Taxation (Annual Rates and Urgent Measures Bill)

First Reading; delivered at 5.50pm; Wednesday 16 November

Tariana Turia, Co-leader, Maori Party

I rise to the call on behalf of the Māori Party to speak to the Taxation (Annual Rates and Urgent Measures Bill).

We support this Bill in light of the commitment to a full interest write-off for student loan scheme borrowers; and also to support the expansion of the Working for Families Package.

We do, however, have some serious reservations regarding the need to respond to the most vulnerable, the poorest families, and in particular the tamariki who are severely affected by the trauma of poverty.

Student Loan Scheme

Our Party supports the introduction of a full interest write-off for student loan scheme borrowers.

We have consistently argued the need to respond to the huge number of past, current and future tertiary students with loan debt. We believe that the eight billion dollar student debt is a huge barrier to learning for the next generation.

If we are serious about supporting our rangatahi towards making a successful transition to parenthood, home-ownership, financial security and community mindedness, we need to demonstrate the willingness of the state to invest in education as a public good.

In particular, our concerns are with the fact that Maori student debt is escalating at a greater rate than non-Maori student debt. This is due to a number of factors:

A greater proportion of Maori are undertaking tertiary education - more than any other group;

A greater proportion of Maori students take out a loan (reflecting socio-economics);

Maori earn significantly less than non-Maori after graduation;

And because of this, repayment times for Maori are significantly longer, and with accumulated interest, pay significantly more than non-Maori for their education.

While the interest-free loan scheme legislation will alter things, and is a significant step in reducing the student debt crisis; the fact still remains that more Maori will hold a debt and will take longer to pay it back because they will earn less.

Debt limits the ability to get credit for some of those things we all consider to be necessary to enable us to participate as citizens within Aotearoa -things such as a warm, secure home.

We would support this Bill being passed through as quickly as possible in order to ensure students receive the vital support they require as soon as possible.

It is my firm belief, that education should be free and should be seen as an investment not only in our future but in the future of this country.

Turning now to the expansion of the working for families package.

The Māori Party is very pleased the Bill introduces additional targeted tax relief to 160,000 working families. While the size of the tax reduction will differ for different families, it will average around $50 per week and there is no doubt that this will make a difference.

Our concern is, however, for the many families and the children therein, who will not receive the benefits of this package.

The Māori Party recognizes some very serious reservations in the effectiveness of this Bill to offer relief for those who most need it - benefit dependent families.

The Working for Families package is targeted relief for those families engaged in either part-time or full-time paid work. What this means, in effect, is that the ‘expansion’ offers nothing to the 250,000 poorest children in Aotearoa.

This is despite the Prime Minister’s statements yesterday that addressing child poverty should be a high priority for this Parliament.

I am sure that the issue of child poverty will be of particular interest to the Special Rapporteur on the human rights and fundamental freedoms of indigenous peoples, in his visit to New Zealand this week. We know that more than one in five children live in low income families - which is nearly twice the level of the late 1980s.

If we were to really see child poverty addressed the Māori Party would expect to see a number of specific strategies in place. The strategies that we present include:

 to establish a poverty line in Aotearoa and monitor it with living standards assessment each year;

 to set agreement on a specific target-date to reduce child poverty;

 to review the Child Tax Credit to ensure children of parents’ whose income includes benefit assistance are also supported within Working for Families package.

Madam Speaker, the poor are not responsible for being in poverty. They did not create the conditions in which they find themselves today. We need to consider that today’s political solution is an attempt to correct yesterday’s political solution which in fact was a failure - but was claimed at the time as ‘the Mother of all solutions’.

It is an indictment on both Labour and National Governments, that besides inflationary adjustments, core benefit levels have not changed since 1991.

Our preference would have been for lower taxes for these families. We cannot understand why it is that tax is taken from a low wage worker and then given back to them, under another name.

What this does is create the perception that this is a benevolent Government. This Government wants to present itself as caring for the working person. Yet it does not want to care for our poverty trapped children of beneficiaries.

All this package does is to continue to entrap workers in welfare - rather than giving workers a sense of pride in saying that we earnt this money.

By the Government redistributing the tax, they deny the initiative, entrepreneurship, and creativity that should be rewarded by a higher working pay.

Those who have only just escaped are actually being re-entangled back into the welfare net, just as our old people used the hinaki to entrap a slippery, slimy eel.

Should not the focus be on helping people out of the net; as opposed to what is currently being done, and that is trapping them back into the net?

This whole package is designed to force beneficiaries to become the working poor.

To join their many kith and kin who my former colleague, Parekura Horomia, in referring to our people, frequently says that they are the working poor.

He knows this well because the wall of wood which was supposed to descend from the East Coast is actually a barrier to forestry workers earning a decent living wage while employed in a highly dangerous occupation. Their level of remuneration does not reflect the danger of the work that they do. The Minister of Maori Affairs knows this.

Madam Speaker, this is a War that is being waged on the Poor.

What hope is this Government offering to those who are more than willing to give a decent day’s work for a decent day’s pay?

How will this Government explain to the many workers in this country, that if they work hard, they will be able to enjoy the fruits of their labour when we all know, that many people have worked hard and as my colleague and co-leader Pita Sharples stated in his Maiden Address today, many of the hard working people in his electorate can never afford a home in Kohimarama. How do we explain that away?

Finally, the Maori Party will support the Taxation (Annual Rates and Urgent Measures Bill) going through to select committee where we hope that many of these issues raised today, will be discussed in more depth.

Na reira, tena tatou.

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