Foss Craig: Taxation (Annual Rates and Budget Measures) Bill — In Committee Third Reading 
Foss Craig: Taxation (Annual Rates and Budget Measures) Bill — In Committee Third Reading 
[Volume:672;Page:18964] 
CRAIG FOSS (National—Tukituki) 
: 
 I thought the previous speaker Damien O’Connor was going to speak on behalf of farmers about the proposed Labour turnover tax his having a farming background but I guess we will have to wait for another day. 
I will make a couple of points in respect of Part 2 which addresses some changes and enhancements to KiwiSaver. I will note a fact that members may be interested in. There are about 1.7 million New Zealanders I think in KiwiSaver right now. It actually begs the question why every New Zealander is not in KiwiSaver because of the $1000 upfront signage fee. It is interesting that when KiwiSaver was first announced the predictions were for about 500000 to 600000 sign-ups. It has been a roaring success; no one denies that and it has been acknowledged that KiwiSaver was brought in by the previous administration and good on it. 
Chris Hipkins 
: Well done Michael Cullen. 
CRAIG FOSS 
: I say to the younger member over there who was talking about it earlier— 
Hon Clayton Cosgrove 
: Oh you old thing you—you old tumbleweed. 
CRAIG FOSS 
: Well I am feeling a bit like that at the moment. KiwiSaver has been changed in every single Budget—and probably in between Budgets actually—under every Government since it was implemented. About half of those who are in KiwiSaver are locked into the 4 percent rate; half of them are locked into paying 4 percent. Even when the employer contribution went down to 2 percent they stayed at 4 percent. If members opposite go to the data instead of starting down the conspiracy route or something they would note that not as many people may be impacted by this change as they fear. Those who are on 2 percent now will in about a year and a half’s time go up to “3 plus 3” but those on 4 percent will not I am quite sure go down to 3 percent. When we start to look at the data we see that the numbers that members opposite are raising over there do not really stand the test of the true facts. 
Let me talk about KiwiSaver and what some of these changes are all about and in fact how they link into other changes in the Budget. Here is a very sad but quite brutal fact. Under the Labour administration who could members of the public in KiwiSaver invest their long-term savings in? Where did their money go? It went to finance companies. It went to failed finance companies. Under Labour they could invest in now failed finance companies and lose their capital. Under National via KiwiSaver they have the opportunity to invest in New Zealand infrastructure New Zealand energy companies and a further stake in Air New Zealand which are solid secure and long-term investments. 
Hon Members 
: Good grief! 
CRAIG FOSS 
: They do not like that. The mixed-ownership model is also addressed in the Budget and it is all linked into changes in and around KiwiSaver. In fact another fund that has not been mentioned on the other side of the Chamber that KiwiSaver funds will have access to is the Canterbury Earthquake Recovery Fund. Those members do not seem to be talking about that. Some of these changes will help enhance the ability of New Zealanders to invest in the reconstruction of Christchurch quite directly. I think members on the whole think that is a good thing and I ask members on the other side of the Chamber to excuse me if I am misrepresenting them on that one—I certainly do not mean to. I look forward to their speeches on that during the debate on the Taxation (Canterbury Earthquake Measures) Bill which is coming up next. 
There is another way in which this Budget and this bill enhance New Zealanders’ savings. Inflation kills financial assets. Under this Government and under this Budget inflation has been well inside the Reserve Bank’s band enhancing the real value of financial assets and savings. Actually savings also face a 28 percent tax rate; it no longer is the 33 percent or 39 percent rate that there was under the previous administration. Under the previous administration inflation ran north of 5 percent eroding and attacking the long-term superannuation savings of New Zealanders. 
So I do not understand how members opposite can get up and talk about what their views on savings are without addressing and acknowledging what this Budget does to improve maintain and enhance savings for retirement and the general savings of all New Zealanders.