Shaw James: KiwiSaver Budget Measures Bill — First Reading Second Reading In Committee Third ReadingText is incorporated into the Bound VolumeShaw James: KiwiSaver Budget Measures Bill — First Reading Second Reading In Committee Third Reading[Sitting date: 21 May 2015. Volume:705;Page:3860. Text is incorporated into the Bound Volume.]JAMES SHAW (Green):I just wanted to respond to the Minister Nick Smith who I am grateful actually responded to one of my questions. That has been a rare treat during the course of the debate—actually having a response to any of the questions that we have put. I just wanted to check that the Minister said that in a year’s time 100000 more people will have signed up to KiwiSaver—Hon Dr Nick Smith: Correct.JAMES SHAW: —because the member tax credit will be remaining in place. So that incentive still remains within the scheme which I understand. But the Inland Revenue Department report said that the $1000 kick-start contribution was the most effective incentive of the package of incentives within the scheme. I just wanted to refer to the regulatory impact statement which also said that if you were to for example halve the member tax credit then in the next financial year you would save something along the lines of $339 million whereas removing the kick-start saves $175 million. So just halving the member tax credit would actually save more money than removing the kick-start and the kick-start from all the evidence that we have seen so far is actually the more effective component in terms of getting people into the programme.I am just a bit concerned about some of the evidence that we have seen. I recognise that because we are in an urgency process and we are not able to go through the normal standards of scrutiny and hearing from experts some of the evidence is thin on the ground but some of the other things that the regulatory impact statement says give me some cause for concern including page 8. It says that “The analysis has focussed on fiscal savings from changes to KiwiSaver.” We have heard many times over the Government make its case for making fiscal savings for the Crown as opposed to responding to some of the concerns about the impact on New Zealanders. It goes on to say: “We have not undertaken a comprehensive analysis of the effects of these policy changes on other policy issues which have been discussed in the context of KiwiSaver changes in the past.” It says in paragraph 52: “We have not considered the extent to which a reduction in the generosity of the kick start and annual member tax credits will affect the future success (or otherwise) of the HomeStart policy.” In paragraph 55 it says: “it is highly unlikely that the target effectiveness can be materially improved if the target group remains as defined by the Act.” So in other words the principal purpose of the Act is being undermined by this piece of legislation.We get that this will save the Government money. We understand that and we understand the pressure that the Government is under and has put itself under to reduce the deficit and eventually to get the Government books back into the black. We get that but there are still some real questions about why the Government has chosen the particular mechanism it has in removing the kick-start rather than other routes that it might have chosen. We have not yet heard a response to the question of why it is that the Government is implementing this immediately as opposed to over a 6 or 12 or 18-month window to incentivise those who are currently not in the scheme to get into the scheme. We have not yet heard an answer to what the Government’s plan is to increase the savings rate once the incentive to do so is removed.We have not yet heard a response to the ANZ chief economist who said that removing the incentive will reduce the rate of take-up—that was actually my concern that the rate of take-up was going to be reduced. If the Government disagrees with the ANZ chief economist then what is the plan to maintain or increase take-up in the scheme in the future? We have not yet heard a plan for how we handle some of the intergenerational equity issues that my colleague Jan Logie was speaking to. And we have not yet heard a response to why the KiwiSaver is being cut now but the rest of the hardship package does not kick in until the next financial year—why there is a gap there. So there are still I am afraid a number of questions that we do not have answers to but I do thank the Minister for his substantive response earlier.The question was put that the amendment set out on Supplementary Order Paper 81 in the name of James Shaw to clause 5 be agreed to.