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Source: New Zealand Parliament – Hansard

Question No. 2—Prime Minister

2. CHRISTOPHER LUXON (Leader of the Opposition) to the Prime Minister: Does she stand by all of her Government’s statements and actions?

Rt Hon JACINDA ARDERN (Prime Minister): Talofa, Mr Speaker. Yes. In particular, I stand by this Government’s decision to increase Pharmac funding by an additional $191 million in Budget 2022. We’re seeing the benefits of that investment. I welcome today’s announcement from Pharmac that they’ll be able to fund two new medicines: SPINRAZA for spinal muscular atrophy and adrenaline auto-injectors, often known as EpiPens, for people at risk of anaphylaxis or life-threatening allergic reactions. These medicines are the direct result of funding committed by this Government. Our Government takes funding medicines seriously. As a result of our funding increases since 2017, Pharmac has made 189 additional funding decisions, including 59 new listings and the widening of access to 130 treatments. But we know there is always more to do; that’s why this Government remains committed to funding our essential public services, including Pharmac, and not funding to borrow tax cuts for the wealthiest New Zealanders.

Christopher Luxon: Why is the Government planning a $3.5 billion jobs tax to fund its income insurance scheme when it’s already raking in $40 billion more in tax each year compared to when it took office?

Rt Hon JACINDA ARDERN: Again, as I said yesterday, the member’s characterisation of social income insurance I reject. The second point I made yesterday is, of course, we continue to do work on the detail of the regime, but it has been worked through alongside Business New Zealand and trade unions in response to the environment where we will continue to see New Zealanders having to transition a future through where we’re working to make sure that our economy is more sustainable. There was a time when that member was part of a business advisory council that was quite focused on transitioning a just transition for workers. In fact, he joined a study mission to Switzerland, where this proposal is one of the outcomes that Business New Zealand then pursued.

Christopher Luxon: Can she explain to supermarket workers why she’s pushing a scheme the owners of Countdown say will “take much-needed earnings from our team members’ take-home pay, to fund a scheme that they will most likely never need, or ever see the benefit of.”?

Rt Hon JACINDA ARDERN: Every year, 100,000 New Zealanders—in average times—face job loss; 200,000 through a period of disruption like a global financial crisis. Unfortunately, in a short period of time, we’ve seen everything from the Christchurch earthquakes, to the global financial crisis, to a pandemic. I wish it was possible to say that workers will not experience such severe disruption; they have. In those times, Government has stepped in. We are looking for a more sustainable long-term way, as most OECD nations have, to ensure that New Zealanders are well looked after.

Hon Michael Wood: Has she seen the statement from FIRST Union which represents supermarket workers saying, “The tripartite agreement between business, government, and unions regarding the creation of a social income insurance scheme is crucial to support people when they need security most.”?

Rt Hon JACINDA ARDERN: Yes. Of course, that sits alongside the work we’ve done with the Council of Trade Unions in developing this scheme. But I also note that Business New Zealand has been part of the development as well. I take this quote, for instance, from Business New Zealand: “When these businesses shut down, workers have little money to spend, which means other businesses suffer and the community go into a long-term economic decline lasting for generations. An income insurance scheme could cushion workers and communities from such abrupt income losses, allowing more time for regions and businesses to adapt.”

Christopher Luxon: Why is she proposing to reduce Kiwis’ take-home pay when their real incomes have already fallen by 3.7 percent over the last year?

Rt Hon JACINDA ARDERN: As I said yesterday, whilst we continue to work through the details of this scheme, implementation would not be anticipated to be any earlier than 2024 or 2025. The reason that we highlight that is, of course, we’re very aware of the economic times that we are in, the disruption that many New Zealand families have experienced, and, of course, that is why we have our strong cost of living package to support them. I would then make a wider point here: it has always been Labour Governments that have introduced those things that support families and workers in tough times. Whether or not it’s KiwiSaver or the Super Fund, Labour introduces it, National opposes it, and then they do nothing about it in the future; they keep it because they eventually recognise the support that it provides New Zealanders.

Christopher Luxon: Does she accept that if the Government tries to tax both workers and employers, most of that tax will end up being paid by workers through lower wages or by consumers through higher prices, and, if not, who does she think will pay it?

Rt Hon JACINDA ARDERN: I reject much of the premise of that question. I again point to the fact that, in some form or another, there are schemes like this in Denmark, Austria, Finland, Netherlands, Norway, Sweden, Switzerland, Canada, the UK, and Germany. Many of the countries that we would liken ourselves to, and, in fact, that the member himself went across to study, have a scheme such as this.

Christopher Luxon: Is the Government still committed to passing the income insurance scheme legislation before the next election?

Rt Hon JACINDA ARDERN: If the member had listened to my answers repeatedly in this House yesterday and today, we do not foresee it being implemented any earlier than 2024 or 2025.

Christopher Luxon: Is the Government still committed to passing a first reading of this legislation before the next election?

Rt Hon JACINDA ARDERN: Yes, but the time at which it would be fully implemented, we would not anticipate being before 2024 or 2025.

Christopher Luxon: Has the Government ruled out reducing income tax or company tax to offset the $3.5 billion cost to the jobs tax?

Rt Hon JACINDA ARDERN: The member is making assumptions, when we continue to work through the final details of the levy. Again, I would also point out that the way the member frames this scheme makes an assumption that at times of crisis, when we have implemented this scheme, that that does not come at a cost to taxpayers; it does. We have had to, through times of crisis—and the National Party has been in Government when that has occurred—implement schemes to cushion the blow and stop the large scarring that we see in our economy. We are looking to build a sustainable way of ensuring we have those schemes through future times of crisis.

Christopher Luxon: When she said that final decisions have not yet been made about the income insurance scheme, does that include the decision to tax workers and employers, or just the decision about the size of the tax?

Rt Hon JACINDA ARDERN: Again, I’ve never heard the member talk about the ACC tax. These are schemes that are designed to go directly into providing support. It is not about increasing Government revenue; it is about directly funding a scheme that benefits wage and income earners directly. It goes entirely into supporting workers and active labour market schemes—something that when the member was a CEO, he used to support.

David Seymour: If the Government’s proposed income insurance levy is not a tax, will people be able to opt out of it voluntarily?

Rt Hon JACINDA ARDERN: Again, I likened it to ACC for a reason.