Delahunty Catherine: Taxation (Annual Rates and Budget Measures) Bill — In Committee Third Reading 
Delahunty Catherine: Taxation (Annual Rates and Budget Measures) Bill — In Committee Third Reading 
[Volume:672;Page:18980] 
CATHERINE DELAHUNTY (Green) 
: 
 I am pleased to take a call on what some of us are calling the “Ken Ring Budget” Part 2 because it is based on some fairly interesting random predictions on the future economy. The Government may need advice from Ken Ring. He makes a lot of mistakes but at least he is a colourful character. 
I would like to talk about Part 2 of the Taxation (Annual Rates and Budget Measures) Bill. This morning some of us attended the Child Poverty Action Group breakfast where the issues we are discussing in Part 2 “KiwiSaver and Working for Families” were identified as worthy of key analysis in terms of who is ignored. There has been a consistent ability to ignore two crucial parts of our community and Part 2 continues that trend. 
One is beneficiaries. Beneficiaries are recognised in this Budget only as non-people—non-workers and their children who do not receive Working for Families now. As the Child Poverty Action Group pointed out this morning we have had increasing poverty for those families for more than two decades. Roger Douglas and the “mother of all Budgets” is when it started. We do not see that Part 2 does anything for those people. 
I heard members of the Government say last week that they are a Government for the vulnerable. I think their definition of “vulnerable” is the 13 percent of people who got richer but that is not my idea of the vulnerable. The vulnerable are people who are having trouble surviving right now. There was good discussion at the Child Poverty Action Group breakfast about the vulnerable and about Part 2. We are very concerned that despite the Government trying to pitch this as not a serious attack on KiwiSaver I have already in the last 24 hours met people who are saying they think they will pull out. These are people who have never ever saved before. 
Hon Member 
: Why? 
CATHERINE DELAHUNTY 
: Because they find that $500 is not enough. The Government’s $1000 a year was an incredible incentive to save. But in hard times they might as well keep the money. They are struggling so hard with the basic costs that without that Government incentive it is just not worth it to them any more. I think that is tragic but it tells us how many people are living in that space where the difference between $500 and $1000 in terms of the Government contribution is critical to them. Now they are going to give up saving for their future. I think that is because they are forced into survival mode in a time when costs are increasing by Part 2. 
It is a shame about KiwiSaver which has been one of the most breakthrough initiatives in this country for getting ordinary people who do not have the capacity to join fancy schemes who do not have reliable employment and who do not have a lot of money—some of them are on benefits—to start saving so they can have some self-sufficiency in old age. That is a really sad thing to hear and it is an indictment because we actually believed the Government’s promise that it would not cut KiwiSaver. 
I agree with the previous speaker Kris Faafoi that KiwiSaver will be an interesting issue during the election. KiwiSaver will be debated hotly. People are not stupid. They will do the maths and look at whether they are better off going into a scheme like KiwiSaver any more. I think that one media person called it paying more to stay the same. That is a really sad thing because people who struggle to pay all their bills cannot afford to pay more to stay the same in terms of savings. They cannot afford to do that. 
We are so buffered in this Chamber. We are so privileged by our own superannuation schemes by our own protective devices to make sure we have a pleasant retirement and we forget at our peril the really vulnerable people. The Budget is supposed to be about them not us the already insulated and protected well-off people sitting in this Chamber. 
I return to Part 2 in terms of Working for Families. Reducing the abatement threshold down to $35000 means that abatement applies to a two-parent family with one partner working full time at the minimum wage and the other working 12 hours a week at the minimum wage. Raising the abatement rate to 25c in the dollar results in an effective marginal tax rate of 58 percent. Losing almost three-fifths of any extra income in tax and in Working for Families abatement is far from an incentive for parents who are earning just around $35000 or over to—to quote the Government—work harder to better themselves which is what the Government says they should be doing. 
We are very disappointed that Working for Families is being undermined at that level for those people who are in that marginal area and who really needed Working for Families to stay the same. I think it was Child Poverty Action Group members who said this morning that they do not have a problem with the richest people losing Working for Families because it was never intended for them anyway. It is actually quite appropriate that the Government should cut back on their access to that but it is not appropriate to cut that down for the people earning about $35000. It is not an appropriate thing to do. We think Part 2 is carefully calculated—