Robertson Grant: New Zealand Superannuation and Retirement Income Amendment Bill — In CommitteeText is incorporated into the Bound VolumeRobertson Grant: New Zealand Superannuation and Retirement Income Amendment Bill — In Committee[Sitting date: 30 June 2015. Volume:707;Page:4912. Text is incorporated into the Bound Volume.]GRANT ROBERTSON (Labour—Wellington Central):There is so much competition for the call Mr Chair! Part 2 of the bill relates largely to amendments to the Income Tax Act that are consequential on the establishment of fund investment vehicles under new section 59A in clause 7. It is a relatively non-controversial part of the bill and one that the Labour Party will support.A couple of points arise when we look at section HR 4B which is being substituted by clause 13 of the bill around the way in which the activities of the New Zealand Superannuation Fund are considered within the Income Tax Act. What it really does raise when we look at that—and it is a relatively straightforward application of those rules to the way in which these funds will be created. It is important for the sake of the transparency of the fund that fund investment vehicles are now specifically noted because they have not existed before and that all activities that the superannuation fund undertakes are currently noted within the Income Tax Act. So it is a sensible and transparent way of establishing that these are here. But it does raise the issue of the question of the payment of tax by the Superannuation Fund.We have had some conversations in the Committee tonight about what size the Superannuation Fund might have been had the Government continued to invest in it and make contributions to it. Mr Bishop in one of his earlier contributions was bemoaning what stupidity it would be to borrow money in order to invest in a fund such as this. I would perhaps put the question to Mr Bishop as to what he would do if offered the prospect of I do not know a return of around 20 percent when he could borrow money at—oh I do not know—around 3 percent or 4 percent. What would he do in response to that? That would be I would have thought—from a layperson’s point of view—quite an important and useful thing to be able to do because of the ability of the Crown particularly to borrow at such low rates and because of the impressive performance of the fund thus far.The way that this relates to this part of the bill is that the Superannuation Fund is the biggest taxpayer in the country. That is right I think—is it not Mr Bishop? It is the biggest taxpayer in the country. Although we can concern ourselves with the amount of money that the fund might have earned for itself as it went through this it is also a question of the amount of tax that it might have paid had contributions been restored. There is a debate of course about whether or not the Superannuation Fund should be a payer of tax in that but certainly if we think about the levels of forgone revenue that the fund would have got we are talking about billions of dollars of tax here potentially not being paid as provided for under Part 2 of this bill. It is just another reason to contemplate the folly of this Government in not having continued to build this fund.We have already heard in this Chamber tonight that the history of National’s interaction with the Superannuation Fund is a very sorry one because it played politics with it when it first arrived in Parliament. Michael Cullen’s whole mission as the Minister of Finance was to help establish long-term supports for the core Government provisions that were needed. You know that is why he left KiwiSaver to this House as a legacy. That is why he left the Superannuation Fund to this House as a legacy because he could foresee that we needed a stronger base for an ageing population. We needed a stronger base to ensure that we had our own money which we could invest. We have heard the story many times in this Chamber of what would have happened if the then National Government had not trashed the Kirk fund. Around $285 billion worth of investment potential in our country was taken away in an election bribe many many years ago. So National’s attitude has been poor around this fund.We have now got a situation where we have seen losses. We have had a number of figures thrown around the Chamber tonight but more than $10 billion—quite a bit more than $10 billion actually—could have been added to the fund that was not added to the fund because the National Government made a political decision. It decided in its words to “borrow” money for tax cuts. It decided that was the priority rather than making an investment in a fund that will pay out in the future for superannuation and rather than making an investment—Andrew Bayly: The tax cuts were fiscally neutral.GRANT ROBERTSON: “Fiscally neutral”! Andrew Bayly says that the tax cuts were fiscally neutral. He is still working off the 2010 talking points. They were not fiscally neutral I can let Mr Bayly know. That is not what happened. They were tax cuts that overwhelmingly benefited those on the highest incomes. They were given at a time when the Government told us there was no money to do anything. It had to cut back on all kinds of measures but there was money to do that. But the point I was making to Mr Bayly was that actually if you apply the rhetoric of not borrowing money for the Superannuation Fund you cannot then suddenly dispense with that rhetoric for what the Government did do with the money that it had which was to give tax cuts.But the point that I am bringing back to Part 2 of the bill—which we do support—is to say that this is the part of the bill that relates to the interactions with the Income Tax Act. This fund had the National Government actually committed to making the contributions it could have made would have been paying to the Crown I would venture to suggest at least $1 billion in tax that has now been forgone. That just typifies the attitude of the National Government to this fund.