Copeland Gordon: KiwiSaver Bill — In Committee 
Copeland Gordon: KiwiSaver Bill — In Committee 
[Volume:633;Page:4942] 
GORDON COPELAND (United Future) 
: 
 First of all when the member John Key tells New Zealanders correctly that there will be no Government guarantee involved with KiwiSaver it appears to me that since National is voting against every part of this bill so far it intends to actually vote against the KiwiSaver Bill. So I would like to point out to New Zealanders that if that is the case there will be no guarantee that KiwiSaver itself will continue if there is a change of Government. 
John Key 
: That’s right; there is no guarantee. 
GORDON COPELAND 
: Mr Key has confirmed that that is the case—that National would look at scrubbing the whole thing. I think it is quite good to have that on the record so that people clearly understand that they will be given a real choice in relation to this bill. 
I would like to go though to new clause 194A which has come in under Dr Michael Cullen’s Supplementary Order Paper 52 relating to the mortgage diversion facility. As others mentioned in the second reading debate this change to the bill was promoted by United Future and by myself in particular as its spokesperson on finance and revenue. So let us just get the record straight. 
Far from doing a back-room deal on this I actually took the suggestion to the Finance and Expenditure Committee. I laid it out to members as best I could with back-up papers diagrams flow charts and all the other things that they would need to make a decision on it. National is completely wrong in saying that the select committee unanimously rejected the mortgage diversion facility. That is not correct. It was voted for by United Future it was voted for by the Green Party and it was voted for by the Maori Party. So let the record stand corrected in that regard; that was the situation. It is true that subsequently I entered into discussions with the officials to whom the Government had signalled its intent which was clearly signalled in the commentary on the bill that the bill merited further work and further consideration. The result of that is the Supplementary Order Paper that members now have before them. 
I believe that this is a very very important improvement to the design of the KiwiSaver scheme. It will have manifold advantage from the point of view of investors. For example we were told in many submissions that the fear was that people would invest for 1 year get their $1000 reward from the taxpayer and then take contribution holidays for maybe 25 or 30 years while they paid off their mortgage. This mortgage diversion provision on the other hand ensures that those people will contribute to KiwiSaver continuously. It is very very important that they do because only by being in KiwiSaver will they be eligible for top-ups from their employer. If they are not in the game they are out of the game completely. 
Mortgage diversion creates an opportunity for people to stay in the KiwiSaver game in order to get their $1000 subsidy and whatever their employer decides to top up for them and at the same time to use up to 50 percent of their own personal contributions to service mortgages. As I said earlier that is holistic because it means that people can end up in retirement with a freehold home and with a reasonably tidy sum invested to help them supplement the level of New Zealand superannuation which by any standard is going to give people only a very basic income indeed. In particular a person who is still renting a house will not be able to survive on New Zealand superannuation—cannot survive. So it really is a very very important measure. It will assist literally hundreds of thousands of savers in the years to come to accomplish those two goals of ending up in retirement with a freehold home and at the same time ending up with a tidy sum put away to invest for their retirement. Therefore it really increases enormously the retirement security of New Zealanders. 
Furthermore of course it will swell the base of capital funds in New Zealand and the availability of that pool of funds—as we have seen in Australia in Singapore and in other jurisdictions—so that New Zealand companies can more readily access the capital they need to grow their businesses. Instead of having a continuous line of Australian companies taking over Kiwi companies maybe we will even see some reverse of that and we will grow our economy to be strong enough to actually diversify overseas and become an ownership-based society. That is one of United Future’s central goals in all of our policy. We want to see a genuine ownership-based society built in New Zealand so that we have a stake in our future and in our prosperity. We want that spread right across the whole of our society. 
I am very pleased tonight to take some credit for the mortgage diversion facility. It is an idea whose time has come and I have no doubt that the mature judgment of New Zealanders as we move forward into the scheme and see it implemented and unwound will be that this was a great change to a good scheme.