Copeland Gordon: KiwiSaver Bill — In Committee 
Copeland Gordon: KiwiSaver Bill — In Committee 
[Volume:633;Page:4907] 
GORDON COPELAND (United Future) 
: 
 I rise to make a brief contribution in terms of part 1 of the KiwiSaver Bill and clause 3 “Purpose”. I think it is relevant to actually read what clause 3 states: “The purpose of this Act is to encourage a long-term savings habit and asset accumulation”—two things: a long-term savings habit and asset accumulation—“by individuals who are not in a position to enjoy standards of living in retirement similar to those in pre-retirement. The Act aims to increase individuals’ well-being and financial independence particularly in retirement …” In short this bill is about savings and asset accumulation for retirement. 
I say straightaway that when I read some of the commentary—for example this morning in the  
Dominion Post 
—that somehow or other finds a mischief in the mortgage diversion part of this legislation I have the view that it is simply not looking at this thing holistically. Because the key to having financial security in retirement is No. 1 having a freehold home and No. 2 having some savings in the bank to supplement New Zealand superannuation. Both of those things are relevant. I might say too that when some of the commentators say there is no savings problem in New Zealand then go on to quote the fact that the price of housing in this country has skyrocketed over recent years and therefore if one takes the stock of housing now and divides it by the number of people in the country that average household wealth has gone up I want to say to them that it is all very cold comfort for people who are paying rent. Because one is either in the housing market or one is not. 
One of the very very sad things about this country which goes all the way back to 1975—as mentioned by the Minister Lianne Dalziel—is that we have never had a national savings scheme. I am sure that when John Key was in Singapore he would have picked up that Singapore now has the highest percentage of private homeownership of any nation in the world. Does Mr Key know—because he is a generation younger than me—who used to be number one? It used to be this country. That is the extent to which we have fallen behind in the last 31 years and it is time we got into catch-up mode. 
I would like to thank the three National Party members for the speeches we have had so far and for their compliments to me in relation to the mortgage diversion scheme. Since I have been in Parliament I have never before been portrayed in a way that I personally can somehow change the law of the country just because I decide to do it. I regard that as a tremendous compliment and I really do thank them for that. On that basis I think I should really be in line to become the Prime Minister because I thought she was probably the only one in the whole of the House who could actually do that. So that really is putting me in pretty exalted company and I am very very grateful for the compliment. 
None of the three National Party speakers in their 4 or 5-minute speeches seem to have actually figured out that the mortgage diversion relates only to 50 percent of contributions. That is the maximum that people can do—only 50 percent. Therefore the sum the member John Key did before is quite wrong when he said that people would end up with nothing going in. He said 2 percent from the employer would go in and 2 percent from the employee and then he said the employee would take out his or her 2 percent. No the employee will be able to take out only 1 percent maximum. That leaves 1 percent of their contribution in the scheme. Therefore it is 50 percent—or many hundred percent actually—greater than having nothing at all in the scheme which would have been the result if there were no mortgage diversion. 
So we are really looking here at a win-win situation. I hope the National Party members will get their minds around what this really means because I think it will be good for New Zealand and I am sure it will be good for savers. I am absolutely convinced the mortgage diversion will be greatly successful. In reality it was just an idea whose time had come and people who have thought it through have said that it will try to fulfil the purposes of clause 3. It is really fundamental to the whole purpose of what we set out to do in Budget 2005. I remind members that in that Budget we had a mortgage diversion element in the KiwiSaver scheme. That has been reinstated in a different form and in my own humble opinion in a superior form. It will be more effective than the original suggestion which was discarded by Cabinet back in about February or March of this year. So I just appeal to commentators to consider that. 
By the way I should say that the  
Dominion Post 
 
 New Zealand Herald 
 
and everybody else have picked up that people can divert only 50 percent of mortgage contributions but apparently the members of the National Party have not.