Cosgrove Clayton: Taxation (KiwiSaver HomeStart and Remedial Matters) Bill — In CommitteeText is incorporated into the Bound VolumeCosgrove Clayton: Taxation (KiwiSaver HomeStart and Remedial Matters) Bill — In Committee[Sitting date: 25 March 2015. Volume:704;Page:2602. Text is incorporated into the Bound Volume.]Hon CLAYTON COSGROVE (Labour):There must be some sort of anatomical block with that member David Bennett because he just does not quite get basic mathematics. So I will try my best to explain it for him. See that member—we are here to debate his policy not previous Government policies—has been in Government for 7 long years and the best he could do today is dredge up what happened 7 or 8 years ago. So let us deal with the maths using all his fingers and toes and explain it to him. He would have the New Zealand people believe that this is a wonderful gift and that people should be so grateful to this Government for this huge big hit that it is providing New Zealanders with to get them into their first homes. If you listened to him and his ilk you would think they were giving away millions of dollars to people. You would think that they were saying to people: “Look we are going to give you the biggest gift you’ve had since Christmas in monetary terms to get into your first home.” But let us try to get the maths right even if we have to get out the Cuisenaire rods for that member.So here we go. The maths goes like this: the benevolent National Government will allow you the New Zealand people to withdraw $521 of your superannuation through your KiwiSaver account—your money not theirs; yours—once a year to contribute to a first HomeStart. So have you got that? It is $521 per year. Yet we know—and that member could not name it—that Auckland house prices are going up by $1700 per week. Now wait for it—that equates to $90000 per year which in people terms funnily enough is in theory the number of people whom the Government over there says it is going to help. It says it is going to help 90000 people. There is also another 90000—a $90000 per year increase in Auckland house prices—and the generous National Government is going to allow you the New Zealand public to use $521 of your future superannuation to try to get you over the top and into a first home.I do not know whether that is clear enough for Mr Bennett. I do not know whether we have to get out the Cuisenaire rods and the abacus and a few other things to make it clear for him but if he and his ilk think that the New Zealand people should get down on bended knee and thank him and his ilk for allowing them to withdraw $521 per year to try to help them get into a first home when that amount is expunged in less than 3 to 4 days and when Auckland house prices are going up by $1700 per week which equates to $90000 per year—I do not know. I did get through standard 4 maths; it is pretty simple to me.I am no sort of genius like that member is when it comes to market forces and great issues of economics but I reckon that if you walked down the street and waved clause 6 of the bill and explained it to the average Kiwi person struggling to get into a first home one they would get it. Two if you asked them: “Do you feel great about this? Do you sort of feel warm in your old age? Should you be getting down on bended knee to the National Government and thanking it for its generosity in allowing you to use your own retirement savings small amount though it is?” I suspect—but I am happy to be corrected or if somebody has got an opinion poll—that people when they realise what piffle is in this will actually be quite outraged.Then the next question is is this the big hit—because that is what it is being portrayed as—by the National Government to solve the housing problem? Well if you look at those basic figures—521 bucks when Auckland house prices are going up by $1700 a week—you would have to say that actually this bill is not even worth the credibility of being called a political pamphlet. It does not even stack up as decent propaganda because people will look at this and know that this is not even a drop in the bucket.What I would be interested in from the Minister and maybe from some of his other erstwhile colleagues who are on the Finance and Expenditure Committee with me is whether somebody could get up—because those figures are not in dispute—and you could talk about what previous Governments have done and have a battle of percentages. But I have got to tell you team this is your policy your legislation and your Government. You are either proud of it—I say through you Mr Chair—and they will stand up and they will be proud of the fact that they are giving people a few hundred dollars a year while prices are going through the roof or they are not proud of it. And if they are proud of it I would ask the Minister in the chair Jo Goodhew this. Can she tell us whether she believes that that is a realistic contribution—or any sort of realistic contribution—to going some way to solving the housing crisis?We will support the bill because as the Green colleague said it gives some money pitiful though it is. It actually does not give any of the Government’s money; it gives people the ability to use their own retirement savings so the Government should not take credit for that benevolent though it is in allowing people to use their own dough. We will support the bill because as the Green colleague said something is better than nothing but you know we have not advanced more than a millimetre over the “nothing” line.So I would be really indebted to the Minister—or the new Minister Nicky Wagner who has just come to the chair—if either of them could actually stand up and explain to the people of New Zealand what impact this is going to have. Treasury of course told the Minister and told the select committee as Mr Goff pointed out that “increasing deposit subsidies is likely to stimulate demand and thus increase prices in supply-constrained markets thereby undermining housing affordability.” I will say it again for Mr Bennett’s benefit. It is “thereby undermining housing affordability.” That is not me saying it. That is not the Labour Party or any Opposition parties in this Committee saying it. This is Treasury and the Ministry of Business Innovation and Employment and the Government’s own advisers saying it. If you were a Minister and you said: “Look I want a policy that will help first-home buyers into their first home.” and your officials came back and said: “It will undermine housing affordability.” you would think that a Minister with half a brain would say: “Hang on that is exactly the opposite of what I want to achieve with this policy.” You would think so would you not?Phil Twyford: And who was the Minister?Hon CLAYTON COSGROVE: And who was the Minister? It was Nick Smith was it not in or out of Cabinet. I would think that you would do that but you know I am an old-fashioned guy. But not this Government—it ploughed ahead.And when the officials it bears reference to say came to the select committee and we asked them: “Look guys is this actually going to be a big bang? What effect is this going to have in a positive way for homeownership?” etc. etc. they said: “We are tentatively positive about this bill.”I would propose that in the title clause maybe we should change the name of this bill to the “Nick Smith Tentatively Positive Bill” because when officials come up to you and say: “We’re tentatively positive.” they are not even enthusiastic. They are not even convinced in their own minds—and they are the experts not us politicians—that this will have any major impact at all. The best they can do after you just sort of draw the analysis out of them like razor wire is to say: “We are tentatively positive.” Is there anybody on that side—well maybe the Minister could say whether she shares the officials’ view and that she is tentatively positive about the impact or lack of it that it will have.This is a very mean-spirited bill. Mr Bennett should realise that this bill is not about the market; this bill is about the National Party in Government trying to portray itself as doing something—anything—after 7 years about a housing crisis that it does not admit is a housing crisis. When you unbundle the basic figures—and I hope that Mr Bennett might have taken a few notes down; he might be on the calculator as we speak trying to work it out—this bill does nothing actually. It does nothing for those people who are trying to get into their first home. It gives them $521 a week of their own money their own retirement savings which is wiped out in about 48 hours when you look at Auckland house prices going up by $1700 per week or by $90000 per year.I have got to say that if the National Government wants to carry on with the masquerade that is fine but you have got to understand that people out there in Struggle Street are not stupid Mr Bennett. They are not stupid. They can see through the wool and the smoke and they can actually add up because they do. They write their own budgets. They write their own budget every week with their housekeeping as they go out and try to keep their families and buy food and clothes and shelter and the various things that they need. They know how to budget possibly I would say—even though he is a market and economic expert—better than Mr Bennett does because they have to do it in order to survive. But I will bow to his superior intelligence and I will make a deal with him. If he can rebut those figures I am quite happy to yield to him now in the short time that I have left or I am sure that somebody else will because these figures are real.This is a mean-spirited bill—mean-spirited. As I said last night it is mutton dressed up as mutton and no speaker over there—and it is interesting that the Minister will not take any questions—has been able to knock those figures over.