Ryall Tony: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
Ryall Tony: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
[Volume:639;Page:9446] 
Hon TONY RYALL (National—Bay of Plenty) 
: 
 I am pleased to be able to take a call to oppose the progress of this bill which frankly will not be good for New Zealanders. This is a bill that will send a very bad message to low-income New Zealanders. These are the people who cannot afford to save for their retirements. These are the people whom Labour came to Parliament to represent. 
Let us think about those people who voted for Labour at the last election—the few low-income people who voted for Labour at the last election. They find it difficult to make ends meet. They are working in jobs that in Australia would be paid one-third more. 
Hon David Carter 
: More—50 percent more. 
Hon TONY RYALL 
: The Hon David Carter says they would be paid 50 percent more. They are people for whom $10 or $20 per week is a lot of money. In fact one of my colleagues went to a breakfast today held by a public health association and a woman stood up and said that for $10 or $20 per week she could feed a family for 3 days. She asked whether the Labour Party realised that $20 per week pays for 10 loaves of bread quite a number of eggs and a lot of other produce that families can have. Those families are not in a position to take the benefits of the KiwiSaver scheme. 
I ask Labour members to take a call to explain to me how they will tell the people at the Otara flea market on Saturday that KiwiSaver incentives will work for them. What those people in Otara need are higher paid jobs and lower personal taxes. Those are what will get those people ahead: higher paid jobs and lower taxes. This bill provides neither of those. 
What this bill will do is actually lower their pay increases in the future because Dr Cullen stood up and said that the compensation for the employer contributions will be pay increase sacrifice. So what happens if someone is one of those low-income people who cannot afford to save in KiwiSaver but his or her employer says they will not give him or her a pay increase because it is going into KiwiSaver contributions? I ask members to remember that this Government has all of these low-income workers tied up on multi-employer collective agreements so what goes for one goes for the other regardless of his or her circumstances. This Government is saying to those low-income people that when their multi-employer collective agreement is negotiated their employer will hold back an increase in order to allow for the KiwiSaver contributions. But most of those people will not be making KiwiSaver contributions. They will not get the pay increase they need to help them and their families survive. 
What the Labour Government will say to those people at the Otara flea market this weekend I do not know. What it will hope is that they have not worked out that all of this KiwiSaver hype—all the hundreds of millions of dollars—will do nothing to help low-income people which the Labour Party says it represents. It will in fact harm the chances of hard-working people getting ahead. Because if somebody is in one of those low-income families—as the woman was at the public health association’s breakfast this morning which was attended by Paula Bennett—he or she wants lower taxes in order to get more money for the work that he or she does and his or her wages to go up. This bill does not allow or provide for either of those things. 
Darren Hughes 
: What happens when you turn 65? 
Hon TONY RYALL 
: Well if someone has not contributed anything then there is no difference at all. What I will be really interested in hearing from the Labour members in this debate is how this bill matches Dr Cullen’s comments that this will help the affordability of superannuation in the future. What does that mean? Do not forget that affordability of superannuation in the future is driven by national superannuation payments. National superannuation is not means tested. Will we end up with means testing based on one’s contribution to KiwiSaver? That is the only way the Government can say that there is improved sustainability of national superannuation payments if it is going to means test the superannuation when people are 65. Is that what Labour means? 
How can Dr Cullen say that this will contribute to sustainability of superannuation if it will not have any effect on national superannuation? It cannot contribute to the sustainability of superannuation payments by the public unless there is substitution of KiwiSaver income for national superannuation income. That would be breaching the political consensus across the divide on the universality of national superannuation. I suspect that is the code for what Dr Cullen meant when he said that this would enhance the sustainability of national superannuation into the future. 
National is strongly opposed to this bill. We believe that tax cuts will put more money in people’s pockets give them every incentive to work harder to get ahead under their own steam and let them make decisions about their own money and its benefits to their families. This bill is not a tax cut it is not tax relief; it is a money-go-round. It is not a free gift. New Zealanders are paying for this and that simply cannot be right. It will cost business and it will not be good for the overall status of many low-income New Zealanders. 
I am concerned. I want to hear from Labour members how somebody who cannot afford to save for his or her superannuation will benefit from this. I would like to see those low-income people getting the chance to get more money in their pockets for doing the same amount of work I would like to see them getting every incentive to pocket some more for working harder and I would like to see them getting a pay rise. 
Dr the Hon Lockwood Smith 
: Whereas in Auckland they are going to pay a 10c petrol tax. 
Hon TONY RYALL 
: As Dr the Hon Lockwood Smith says many of those low-income people in Auckland will now have to pay 10c petrol tax—as we in other parts of New Zealand will as well I suspect from what is being proposed in this bill. 
So what the National Party says to the Government is very clear: reward incentive; do not discriminate against low-income people; give everybody the message that if they work hard then they will pocket more money and that if they save and contribute then they will be respected—but let us get those wages up. The Government does not understand that the most pressing issue for families today is that they can go to Australia and be paid 33 percent more than they are being paid here. That is an enormous gap. People can go to Australia and earn a whole lot more money. I think that every New Zealander would rather the Government was concentrating on closing that gap. It should forget about the other “closing the gap” it talks about which is incidentally now being called “reconciliation”. We have gone from “closing the gaps” to “reducing disparity” to “reconciliation”. 
I think that the Waitangi Tribunal may be renamed the “Truth and Reconciliation Tribunal” and frankly Helen Clark could never appear before it because “truth” is part of the title. What this Government needs to answer is: how will a low-income person in Otara benefit from this proposal versus lower taxes and a pay rise? Let the Labour Party members answer this question: under a highly centralised “MECA-ised” employment market what happens if half the workers are in KiwiSaver and the other half are not and the employer says: “We’re taking 1 or 2 percent off the table for the pay negotiations this year to pay for the KiwiSaver contribution. Michael Cullen said that was OK.”? How is that going to work? Why should the person who is not in KiwiSaver miss out on a pay rise because the other half is in the scheme? 
Hon Mark Burton 
: Stop making it up. 
Hon TONY RYALL 
: That is the guy who will soon be the former MP for Taupo. I have seen the polling. He will be going back to being the Rural Education Activities Programme coordinator in Taupo in less than a year’s time. 
Hon David Carter 
: They won’t want him. 
Hon TONY RYALL 
: Well yes they may not want him. It is a case of “reap what ye sow.” So really the important issue here is that the Government will not answer the questions. The questions are these. How do low-income people benefit? How will we deal under a “MECA-ised” workforce with giving some people a pay increase and not others? Why would people sacrifice the pay increases for some poor people for the others who are contributing to KiwiSaver? The third question is: is the Government going to means test national superannuation?