Burns Brendon: Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill — Second Reading 
Burns Brendon: Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill — Second Reading 
[Volume:664;Page:12190] 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I am very pleased as a member of the Finance and Expenditure Committee to contribute to the second reading debate of the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill. It is in large part a wash-up bill for a number of measures but the most important parts of it at the heart of the bill are the key changes that make it much easier for trans-Tasman retirement savings to be moved from one side of the Tasman to the other. That is an absolutely essential change. 
I think that just about every member of this House would acknowledge that although we still remain very firmly two countries we are also very much one market. There is a huge flow of people from one side of the Tasman to the other and it is not all a two-way trade. I imagine that we might see soon a former Australian Prime Minister in retirement perhaps and we might have a Socceroos coach looking for somewhere to bolthole for awhile. So these people and many many others might well need the benefits of a better flow of trans-Tasman portable superannuation savings. It happens across the age spectrum. My dear late parents emigrated to Australia 8 years ago at the age of 82 with two of my brothers living there. They may have got some modest benefit from these changes. 
The KiwiSaver scheme was extraordinarily well-designed by Michael Cullen and I think there was probably input from the then Minister of Revenue and current Minister of Revenue Peter Dunne. In fact the KiwiSaver regime did and still does allow New Zealanders to take their savings to Australia. Currently and unfortunately the matter being addressed by this bill is that those New Zealanders who live in Australia are not so able to move their savings back over here should they wish upon retirement to return to the land of their birth. 
We are talking about sums estimated at A$13 billion or NZ$16.5 billion and they are amounts that are bigger perhaps than the health budget in this country. We are talking about very very large amounts of money and I think that has the effect of locking New Zealanders who might wish to return home for their final years into staying in Australia beyond the time they would prefer to come home. So this is a very sensible and even essential set of changes to allow a better flow of trans-Tasman savings. It is a step forward in that respect. 
That said obviously when we look at the whole context of savings we do need to note that at the same time that the Government assists with this step forward it takes two steps backwards when we consider the broader view of superannuation. The first thing of course was the decision in last year’s Budget to suspend contributions to the New Zealand Superannuation Fund. I noted the comment from Finance and Expenditure Committee chair Craig Foss a speech or two ago that it is not appropriate to borrow for savings. Of course that does not apply when the Government wants to borrow to fund tax cuts as it has done in this year’s Budget—that is a perfectly appropriate thing to do. The other thing is that the analysis earlier last year was that the New Zealand Superannuation Fund was losing money and therefore it should not be invested in when in fact the latest Treasury figures show that the Government’s superannuation fund—the national superannuation fund the Cullen fund—has bounced right back and is contributing positively back well and truly into the black. 
The other thing to note in this year’s Budget in respect of the superannuation fund is that although we will back in surplus—now projected to be in 5 years—contributions to the New Zealand Superannuation Fund would still be suspended for another 4 years. So we know that the Government has taken a philosophical position about savings and continues a pattern of behaviour by National Governments over the generations—to not truly support retirement savings. This goes right back to Muldoon’s axing of the excellent Kirk-Rowling Government scheme in 1972-75 which as has quite rightly been acknowledged could well be a multibillion dollar fund. It could be projecting us into prosperity if it had been left in place rather than used as a cynical electoral ploy in the 1975 election. 
But let us move back to the current period and look at KiwiSaver which of course has been subject to some amendments through this bill. I note the recent Australian Budget where employer contributions are required to rise to 12 percent of an employee’s salary and I note that New Zealand’s Budget last year cut the employer contribution to KiwiSaver from 4 percent to 2 percent. So we now have a 10 percent differential between what one can receive in one’s retirement savings scheme via one’s employer on that side of the Tasman as opposed to this side of the Tasman. That really is a betrayal I think of those 1.2 million Kiwis who have signed up to KiwiSaver. National has actually gutted the KiwiSaver scheme in large part. That really is most unfortunate. 
I want touch on Supplementary Order Paper 105 which the Minister has put forward. I acknowledge the Minister’s move in this area around the Screen Production Incentive Fund. This fund was introduced by the previous Labour Government in 2008 as a measure of assistance to the film industry. In legislation passed last year changes were made around the taxation treatment of what is known within the industry as “SPIF” the Screen Production Incentive Fund and grants from it. The logic of the advice at that time was if a film producer was receiving a grant from the Government then that person should not get any particular assistance with tax treatment any more fully. 
The problem with that was it created a differential treatment between films that received other Government funding such as through the New Zealand Film Commission and those that received funding through the Screen Production Incentive Fund. The net effect of that was that any film that did not get a Screen Production Incentive Fund grant was able to immediately start claiming the tax deductions that are obviously needed in the film industry—some make money; a lot do not—but the treatment of a film that received a Screen Production Incentive Fund grant meant that one would have to wait up to 3 years to get any offset against the investment of the film grant. 
I acknowledge the Minister. He has listened to the New Zealand film industry which has pointed out this anomaly and the implications of it for the film industry. It is an industry that as I noted either does very well or bombs. People lose large amounts of money very regularly in the film industry. So I acknowledge the Minister’s Supplementary Order Paper which tidies up that issue on behalf of the film industry and puts things on a more equitable basis. 
I go back to the new rules around trans-Tasman portability of savings. I acknowledge that the KiwiSaver scheme already has portability inherent in it because it was well designed by Michael Cullen and the last Labour Government. But this bill will make some changes to the rules around those who permanently emigrate to Australia and also will now allow New Zealanders resident in Australian who have contributed to a savings scheme in Australia—with those large volumes of employer contributions—to benefit from the return of those funds to New Zealand if they decide to come back here to retire. 
There are some constraints as to what one can do with Australian-sourced savings. For instance if one returns to New Zealand one cannot use it towards any of the KiwiSaver housing-related incentives. Some members may recall that one could use KiwiSaver towards a first home deposit and so on. So there are limitations upon it but in the broad sweep of things it is a very very positive move. It will allow New Zealanders who have contributed—sometimes over 20 30 or 40 years—to Australian-based superannuation schemes to repatriate those funds back to New Zealand to see them into a well-funded retirement. 
These changes are very very good moves in respect of many thousands of New Zealanders. I think these measures will be an incentive for New Zealanders who currently may be trapped in Australia with quite generous superannuation schemes but were not until this legislation able to repatriate those funds bring them home and set themselves up for their retirement. Anything that encourages New Zealanders to return to the land of their birth has to be applauded and supported and that is why Labour has been very very firmly supportive of this bill. 
Finally I acknowledge Craig Foss the chair of the select committee and the officials who supported us through the processing of this bill. Thank you very much. 
Bill read a second time.