Turia Tariana: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
Turia Tariana: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
[Volume:639;Page:9437] 
TARIANA TURIA (Co-Leader—Maori Party) 
: 
Tena koe Mr Assistant Speaker. Tenatatou katoa. It was Plato who once said: “The excessive increase of anything often causes a reaction in the opposite direction.” And so it is that yesterday the Minister of Finance introduced a reduction in the headline rate of corporate tax from 33 percent to 30 percent while in the same breath he announced that there would be compulsory employer contributions to KiwiSaver phased in over the next 4 years. 
This bill provides for the tax rate changes and the KiwiSaver enhancements announced in the Budget. The idea is that the company tax rate reductions will increase productivity and improve international competitiveness meaning that overseas companies will want to come over here and do business. That might be well and good but it does make me think about the likely impacts on our own local businesses and business people. 
We have already experienced New Zealand companies shutting up shop and moving overseas businesses downsizing and a fall in wages. There is also the not insignificant matter of some 300000 New Zealand children living in poverty. What about the basics like being able to afford to heat the home buy clothing pay for transport and participate in sport? What about the ability to eat a decent meal unhampered by missing or decayed teeth? 
Maori Party members support a reduction in company tax rates as part of our taxation policy so we are hardly going to oppose the notion of it. We believe that larger corporations should be encouraged to grow to increase employment of rising quality and that a decline in their tax rate from 33 percent to 30 percent will help to effect that. But the wider issue is that the tax relief will not go to those who need it most urgently and those are beneficiaries and people on low incomes. 
We looked to the 2007 Budget with one clear aspiration—that is that all people should have sufficient income to be able to participate in society and in their communities. We expected there to be initiatives to support meaningful full-time work and for people to benefit from a realistic minimum wage. We have talked before in this House about the need to raise to $25000 the maximum level of income that people may earn before they are taxed but we have yet to see a system that redistributes wealth equitably. We continue to note that the KiwiSaver scheme is not accessible to all—namely beneficiaries and those on low incomes—yet through the enhanced KiwiSaver scheme it is expected that 50 percent of New Zealanders aged from 18 to 65 years will actively contribute to KiwiSaver or a complying superannuation fund. 
The economy should not be a “game of two halves”. If 50 percent of New Zealanders are benefiting from KiwiSaver it does not take the use of a calculator to realise that 50 percent are not. One-half of New Zealanders are getting a pretty good deal—and I include ourselves in those who are getting a pretty good deal. Those opting into this scheme or a complying superannuation fund will receive a tax credit dollar for dollar of their contribution up to a cap of $20 a week. Those opting into the scheme or a complying superannuation fund will receive compulsory matching employer contributions starting at 1 percent in 2008 and reaching 4 percent of gross salary or wages by 2011. But for some vaguely defined different subgroups of the labour force—that is the working poor and beneficiaries—the benefits will be negligible. 
This new category of people “subgroups” appears in the general questions and answers section of the KiwiSaver package. I wonder whether these are the people who earlier this year were referred to as “the underclass”—“sub” meaning subordinate secondary below the radar or inferior. These different subgroups presumably are those families who live with net-of-housing cost incomes below the 60 percent line—23.6 percent of whom are Maori 40.2 percent of whom are Pasifika and 15 percent of whom are Pakeha. Subgroups are also no doubt those who live in houses defined as overcrowded—23 percent of all Maori 43 percent of all Pasifika and 5 percent of all Pakeha. Subgroups are no doubt those who live in severe hardship with below-average earnings and high-frequency visits to food banks. Subgroups are no doubt those who live in clusters drawing a benefit. Subgroups are obviously not those who will benefit from the Government’s largesse in this Budget. 
The Maori Party does support the enhancements to KiwiSaver that act as incentives to join the scheme but we will not desist from confronting the situation for beneficiary New Zealanders living or struggling to live on a measly few hundred dollars a week. For average people on an unemployment benefit a 4 percent contribution would see them put about $12 into KiwiSaver. Although they will not of course receive any employer contribution they will get a tax credit of $12. That will bring them to a grand total of $24 in savings a week. That may not sound very much to people who are in this House but if it means sacrificing 20 litres of milk a week or bus fares for the kids to get to school then the prospect of savings becomes remote. 
The question of whether low-income workers will be able to commit to giving the minimum 4 percent of their pay to join up to KiwiSaver has of course been frequently raised by the Maori Party and it is ironic that just 2 days after the bill to protect the rights of children was passed another bill is before the House that still continues to leave our poorest families behind. The proportion of all children in severe hardship or significant hardship in New Zealand has increased from 18 percent to 26 percent since the year 2000. I am reminded of the wisdom of Bishop Desmond Tutu who said: “If you are neutral in situations of injustice you have chosen the side of the oppressor. If an elephant has its foot on the tail of a mouse and you say that you are neutral the mouse will not appreciate your neutrality.” 
The ongoing injustice of social exclusion is evident in the thousands of New Zealand families who are struggling to live on incomes well below the poverty line. We cannot collude with the silence of neutrality or the “fairness for all” rhetoric which ignores the reality that too many New Zealanders are unable to participate in their communities. Benefit levels are still far too low to enable families to do anything about the situations of social distress they find themselves in. We contrast that with the projected $3 billion to enhance the KiwiSaver scheme and the $2.1 billion that the reduction in company tax will cost the country in lost revenue. 
We believe that the moral test of a Government is how it treats those who are at the dawn of life those who are its most vulnerable and our poorest and socially impoverished citizens—amongst them tragically a disproportionate number of young people. The Maori Party believes that if we invest in people and give priority to our human capital our whole society will prosper. We believe that the amount of the benefit should be raised to that of the minimum wage and that work should be meaningful productive and skill-enhancing. These are aspirations that are worthy of urgency at any time of the year. Tena koe.