Dunne Peter: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
Dunne Peter: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
[Volume:639;Page:9462] 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I want to reply to Simon Power who has just spoken because he and Mr Carter who spoke earlier are probably the only two contributors from his side of the Chamber who during the course of the debate have got remotely near what the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill is about. I say to Mr Power that I relate very much to the last part of his speech. I recall that as an 18-year-old I took out a life insurance policy for the princely sum of $1000. It was to mature when I reached the grand old age of 55 which I am not yet— 
Simon Power 
: Years away! 
Hon PETER DUNNE 
: Lightning years away! I did that on the basis that contributions made then as a student then regularly throughout the duration of the policy would secure me a wonderful future entitlement. We can laugh today about the sums involved but the reality is that there is something in the psyche about wanting to provide for one’s future. That is why the package the Budget introduces—and this legislation gives effect to—regarding the new enhanced KiwiSaver provisions will be attractive for many people. Mr Power went on to use an example of a 35-year-old truckdriver with a family of four and all of the demands that go with that. That truckdriver will be eligible and has been eligible for the Working for Families tax credits so he will be getting a considerable uplift— 
Simon Power 
: It’s making them dependent on the State. 
Hon PETER DUNNE 
: This is where I think we get into a fallacious argument from both the left and the right—on the one hand of making people dependent on the State and on the one hand of this being a money-go-round. The fact of the matter is that we are delivering assistance to people—or if one likes making a return to people—that enables them to get on with their own lives. I think that is the bottom line for most people. 
I have come across very few people who when they get their Working for Families tax credits say that they do not want the money because it comes from the State. It does not come in a different-coloured coin and the cheque is not different; people actually appreciate the fact they are getting something back. The National Party says it would give it to them as a tax cut. That is still giving something back; it is not going to come as a different cheque at the end of the day. So I think the member is indulging in an argument that is essentially irrelevant to most people. 
I come to Mr Carter. He asked a question some time ago about whether this measure would see the Inland Revenue Department spreading its tentacles even more widely into buildings in Wellington. 
Hon David Carter 
: No—how many more employees. 
Hon PETER DUNNE 
: I heard the member’s question and I am going to answer it. Mr Carter shares the impatience of those who think they know best. They ask a question then they become scared stiff they might get an answer so they try to shout one down. Let me answer his question. It was in two parts. Firstly the Inland Revenue Department is actually trying to consolidate into one building at the moment both in Wellington and in Christchurch so there is not to be a spread of tentacles. Secondly the major processing area for KiwiSaver is actually at the Inland Revenue Department in Te Rapa which I visited a couple of weeks ago. It has the staffing capacity at the moment to be able to address KiwiSaver both as it stands and as it is enhanced. So the notion that hordes of new bureaucrats will be employed simply does not stack up. 
We are running an operation that is as I think Mr Fairbrother pointed out using new technology and working effectively. It has a call centre in place now taking inquiries literally as we speak. I think the member will see in due course that there is not the army of bureaucrats he fears might be out there waiting to be employed. 
This part of the bill is really about the technical changes required to bring in three elements of the Budget package. The first is the changes to KiwiSaver and the second is the reduction in the company tax rate. They are probably the two that have received the most attention. But the third element is probably in many senses more important than both of the first two. 
This bill is establishing over a whole range of savings entities a uniform tax rate of 30 percent. We are levelling the playing field in that regard and giving New Zealanders who save a very big boost in terms of the taxation on the funds they contribute to. That is one of the critical strengths of this bill and I think it is important to note that investments in unit trusts group investment funds widely held superannuation funds widely held group investment trusts that attract— 
Katherine Rich 
: Mr Chairman— 
Hon PETER DUNNE 
: If the member will give me just a minute I will conclude. I will simply go through the range of funds that will now be taxed at 30 percent which will cover the whole range of savings made by New Zealanders regardless of whether they are KiwiSaver compliant. When we put that alongside the KiwiSaver regime and the enhancements included in the Budget we are creating a very positive benefit and savings opportunity for New Zealand. 
Finally let me make this point. I have listened to a lot of debate in this House over the 23 or 24 Budgets I have sat through where the concern about New Zealanders providing for their future—saving either for their retirement or for the benefit of the country—has been addressed in many respects. Yet this measure is the first coherent measure to give effect to those concerns that I have seen in that time. The big difference between it and some of the other attempts that have been made to introduce savings schemes is that this is not being compulsorily applied top down; this is a voluntary scheme and its success will depend on the extent to which people take it up. The original estimates for KiwiSaver said there would be a take-up rate of around 20 to 30 percent as the scheme kicked off. Estimates have now improved to nearer 50 percent. I do not think that is a cause for concern—in fact quite the contrary. As this scheme becomes more well-known as people become more aware of its capacity and of the opportunity it gives them we will see an even bigger uptake and we will actually start to see some addressing of this country’s underlying problem with long-term savings. Whatever side of the political spectrum people are on that has to be a good thing. 
I say to those people who for so long have compared us with countries like Australia Singapore and Chile and who have said how much better those countries are doing with their good savings records and with the massive savings schemes they have in place that we are actually now starting to catch up. In respect of infrastructure education health and all the other things we are starting now to build the investment base that will allow us to grow those things for the future. That is what this bill is about and that is why I am pleased to support it.