Cunliffe David: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Cunliffe David: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 18 August 2010. Volume:665;Page:13201. Text is incorporated into the Bound Volume.] 
4. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister of Finance 
: Does he agree with all of the Prime Minister’s statements on compulsory savings? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes. 
Hon David Cunliffe 
: Does he then agree with the Prime Minister that “KiwiSaver shouldn’t be made compulsory” because it “goes against the National Party grain”? 
Hon BILL ENGLISH 
: I think the member will be aware that the Government is likely to establish a working group on savings which will look at a range of issues KiwiSaver among them. It is quite important that we understand that New Zealand needs to improve its national savings. The Prime Minister has always been a strong advocate of that point of view. 
Hon David Cunliffe 
: Will the terms of reference for the Minister’s savings working group reflect his statement: “Forget it. We’re not doing compulsory super; we’re not talking up incentives.”? 
Hon BILL ENGLISH 
: The member will have to wait and see what the terms of reference are but they will follow the practice that this Government has followed on important issues which is to have a very open policy process where all points of view can be aired. In the end the Government will make some considered and very well-balanced decisions aimed at improving our economic performance. 
Hon David Cunliffe 
: Translated does that mean that this is simply another U-turn after those on the financial hub mining schedule 4 land and overseas investment; and when will the Government instead present a real plan for an economy struggling with rising unemployment and falling business confidence? 
Hon BILL ENGLISH 
: No. What it means is that the Government is taking seriously the long-term effort that will be required to deal with the habitual problem New Zealand has had of low levels of national savings which were made considerably worse by the damage done by Labour’s mismanagement in its last 3 or 4 years in office. 
Hon David Cunliffe 
: Is the Minister saying that National does in fact not have a policy and that it is a “blank sheet” or is his policy simply to destroy the savings advances made by the previous Government like KiwiSaver and the pre-funding of New Zealand superannuation? 
Hon BILL ENGLISH 
: No. The Government is indicating that on this substantial issue it has already taken a significant step with its tax changes in the 2010 Budget which are designed to reduce the incentive to consume too much and to borrow to pay for it. The indications are that New Zealand households at least are changing their ways and increasing their savings rate. The next step is to see whether we can push further in the same direction. 
Peseta Sam Lotu-Iiga 
: Why is it necessary to lift national savings? 
Hon BILL ENGLISH 
: I think the most obvious reason is that we now owe $170 billion to overseas lenders. Over the next 4 or 5 years it is projected to reach $250 billion which in American numbers is a quarter of a trillion dollars. That is a very large liability and we need to turn it round. One way we can turn it round is to lift levels of national savings.