Adams Amy: Taxation (Annual Rates and Budget Measures) Bill — In Committee Third Reading 
Adams Amy: Taxation (Annual Rates and Budget Measures) Bill — In Committee Third Reading 
[Volume:672;Page:19015] 
AMY ADAMS (National—Selwyn) 
: 
 I will take a call in the third reading of the Taxation (Annual Rates and Budget Measures) Bill. Before I talk about some of the specific measures in the bill I want to make a few introductory comments to set the context within which those changes are being made. As this has been a wide-ranging debate I am sure I will be indulged for a few moments. I think where we have to start with this stuff is to say that anybody can stand here and talk about perfect-world scenarios. It is very easy to stand here and say that this should be happening we could do this and would it not be great if we could do that. But the reality is that the last few years have presented an unprecedented set of challenges. There have been economic challenges personal challenges and social challenges that this Government has had to deal with. That has meant we have to make changes to the way things have been if we are going to get this country back on a path to sustainable growth. If we are starting from a position of saying that everything is good let us just carry on and keep spending money we are not accepting the fact that we have to do things differently to deal with what has gone before so that we can get this country on a path back to growth. 
This Budget charts a remarkable turn-round from a record deficit of over $16 billion to almost balance in 3 years and in the year following that a surplus of $1.3 billion. That is a turn-round in those 4 years of nearly $18 billion. That is a stunning achievement and it is an absolute prerequisite to getting this country into the sustainable strong prosperous position it deserves to be in. Mr Burns was right about one thing in his contribution: a big part of getting that situation right is about controlling debt. We are not making any excuses about that. We have to get on top of this debt. If we are going to keep borrowing and borrowing we will never get back to the position of surplus. Surplus means choices and the ability to withstand the sort of shocks we have had in the last few years. We have to control debt. At the moment we are borrowing $380 million every single week. With the changes in this Budget we can get that down to $100 million a week next year. That is absolutely critical to getting this right. Yes we are making changes and yes those changes take money out of the Government spend. That is a good thing because it is what is needed right now in this climate with the issues we are facing. 
I want to have a look at some of the specific changes this bill delivers to KiwiSaver and Working for Families. Let us have a look at those. I have sat here all day today and the debate has been wide ranging but few people have actually talked about the specifics of the changes and how small and gradual they are. Let us have a look at them. KiwiSaver costs this Government $1.2 billion every year. It is costing this Government $1.2 billion in subsidies and tax breaks. That money comes from hard-working New Zealanders. What is worse it is money that is adding to what has to be borrowed from overseas. It all has to be funded and paid for. Yes we are reducing the tax credits to 50c in the dollar but we are keeping the kick-start subsidy. That means we will still be committing $650 million as a Government to KiwiSaver in the next year. That is a significant contribution. We will be committing $2.5 billion to KiwiSaver over the next 4 years. That is absolutely important to emphasise. We are committed to it. We will see it remain viable and successful and all the projections tell us it will continue to grow. But yes we are reducing those tax credits to help pay the bills from the years we have had it. 
Let us look at Working for Families. We are talking about gradual changes over 8 years. Let us get this on the record very clearly. Three-quarters of families on Working for Families will not see a reduction; in fact they may see more. Twenty-five percent of families will see a reduction and that reduction is an average of $4 a week—$4 a week. For all the histrionics about gutting slashing burning and everything else and all the vitriol and hyperbole we have seen a quarter of families on Working for Families will notice a reduction gradually introduced over 8 years of an average of $4 a week. It is not a lot but it is an important step in getting this country back to surplus. We have to put that on the record. 
Let us have a look at student loans as well. Although the student loans scheme is not part of this bill it is an important part of this. Here are a couple of interesting things. The cost of student loans has gone up 50 percent in 5 years—50 percent. There is $12 billion outstanding in student loans. Of that money the Government collects an average of 55c in the dollar. It is staggering to find out that 50 borrowers are responsible for $11 million in debt between them. We have to start asking the hard questions about these schemes; we cannot put them in the sacred cow category. That is what this Budget has done and it has done it in a balanced and responsible way. That is what this bill delivers in respect of KiwiSaver and Working for Families and I am very pleased to commend it to the House.