the Committee stage, and amending other sections as we find fault. I hope we do not find too many, but there are two, for a start. My throat is getting sore, so I will conclude by saying that we support this bill and we will be moving two amendments, at least, when we get to the Committee stage. Hopefully, there will not be too many more, but we will be advising members accordingly. We look forward to the unanimous support of all parties. Members should have a little bit of compassion. If the bill is to pass, let us get it right. Let us get the date right; let it apply urgently—when it gets royal assent.

SUE BRADFORD (Green) : I would like to take a relatively brief call on the second reading of the Future Directions (Working for Families) Bill to raise a few issues in particular before we go into the Committee stage. My first concern is related to the proposal that appears to replace the special benefit with a new measure called temporary additional support. It looks as though the current discretionary regime will be replaced by a rules-based system operating through regulation. That takes some of us who have been around for a while back to the ill-fated attempt by National to do the same thing with its social welfare reform legislation in the mid-1990s. That bill met with massive opposition from beneficiary advocacy groups and community social services organisations generally, and eventually even the Nats backed down on it.

It is very difficult to regulate for the totality of human existence, and, if a regulatory regime is introduced, there will always be people who fall through the cracks. Because the special benefit is a benefit of last resort, that leaves no assistance available for those whose circumstances just happen to fall outside those that are contemplated by the officials who are drafting the regulations. No matter how well intentioned this Government might be—and overall I believe it is, with this bill—I still think it is dangerous to do away with the discretion around the special benefit. Beneficiary advocates have lobbied hard over the last few years, as I am sure the Minister is all too well aware, to persuade the Ministry of Social Development to hang on to discretion and to train its staff to exercise it properly. It is a great pity that it appears we are to lose that, unless other things happen first, like the lifting of benefits to levels that mean there will be much less need for third-tier assistance.

In a similar vein, it is also of concern that the temporary additional support being proposed, presumably by regulation also, will be capped at 30 percent of the main benefit. That takes no account of the fact that the exigencies of human existence are infinite, and that at times people can find themselves in extraordinarily difficult circumstances through no fault of their own. While I accept totally that the State cannot and should not ever be expected to automatically be capable of picking up all the pieces of people’s lives, I believe that, ideally, Work and Income staff should retain the ability to make fair judgment calls based on the realities of the situation, rather than being completely constrained by regulation.

However, taking a longer-term perspective, the Green Party would in the end prefer to see the need for third-tier benefits done away with altogether; but that is dependent on the total reform of the welfare system, a bullet Labour is not yet prepared to bite, as the Budget and this bill make very clear. We look forward to the day when the Social Security Act of 1964 will be thrown out completely by a Government that is willing to start over with an income support framework based on principles of sufficiency, simplicity, and universality. Meanwhile, it is no good getting rid of third-tier assistance while benefits are still too low for people to live on, and it is no good working towards universality if what that means is basic levels are reduced to the lowest common denominator; for example, limiting everyone to the rate of the unemployment benefit. I am grateful that the Labour Government has not headed down that particular path with this bill, and that Labour is evidently committed to making sure no one will lose as the different stages of the legislation are gradually implemented.

The second area I will quickly touch on is the question of how the package does and does not affect beneficiaries who do not have dependent children. Apart from increases in the accommodation supplement, which will apply in a highly variable fashion, according to circumstance, beneficiaries in this category face an uncertain future, especially with the eventual loss of the special benefit, as well. For example, the Wellington People’s Resource Centre believes that a single person with severe disability and low-housing costs could well end up worse off as a result of those initiatives. I would be interested in the Government’s response to that, given its assurance that no one will lose out as a result of the changes announced today.

My fear is for single beneficiaries with high needs, but low living costs, which is a situation for many people in this and other cities. At the same time I also recognise that the benefit system, with all of its layers, and its some 35 different forms of assistance, continues to be used really as a way to subsidise the inadequacies of a health system that often does not treat people well or in time, whether they have physical or mental health problems. The Green Party applauds the Budget gift of more money for joint operations, but this does not solve the much deeper crisis embodied by the fate of tens of thousands of people on a sickness benefit or invalids benefit who are simply not well enough to work, but would love to do so if they could regain their health sufficiently to be able to take on employment.

Finally, I reiterate some frustration on the part of the Green Party—and I have heard this shared by other members in the House tonight—that substantial increases in support for families will take so long to roll out. The people this bill is aimed at helping—low to medium income families—need support now, not later. It would have been great if Dr Cullen could have seen his way clear to using some of his windfall to put a little more than $170 million into this package for the 2004-05 year. I know that a billion dollars, or even $500 million, for this year would have looked uncomfortably like a serious election bribe, but, in fact, that is what the 30 percent of the country’s children who live in poverty need now and not later, if it is to be done at all. This legislation and the family directions package are to be welcomed for the enormous step they make towards restoring a greater degree of equity in our society. I am just sorry that we could not have done it a little more quickly and with less discrimination against beneficiaries and their families.

GERRARD ECKHOFF (ACT) : I have seen something today that I have never seen before, either in this House or outside it. I saw two grey-haired gentlemen stand up for the Government. I saw two sugar daddies. We all know what a sugar daddy is. He is somebody who accumulates wealth in order to receive favours when he dishes it out a little later. Both Dr Cullen and Steve Maharey epitomise the sugar daddies of this Government. Often members of the ACT party are criticised as people who advocate for the rich and who do not understand what it is like to be poor. I am delighted to be an advocate for the rich. I have been a beneficiary. I have been to the public trough and dined there for years. Then my colleague Mr Prebble took away my supplementary minimum prices and I was no longer a beneficiary. I had to learn to stand on my feet, and do members know what happened? The farming and rural industry has thrived to the extent that this Government has not even mentioned it either in this bill or the Budget. That is what happens when people are taken out of dependency.

Members of this Government probably will not understand that, but there are some really frightening statistics that I want to touch on this evening. In 1970, 27 working people supported one person on some form of Government support. That was a ratio of 27:1 in 1970. Thirty years later the ratio has gone down to four working people supporting one person who is on some form of Government support. My question this evening is: where will we be in a couple of years? Where will the ratio be? Will this Government be happy when the ratio is 1:1?

Dr the Hon Lockwood Smith: Look over there.

GERRARD ECKHOFF: I ask Government members to face me and answer my question. Will they be happy when the ratio is one productive person—one working person—to one beneficiary? That is the direction in which that package and this Budget are taking us.

One thing I want to say about the Minister of Finance this evening is that he is a man of his word. I shall read to members this evening the words of the Minister of Finance in his maiden speech: “I am proud of the fact that my secondary education was not paid for by the taxpayers of New Zealand, but by the farmers of Canterbury and Hawke’s Bay. I ripped them off for 5 years then, and I shall get stuck into them again in the next few years.” I have to say that the honourable member has kept his word. He is getting stuck into the lucky ones who have some form of discretionary income.

I have heard members of the Government, United Future, and the Greens say that they do not mind paying tax. They think it is appropriate that those on a reasonable income—a back-bencher’s or Cabinet Minister’s income—should pay tax and more tax. I invite members of the Greens, United Future, and the Government to open their wallets, or to take their chequebooks out of their pockets or wherever, and write a cheque for the consolidated account right now. If they enjoy paying tax and want to pay more, nobody on this side of the House will stop them. I shall pause for a moment and look around the Government, the Greens, and United Future to see how many of those members are prepared to write out a cheque. I do not see any. Lianne Dalziel is writing out a cheque. How the mighty have fallen. It will bounce. I want a cheque that will work. That is one of the great problems we face in this country.

The Government purports to understand the less well off and the poor in this country.

Hon Richard Prebble: In an academic sense.

GERRARD ECKHOFF: That is exactly right. Mr Prebble has stolen my thunder. The Prime Minister and Dr Cullen have studied poor people. They went to university and studied the less well off. They have read books about the poor and those who are on some form of Government assistance. That is the extent of the Government’s understanding of those at the bottom, or near to the bottom, of the socio-economic scale. What is so frustrating for the public of this country—and it is frustrating—is that this Government wants to patronise them forever. They do not want patronage from this Government. They want opportunity.

Essentially, this Government is robbing Peter to pay Paul—the old adage—but it even has a twist on that one. It is robbing Peter to pay Peter. It is taking money away from the earners and putting it through the Government coffers. We economists call it the churn factor, or transaction costs. The Government is taking the money away from Peter, churning it through the Government system, taking off at least 20 percent, then deciding who it will give it back to at some later stage.

The Holmes poll tonight showed very clearly that people have had absolutely enough. When people were asked to vote on whether this Budget did it for them, 8,400 said no and a mere 1,800 said yes. They probably got a free phone call from the Government. But that result is quite astounding. Here we have the Government’s flagship. Today was the great launch of the Government’s flagship. This is how it is going to win the next election, but 8,400 were agin it and a mere 1,800 were in favour. It is quite extraordinary.

Very clearly this Government is in a desperate situation. This bill is a desperate measure driven by desperate people. The truly desperate people in this country are people like Marilynn McLachlan and Tony Gilbert, who were featured in the Sunday Star-Times a few weeks ago. They are the desperate people with four children who cannot make ends meet under 5 years of this Government. It is only a year ago that the Government said that if people earned $55,000 a year then they were rich. The Government has now turned around 1 year later and said: “Oh, gosh, we got it wrong. I’m sorry folks. We’re going to have to take your money away from you again and give you a bit back after we filter it through our own processes. Once we take off for ourselves whatever it is we want, we’ll give you a little bit back.”

I would have thought—and I think that Mr Brown’s amendment is a good one—that it should be immediate. If the Government is so concerned about the less well off, then it will be immediate. The truth is is that it will be October, then April, and then 2007. Such is the Government’s concern about the less well off it is saying: “Wait 2 years. Wait until after the next election and then we will give you some of your own resources back.” That is an outrageous situation. The members of the public who rang the Holmes show this evening clearly understood the largesse of this Government.

LARRY BALDOCK (United Future) : I rise with pleasure on behalf of United Future to speak to the second reading of the Future Directions (Working for Families) Bill. I begin by commending the Minister, Steve Maharey, and many of the staff behind him who have worked very hard on this legislation and on this package, which will make a difference to families in New Zealand.

So far this debate has lacked some of the seriousness it deserves. Some members have surely made comments that they could only be joking about. As the well-known saying says: “It would be funny if it wasn’t so serious.” Families have been forgotten year after year in New Zealand. It has become harder and harder to face the costs of raising children. Our free education system has somehow become more and more expensive, with uniforms, camp costs, school donations, etc., which are things only parents know and understand about. Those costs are borne every year by parents.

This bill is called the Future Directions (Working for Families) Bill, which begs the question of who has been working for families over the past 20 years since 1984. Who has been sticking up for families in this Chamber over the last 20 years? We in United Future are very happy to know that the launching of the Families Commission, which will begin to advocate for families in New Zealand, is only weeks away. We can only reflect on what a difference there would have been in the last 20 years if there had been a Families Commission during the 1980s and the 1990s. We would not have had a situation developing like we do today where couples, under more and more stress, are waiting longer and longer to begin to have families.

Earlier tonight the Hon Richard Prebble made the most derogatory statement I have heard for some time. He said the poor would breed more, as though that were a crime. I remind him, and other members of the House, that the United Nations declaration in 1948 stated that every man and woman would have the right to marry and raise a family, and to have an income that would be able to sustain that family. It was not a right given just to the rich. It was a right given to every man and woman in this country and in the world to raise a family and to be able to support that family.

I am glad, personally, that the poor do have children. My parents were poor, and I am very glad that they decided to go ahead and have children. Maybe the honourable member Richard Prebble’s parents were poor, also. I do not know. But I am sure many other members in this House had very humble beginnings, and we are glad that their parents had the courage to still go ahead and do one of the greatest things any couple can do in the world—that is, to raise children. So many great men and women whom the world admires have been born into poor families, often number 10 of 13 or number eight of 10. No one should ever talk about the poor breeding like rabbits. It is a disgusting term. I have heard the rumour that the Gilbert-McLachlan family from Waihī are ACT supporters. I cannot understand why they would be. As they look at those four great kids they are trying to raise, I can only imagine how they might feel tonight, knowing that the leader of ACT has said that they are breeding like rabbits.

Hon Richard Prebble: No, I didn’t!

LARRY BALDOCK: He said that poor people would breed more because of this bill. We had better hope that this bill and the Budget today do encourage more couples to take the steps of faith they need to have children and to embark on the greatest adventure and ambition—to be parents.

Our future as a nation is dependent upon families. During the century we now live in we will see, according to demographers, the world population decline. That is something many people have not yet begun to get their heads around. We in United Future are not speaking up for families because of some warm fuzzies we have about families but because it is essential to our survival as a nation, and for Western democracy and our civilisation. Either we support families and spend on them so they can be strengthened, or we spend more and more each year on the costs of family breakdown. We already spend $6 billion in this country on family breakdown. How can we mock spending the kind of money that is being released in this Budget to help build stronger families in this country when we know it will make a difference?

We need families to succeed: we need wealthy families to succeed and we need poor families to succeed. When Richard Prebble is old and infirm—no one should say that that has come already—and in some private hospital somewhere, and he looks out from under his blankets to see who is taking care of him, it will probably be the child of some poor family whose parents had the courage to still go ahead and have children, because that is the most important thing we do. In Richard Prebble’s ideology and theory, that child’s parents should not have ever had kids. They should not have bred, as he said so derogatively.

United Future welcome this bill and the assistance it will provide for families. Perhaps as important as the financial assistance that this bill will give is the encouragement it may send to low and middle income families that finally someone in this place is working for families.They have been forgotten by the previous two Governments. It is commendable that New Zealand First, the Greens, United Future, Labour, and the Progressives are putting aside petty politics to support this; although Peter Brown disgraced himself earlier and began to engage again in petty politics by taking cheap shots at a definition of “family” that he knows makes no sense whatsoever. The only thing he should put into his mouth, according to my dear mother, would be some soap right now to wash it out.

I believe that all of us—New Zealand First, the Greens, the Progressives, and ourselves—would have recommendations to make to Labour as to how this package might be delivered differently, but the point is that it is time for us to stand together for families and deliver something for them. I would have liked to see the assistance begin now, not in April and October next year, but at least we are beginning, and that is the important thing. This is not a time to let ideology get in the way of addressing the concerns of good working families in this country.

So United Future will be very pleased to support this legislation, and we commend it to the House. As we go through the Committee stage, may we give this bill the respect it deserves.

Hon RICHARD PREBBLE (Leader—ACT) : I raise a point of order, Madam Speaker. I raise this point of order under Standing Order 106, “Misrepresentation”, which states: “(1) A member who has spoken to a question may speak again to explain some material part of the member’s speech which has been misquoted, misunderstood or misrepresented in the same debate.” I cannot speak in this debate because the ACT party does not have a place, but I have now heard two United Future members state to the House that I made statements that poor people should not breed. In fact, most of the member’s speech was devoted to that.

I have gone back and checked my Hansard to see whether I made any such statement. There is no such statement in the two representations I have made today, and if the member wants to know exactly what I did say, I replied to an interjection from Mr David Cunliffe: “I say to Mr Cunliffe, the Liberal Party in Australia put forward a benefit breeding programme, where the Treasurer said: ‘This is a policy that is going to encourage people to have kids.’, and what happened to that party’s popularity? It went into free fall.” I do not see how those words can be interpreted as me saying to this House that poor people should not be able to breed.

Hon Dr MICHAEL CULLEN (Leader of the House) : That is not how that Standing Order is interpreted. The member knows very well—he has been here a long time—that when he uses that Standing Order, he has to quote the words that were used—

Hon Richard Prebble: I just did.

Hon Dr MICHAEL CULLEN: —no—and to state that those words were incorrect, and not then to engage in an argument, as the member did subsequently.

Hon RICHARD PREBBLE (Leader—ACT) : I quoted exactly from my Hansard: “I say to Mr Cunliffe, the Liberal Party in Australia put forward a benefit breeding programme, where the Treasurer said: ‘This is a policy that is going to encourage people to have kids.’ , and what happened to that party’s popularity? It went into free fall.” I am saying to the House that nowhere in my speeches have I said what both United Future MPs have repeated to the House—that I made a statement that poor people cannot breed. I just say to the House that I come from a genuinely poor family, and I find the United Future party’s attacks on me to be outrageous.

Hon Dr MICHAEL CULLEN (Leader of the House) : That member knows very well how that Standing Order has to be applied: he merely states what was claimed to be said. He then says what he said, and nothing more than that. He does not engage in further argument as he has now done twice.

Madam DEPUTY SPEAKER: Speaker’s ruling 35/1 states: “A member who has been misrepresented must wait until the end of the speech of the member concerned before rising to make an explanation even though the speech in which the misrepresentation is alleged to have been made has been interrupted by the adjournment on a Friday and is not concluded until after the resumption of the debate on the following Tuesday.” The point is that the misrepresentation Mr Prebble has alleged could have been dealt with in debate, and should—

Hon Richard Prebble: I’ve got no call left. Don’t be ridiculous!

Hon Dr MICHAEL CULLEN (Leader of the House) : The member raised a perfectly legitimate point of order, which was to say that he was misquoted in debate. The remedy a member has under the Standing Orders is to simply rise, state what the misquotation was, state what the actual statement was, and that is the end of the statement the member may make. He may not engage in further argument, which is to engage in further debate at that point. It is sufficient to simply state what was said, rather than what is claimed to have been said. That is the Standing Order and the ruling on that matter.

Hon RICHARD PREBBLE (Leader—ACT) : I actually agree with Dr Cullen’s interpretation of the Standing Order, and that is what I believe I did. I think we can now proceed.

HELEN DUNCAN (Labour) : Budget day 2004 is a great day for New Zealand and particularly for New Zealand families. The Working for Families package that is at the centre of the measures announced today will make a huge difference in the lives of low to middle income workers. These people are the big winners from today’s Budget, and I think that is just great. More than 60 percent of working families will be better off as a result of this Budget. Those in the $25,000 to $45,000 income range will be better off by up to almost $100 a week. The average increase will be $66 a week—a hugely significant increase that will make a real difference to the standard of living of these families.

As the advertisements say: “But wait, there’s more.” Increases to childcare assistance will provide an average $23 a week per child, and even that is not all. Increases to the accommodation supplement will give an average $19 a week more. This money is going where it will do the most good and make a real difference. It is not going into the pockets of the well-off, as tax cuts do. No, this money is going to help the Kiwi battlers and to fight child poverty. If, as the Prime Minister said, we use the measure of 50 percent of median income as the threshold, the percentage of children lifted from poverty is a staggering 70 percent. I think that is fantastic.

The Budget helps families in other ways, too. As someone who has a keen interest in education, I am delighted with the wonderful improvements in the provision of early childhood education. The rates of subsidy will increase significantly, and lots more families will be entitled to receive the subsidy. At least 33,000 children will benefit from this provision.

There is another improvement that will be very much appreciated by New Zealand parents. Up until now, free early childhood education has been provided only through the kindergarten service. But this Labour-led Government is extending this to all community-based childcare centres. From mid-2007, all 3 and 4-year-old children will be entitled to 20 hours of free education. I know that will be appreciated by parents, and I also know it will ensure that quality early childhood education and care is available for all children. That will provide a great start for those children and, as research shows, it will benefit them right through their educational lives.

Of course the National-ACT Opposition does not like this bill! It does not want to help low and middle income families. It only wants to give tax cuts—tax cuts that deliver the most to those who need it least. Those members want to look after their mates on the high incomes. They do not care about hard-working, low-income New Zealanders. The National-ACT Opposition also wants to cut the corporate tax rate, so that overseas investors are better off and more money flows off shore. Well, how sensible is that?

I tell those members that this Labour-led Government cares about hard-working New Zealand families, and we are going to look after them. The Future Directions (Working for Families) Bill is great policy, and I am proud to be part of a great Government that is making a huge improvement in the lives of New Zealand families.

I want to thank Dr Michael Cullen and the team of Ministers who have produced the best and most forward-looking Budget we have seen in New Zealand for decades. It is brilliant, and I am proud to be a part of this Government.

KATHERINE RICH (National) : That member says this is a great day for New Zealand. Well, I wonder which alternative universe she has been in over the last few hours. Obviously she did not watch Holmes, where it was quite clear that most New Zealanders looked at this Budget and realised the emperor had no clothes, and there was nothing in the Budget for them. Steve Maharey must be absolutely gutted. This was supposed to be the great day for the launch of the vanguard of Labour Party policy. This Budget was supposed to be the flagship of Labour Party policy, and what did we have? We had had a comedy of errors. The day just has not gone Labour’s way. It started off at about 11 o’clock, when at the Dunedin lock-up the representatives of the social services sector were accidentally locked up 2 hours before any of the Budget presentation. People turned up at 11 o’clock, thinking that they were going to have a presentation from the Minister with all sorts of coffee, tea, and savouries, and were told that nothing would happen until 1 o’clock. Well, boy, were they annoyed! The Labour Party has made itself a laughing stock by forcing some very productive people in my city to sit around and twiddle their thumbs. They said, ladies and gentlemen, that the savouries were not even very good, either. That was 2 hours of wasted time.

The second part of the comedy of errors was, of course, some of the information that was put out with the Working for Families Budget special. I want to turn to the example of Aroha and Robert. Aroha and Robert earn $37,000. They have two children, one aged 4 years and the other 16 years. The piece of paper I am holding states that in 2007 they will be better off by $163 a week. The problem is that the Labour Party forgot that 16-year-olds actually age over the years: that 16-year-olds actually become 19-year-olds by 2007, and are not eligible for those particular parts of the benefit. I would like to thank Mandy at the 0800 number for Working for Families, who did some homework and realised the scenario was wrong. Well, if that is wrong, what else in there is wrong? We wonder what other misleading information is out there. I think New Zealanders can see through the Budget, and that is what we have seen tonight.

Only one in five families will benefit from this Budget, and that is why we have seen only one in five people ring up the Holmes show—probably most of them from Michael Cullen’s office. The Government must be absolutely gutted. Here we have the flagship Budget—the big day when people were all going to become excited, and everyone was going to love the Government and be grateful to it—and New Zealanders have seen right through it. Members on the Government side of the House thought they could flash all that cash around, handing back the money taken from hard-working taxpayers, and somehow supposed taxpayers would be grateful for that. That shows the arrogance of Government members. They think hard-working New Zealanders should be grateful for getting their own taxes back. That is why Don Brash called the Budget a cynical ploy, and a cynical attempt to win votes. Otherwise, why did the Government not do it in its first 5 years in office? And why do some of these things not come in until 2007?

In fact, the important issue today is why we are here in urgency. We are not passing any legislation that requires a change to be made overnight. We are not changing the taxation system.

Hon Dr Michael Cullen: It’s about time you did some work, young lady.

KATHERINE RICH: I say to Dr Cullen that some of these changes do not come in until October. This urgency is all just part of the performance, to give the impression that we are doing something urgent and important. It seems the only thing the Minister is worried about is that people may go out and sign up on a benefit before midnight. If we look at the people who will benefit most from this measure, we see most of them are already dependent on the State.

I say that making more New Zealanders dependent on the State is no vision for New Zealand, and that making more middle-income New Zealanders reliant on the Government for a State handout is no vision for this country. Even the mother in the family from Waihi said she would prefer to have her money back in the hand than to receive a handout from the Government. That is one of the things this Government has not quite got. People want to be able to make their own spending choices, not the spending choices directed by this Government. The free childcare package was launched today with much fanfare. It was bit like paid parental leave, actually. The Government launched it thinking that everyone would be excited about it, but there are thousands of families who will miss out. The free childcare is only available to families who go to community-based early childhood education.

Hon Maurice Williamson: How many do that?

KATHERINE RICH: It is about 40 percent of the early childhood education providers. Parents like choice. They like the idea that they can determine where their children will go to for early childhood education, be it kindergarten, Montessori, a community centre, or a private centre. Ideology has driven that provision. That is why the 20 hours of free childcare is not available to parents who have their children in private facilities, and that is a joke.

It is an arrogant assumption that New Zealanders will be wildly grateful to the Government. I think we have seen tonight that New Zealanders can see through this Budget. They can see it is a cruel hoax, and they will not benefit from it. Four out of five families will be no better off as a result of this Budget. The Government thought those four out of five families would somehow be grateful for the benefits that will accrue to the other one out of five families. It does not work that way, and New Zealanders can see it is a cruel hoax. It is income-churning at best—taking the money off families by overtaxing them for the last 5 years just to hand that money back, so this Government can determine the spending decisions of New Zealanders and continue its social engineering agenda. That is what this Budget is about. This measure is not about welfare reform; there is very little in it to do with welfare reform. Where is the miraculous universal benefit that Michael Cullen has been talking about since 1990, and that Steve Maharey said would be in place by 2002? It has not happened. Every time the Social Services Committee asks about that, they say they are working on it. The Budget documents today stated they are working on it. I think the Minister has worked out that it is a helluva lot more complex than he originally thought.

The incentives announced today make welfare more attractive for some people. What we have seen today will entrench welfare dependency further in this country, rather than reduce it. That is why this Budget is a cruel hoax. Future Directions goes in the wrong direction. That is why, in terms of replacement legislation, National has its own ideas on how to take people from welfare and put them into work, and on how to support those families. National’s ideas will be far more effective than some of the trash that has been served up today. This is a cruel hoax. The Holmes poll was a good indication of how most New Zealanders see this Budget, and Dr Cullen must have been very upset to see that flat in the face on television tonight. It will be interesting to read the editorials and the letters to the editor. We will see more New Zealanders realise the emperor has no clothes.

Hon MARK GOSCHE (Labour—Maungakiekie) : I was hoping that somebody out there might be listening to my speech, but after that performance from Ms Rich there is no show of that. People will all have turned off their radios and gone back to bed, and I do not blame them for doing so. They have just heard the revisiting of the class wars: the rich versus the poor. National Party members will abdicate responsibility, and will all resign and let Paul Holmes run the country by telephone poll. That would be a lot cheaper than having those members over there on the Opposition benches being paid for doing nothing. So it is probably not a bad idea for them to rely on the Holmes poll to come up with their policies. There was not one idea in the 10 long minutes of that speech on the bill from the Opposition spokesperson on social welfare. At least we know what the ACT party believes in. At least we can argue with its members about what is better for people, based on ACT’s policy of a 20c in the dollar flat taxation rate. But with National, we have a leader who—

Hon Dr Michael Cullen: 11percent for that family in Waihi.

Hon MARK GOSCHE: It would be 11 percent. Well, that would pay for a lot of health services! People would not have to worry about getting their hips and their knees replaced. They would never get anything replaced under a National Government, with an 11 percent taxation rate to give to the family in Waihi what this Government has given it.

It is no wonder Don Brash is scratching his head and trying to figure out what to do. He has already committed the National Party to a policy of no tax cuts—none at all. The National Party says it will look after low to middle income workers, but it does not have any policy that could be described as saying how it will do that. At least ACT says that on a 20c in the dollar flat taxation rate, that family in Waihi would be $39 a week better off. The ACT party will go out there and sell that. Its members will say if people vote for ACT, it will give them $39 a week. ACT will tell people not to vote for Labour, because the miserable people in Labour will give them $150 a week, which they do not need. ACT will say it is much better to have no health services and no education services and to be given 39 bucks for that, as against the Labour - Progressive Coalition Government’s giving people $150. ACT will have to take another Holmes poll on that one, to see whether it has it right. Maybe ACT will figure out that it is wrong, but we do not know that.

Maurice Williamson will tell all the people in his electorate he is opposed to people getting $150 a week. He will tell them he knows what is best for them, and they should not receive more for their accommodation supplement. Maurice Williamson will give them nothing. If people vote for Maurice Williamson, he will give them nothing. But he will tell people not to dare to vote for the Labour - Progressive Coalition Government’s Budget. The National Party talks about ideology. Talk about dumb! National members are going to vote against this bill on the basis of ideology, because it gives workers, families, and children over $50 a week, when they are promising them nothing and ACT is promising them 39 bucks a week. I do not think I have to speak any more, because those people over there on the Opposition benches have said it all for us.

LINDSAY TISCH (Junior Whip—National) : I seek leave for the eleventh call in this debate to be split between New Zealand First and National, with National having the first call.

Madam DEPUTY SPEAKER: Leave is sought for that. Is there any objection? There is not.

Dr the Hon LOCKWOOD SMITH (National—Rodney) : Let me first make it very clear that National cares deeply about low to middle income working families. And let me point out how much Dr Cullen and Labour care about them, because the families who are most disadvantaged in New Zealand at the moment are those where there is a couple with one person working on, say, $10 an hour. After that person has worked for 8 hours, in order to get another dollar in the pocket at the moment he or she has to work 49 hours a week. Now, has Labour done anything tonight to fix that problem? Labour is to do something in 2006 to help that family. But if Dr Cullen and Labour cared at all about low-income families, they would do something tonight to help that family. How is it right for a family, after 8 hours’ work at $10 an hour, to earn a certain amount of money and not to earn another dollar till the income earner has worked 49 hours a week? The Government is changing the abatement rate. This bill does change that rate, but when does it do that? It does it—

Hon Maurice Williamson: Midnight tonight.

Dr the Hon LOCKWOOD SMITH: Not midnight tonight. When is the Government to help that low-income family? In the explanatory note of the bill it states that it will be on 1 April 2006.

What the arrogant Dr Cullen does not seem to understand is that there are other ways of helping low to middle income families. This is the most stupid way to do so, because it turns tens of thousands more hard-working New Zealand families into beneficiaries. That is what is so wrong with this bill. Dr Cullen sits there and says the only way National would do that is by changing the taxation rates, which would cost billions and give tax breaks to people who do not need them. All I can say to people like Steve Maharey and Dr Cullen is that they should think a bit more about how they could be innovative regarding taxation. They are clearly so arrogant they have not thought the thing through. There are other ways of delivering support for low to middle income people, but to tax them, then give money back to them, and expect them to think that is great is just stupidity. Yet that is what Labour is doing. It is taxing people more, because with bracket-creep low to middle income earners are paying more and more in tax. With all the new taxes that Labour has introduced, people are paying more and more in tax, and the Government, instead of reducing tax, says that it will pay that money back. It has even changed the name from tax credit to “in-work payment”, or something. I cannot believe that Labour thinks the people of New Zealand will buy that one—that on one hand they are taxed more, and then on the other hand a couple of years later they are given a little bit of that money back. The Government wonders why it is that on the Holmes show four out of five people do not like it, and only one in five says it makes sense.

The disgrace of what Labour is doing in this measure is that there are low to middle income families that are hurting. They are hurting right now, and hurting very much. But the disgraceful thing about this legislation is that the families that are hurting the most will not be helped for a couple of years. That is the disgraceful thing, because the abatement arrangements hurt people who are trying to get off benefits the most. That is because of the way the benefit abatement interacts with the family support tax credit, and Labour is not changing that till 1 April 2006. That is a disgrace! It shows the Government does not care about the families who are hurting the most. It is throwing out a couple of little crumbs from 1 April next year, but is doing nothing serious to help those families until 2006. It is no wonder people are not supporting this legislation tonight.

• Sitting suspended from 10 p.m. to 9 a.m. (Friday)