Roy Heather: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
Roy Heather: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
[Volume:639;Page:9490] 
HEATHER ROY (Deputy Leader—ACT) 
: 
 Contrary to what the New Zealand First member Peter Brown said the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill is an awful bill and ACT will be opposing it. 
Dr Cullen came down to this House not long ago and berated the National Party—I think he came down to do only that—about misrepresenting the figures. Well I have news for Dr Cullen. He is the one who cannot do his sums. He has absolutely no idea what he is talking about. John Key was quite right when he said in this House yesterday that employers were receiving a $1 billion tax cut but were not told in advance that they would have $2 billion taken from them. Dr Cullen said that was not correct but in fact it is correct and if he had bothered to do his figures he would have seen that. John Key also said that workers would receive a hit to their pay packets as employers sought to claw back pay increases to offset the cost of their compulsory KiwiSaver payments. 
We are seeing nothing wonderful from this Budget. It is a case of having one little meagre token on the one hand with the Government taking a whole lot back on the other. That is the reality of this Budget. The legislation that we are debating the third reading of now is designed to put all of this in place. 
In fact if Dr Cullen had taken the time to do his figures he would have seen that a salary earner on $40000 a year would cost his or her employer $392 above the money that the employer receives from the Government via the subsidy—the employer will be $392 worse off. For someone earning $60000 the net cost to the employer will be $952 per year and for somebody earning $100000 the net cost to the employer above the subsidy will be $2072. Quite how that equates to employers being better off at the end of the day escapes me. The threshold seems to be about $27000. Anybody earning above $27000 will cost his or her employer money in terms of the KiwiSaver bill. I see that nobody on the other side of the House is able to refute that fact. 
The comments made by the Maori Party speaker who spoke before me Te Ururoa Flavell were absolutely right and I endorse them. Many people around the country are talking about KiwiSaver today because they know they will be worse off and will not be eligible to participate. Anybody earning about $15 an hour or less cannot afford the 4 percent contribution in savings let alone an 8 percent contribution. So those people who are least able to provide for themselves in their old age will not be able to benefit at all from this legislation. If that is what Labour calls a caring Government I ask members to please show me an uncaring one because that is just a travesty. 
The previous speaker also quoted from Michael Littlewood in today’s  
Press 
. He had some very good and pertinent comments to make and I would like to tell members a few of the other things he said. He said: “Until recently New Zealand had a simple transparent tax and retirement income structure that has served us well. In fact it was a world leader in simplicity transparency and equity”—[ 
Interruption 
] 
The ASSISTANT SPEAKER (Ann Hartley) 
: Order! 
HEATHER ROY 
: I will repeat that sentence because I think the member from Wanganui who will not be here for much longer missed it. I say to Mrs Pettis that she should listen to this: “In fact it was a world leader in simplicity transparency and equity …”. But what we will see as a result of both these bills which we have had to come back and sit through on a Friday when we should be out there talking to our constituents is complex legislation full of detail that will make our tax system much much more difficult. 
Hon Harry Duynhoven 
: You haven’t got any constituents. You’re a list MP. 
HEATHER ROY 
: I thank Mr Duynhoven but I take my duties seriously and I too see constituents. 
The worst news about KiwiSaver is that tax breaks now mean it might make sense for families who cannot afford 4 percent—and a lot of people cannot—to borrow their required KiwiSaver contributions in order to join and get the tax breaks and subsidies. When we have perverse incentives put forward by this Government which is supposed to care for the people what hope is there? 
We seem to be intent on ignoring the incentives that have been put forward by other Governments with regard to saving but in fact more savings seem to be an outcome of economic growth rather than a cause. The richer a country gets the more its citizens save. 
I would like to briefly examine some of the statements Dr Cullen made and some of the things that were announced in yesterday’s Budget. Quite some time ago Dr Cullen promised us that his policies would bring New Zealand 4 percent GDP growth. He went further than that in fact and said that he would stake his reputation on it and that it would be his yardstick. 
Well let us see what he has achieved. What do we have today? We have 2 percent economic growth. Is that turning us into a wealthy country when our target was 4 percent or possibly more? Absolutely not. What is Dr Cullen’s target his forecast for the next 3 years? It is for worse economic growth than we have today: less than 2 percent. What is Dr Cullen’s forecast for the next 5 years? It is for a mere 2.3 percent economic growth. It may be news to Dr Cullen that this will not get us into the top half of the OECD. Dr Cullen has failed. If we were looking at it in terms of National Certificate of Educational Achievement parlance we would say that he has earned a mark of Not Achieved. That is hardly satisfactory when he is targeting 4 percent economic growth. 
ACT would have liked to see several significant things in the Budget that would lead to economic growth in this country. ACT would have dropped the income tax rate to 20 percent. There has been a drop in the company tax rate to 30 percent. This of course is a move in the right direction but the top rate of personal tax should have been dropped to match that 30 percent at the very least. Ideally we should have had income tax dropped to a rate of 20 percent across the board. 
Government spending should have been held in real terms. It has increased by 32 percent during the time this Government has been in power. What have we seen in return for an increase in Government spending of 32 percent? Well in the health sector we have seen nothing at all. In fact we are moving backwards and most other Government departments cannot put forward a much better prospect. 
Bob Clarkson 
: We’re better than Chad! 
HEATHER ROY 
: We are better than Chad. Well that is a relief is it not? ACT would have dealt to red tape through a regulatory responsibility bill. Fortunately for this country there is one of those bills on the Order Paper—Rodney Hide’s bill which I hope the House will look at very carefully realise the sense of and vote in favour of. We should have been demanding transparency and accountability for all Government departments through service level agreements that would see heads of departments fired for failure to deliver and Cabinet Ministers held accountable when they do not keep their promises to the people of this country. We hand over our taxes in good faith in return for services that we should be able to expect but that are too often not delivered. Cabinet Ministers should be held accountable for that. 
In this Budget we should have seen shares in State-owned enterprises distributed to everyone so that every New Zealander every Kiwi would be a stakeholder in those. The Cullen fund should have been dismantled with a dividend paid into everyone’s KiwiSaver or given to an education endowment. That would have been a real Budget—a Budget that New Zealanders could have been proud of. That would have seen economic growth in this country not the economic growth of less than 2 percent that Dr Cullen is forecasting for the next 3 years nor the mere 2.3 percent forecasted for the next 5 years. Dr Cullen has failed his own self-imposed yardstick. 
The ACT party will not support this bill or the Budget. It is an awful Budget. It is a Budget where employers have been hoodwinked. They thought they were getting something that would help them compete overseas and help them with productivity. Instead they have been given something with one hand and it has been taken away with the other. That will not do anything for the future of this country. New Zealanders—like the Opposition in this Parliament—should be very very disappointed indeed with this Budget.