Hide Rodney: Taxation (KiwiSaver and Company Tax Rate Amendments) Bill — First Reading 
Hide Rodney: Taxation (KiwiSaver and Company Tax Rate Amendments) Bill — First Reading 
[Volume:639;Page:9389] 
RODNEY HIDE (Leader—ACT) 
: 
 Let me just respond to Jeanette Fitzsimons’ point. Of course if we cut taxes—company rates and personal rates—the question is whether we would see an investment back into New Zealand. What Jeanette Fitzsimons was thinking about was that we would get a higher dividend stream. That is quite right—there is no guarantee that that dividend stream will then be invested back into New Zealand. But if we think about it for a minute when people are making a decision about whether to invest in a company or in particular whether to invest into a country they are interested in the return they will get balanced against the risk. If we cut taxes on the return from investing in a New Zealand company we automatically boost that return. In that sense we would not necessarily expect that people would be getting a higher dividend but all around the world there would be a proportional higher investment back into New Zealand simply because we have increased the return from investing in the country. 
So I think we do know that all things being equal if we reduce the tax on companies and drop taxes on capital then we will see increased investment. That does not necessarily mean that a particular dividend stream that a particular shareholder gets will be returned to New Zealand. 
I like the idea of cutting the company rate of tax from 33c to 30c. 
Hon Clayton Cosgrove 
: Are you going to vote for it Rodney? 
RODNEY HIDE 
: I would like to vote for that bit but I am afraid I cannot vote for this other stuff. 
Hon Clayton Cosgrove 
: Aw! 
RODNEY HIDE 
: I know that the member for Waimakariri is upset that I am not joining him on this particular occasion but I have a problem with it. One of the things that concerns me is that people are actually voting for a pay cut for the people who will go into this scheme. 
R Doug Woolerton 
: What’s that? 
RODNEY HIDE 
: It is a pay cut. What I want is a tax cut and a boost to people’s pay and Mr Woolerton is voting for people who go into this scheme to have a pay cut. How smart is that? What people think about when they get paid each week is what they get in their hand each week. If people enrol in this scheme what they will get each week will be less. It will be less—they will be getting it paid but it will be paid into Michael Cullen’s scheme. Then he is telling people that he will pay them if they put it into that scheme but they will not be able to get it until they are 65. 
I think that it is quite a good thing that people save but saving is not for everyone all through their lives. I pick up on what Mr Woolerton was saying about his son. It is probably not the smartest thing for him to be saving in an investment scheme right now. He would be better off investing in his business and paying off his mortgage. But what will happen under this scheme is that he will be denied the opportunity to invest in his business or pay off his mortgage. He will be encouraged to put money into the KiwiSaver and as a consequence of his doing that his take-home pay will be reduced. I do not know why this House is so cock-a-hoop about voting for a scheme that will reduce people’s take-home pay. [ 
Interruption 
] Mr Clarkson has a point. 
Bob Clarkson 
: There’s going to be a sliding benefit. 
RODNEY HIDE 
: I look forward to hearing about that too because I tell Mr Clarkson that I am just a simple man and what I see is a reduction in take-home pay. 
Here is another problem with this scheme. John Key and Bill English are quite right. This scheme is a money-go-round and it does nothing to boost investment and saving in New Zealand—nothing. It does nothing whatsoever because it simply takes money that people have already earned and gives it back to them if they put it into the dopey KiwiSaver scheme. That is what it does. It is money they have already earned. 
If we care about the future of New Zealand and about providing for our elderly into the future the only way we can do that is to have a bigger economy. That is the only thing we can do. If we think about it if our economy is just this size there is only this much for everyone—it does not matter how much we have saved or invested. If our economy is only this size that is what we have. However if we have an economy twice as big in 30 years’ time we will have twice as much ability to provide for the elderly. That is where we should be focusing our attention. 
Dr Cullen is right: it takes investment and saving—in part—to grow an economy. By the way it is not guaranteed that if we invest and save we will get a stronger economy. It depends on where we put it and that is another key thing about this scheme. I think that if Doug Woolerton’s son were to be left to his own devices he would be better off taking his own money and investing it into his mortgage his business and into his family rather than into a State-run superannuation scheme particularly given that he has a young family. That is the point. 
Investment and saving are important but it has to be good investment and good saving. The other thing is that just letting people keep a little more of the money they earn if they save in a particular scheme does not actually generate any economic growth or prosperity. It would be far better to do this: cut taxes across the board and flatten taxes across the board. That would produce—[ 
Interruption 
] Mr Woolerton says that he has heard it before. I am pleased that he listens to my speeches because he will hear it time and time again. The great thing is that in the 2009 Budget he will hear it and it will actually be happening. If we cut taxes and have a flatter tax system then we will get investment we will get savings and we will grow the economy. 
I can tell Mr Woolerton that his son will be far better off when our economy is growing at 4 percent 5 percent and 6 percent in real terms rather than at 2 percent in real terms. I can tell the Maori Party that Maori will be better off if they can keep more of their money and they will be better off if the economy is growing at 4 percent 5 percent and 6 percent than when it is growing at 2 percent. All this bill does is to take what money we have and redistribute it slightly and it says that we have to save it until we are 65. It does nothing—nothing—to boost the economic fortunes of our country. That is why I tell Mr Cosgrove that I am sorry I know he is looking forward to the day that the ACT party joins him in a vote—and I will tell him when that day will be; it will be when Labour returns to its glory days when it actually stood up for the working person of New Zealand actually stood up for the future of New Zealand and when it actually had a vision for the people of New Zealand—not this little Budget that tinkers around. 
In this bill the Government says to working people that it has this scheme that it is a savings scheme and that it knows that people do not want to invest in it. The Government is saying that what it will do is rob some money from people and that it will give them some of it back if they put even more money into its scheme. That is the deal Michael Cullen is promising New Zealanders—and Doug Woolerton is voting for a scheme that will reduce the take-home pay of New Zealanders. I do not get it. Thank you Madam Assistant Speaker.