Sitting date: 16 September 2025

INCOME TAX (FAMILYBOOST) AMENDMENT BILL

Third Reading

Debate resumed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Ricardo Menéndez March: Tell us why.

Dr DAVID WILSON: I just did.

ASSISTANT SPEAKER (Greg O'Connor): A five-minute call—Ricardo Menéndez March

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

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

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

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

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

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

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

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

Hon Nicola Willis: What, so you want the really, really rich people's kids to get it? Where's your socialism now?

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

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

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

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

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

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

Hon James Meager: Big fat lie!

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

ASSISTANT SPEAKER (Greg O'Connor): Before I call the next member, Mr Meager, you heard the Speaker before. There will be a ruling on the use of that word. Refrain in the meantime.

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