Tisch Lindsay: Budget Debate 
Tisch Lindsay: Budget Debate 
[Volume:639;Page:9553] 
LINDSAY TISCH (National—Piako) 
: 
 The only bold statement I will make tonight is “Happy Birthday!” because it has been said that this Budget is bold. Well it is certainly not bold in terms of growth and productivity and as the eighth Budget that Dr Cullen has presented it is ill-disciplined and lacks the opportunity to progress the fortunes of New Zealand. 
I was sitting here watching the body language of members opposite and it was interesting to see what a sorry sight it was when they were hearing a Clayton’s Budget—a Budget when one is not really giving a Budget. It was a sorry sight indeed because that Budget was a lost opportunity to get New Zealand moving forward in the OECD and a lost opportunity to say that here we had a Budget surplus that could be shared around by way of tax cuts. But no what has happened is that the most vulnerable in our communities will now be hit. They will be hit because they do not have the means by which they can save and put in to the KiwiSaver scheme. So they will miss out—and this is the first hoax of the Budget. 
We have a scheme to be implemented where only 50 percent of eligible workers will have the means the resources to be able to save and the others will have to carry the can. They cannot afford the scheme. Their priorities are in paying the mortgage if they own a home paying the rent putting food on the table clothing the family and providing for the necessities of life. That is where their priorities lie and unfortunately they will not be able to participate in the KiwiSaver scheme because they do not have the resources. 
In fact in question time the Government was asked how many people would take up the scheme and it has been identified that only 50 percent of those in the working environment will be able to take it up. So it is the most vulnerable who will miss out—those people who in the past would have supported this minority Government. Well I can tell you what they will not be supporting it in the future because they have been ratted on. They have been ratted on by this Government and in relation to what this KiwiSaver scheme does who knows in 30 or 40 years what living standards will be and what the money put aside will do. We would argue that having money in the hand today is worth more than putting money aside in some scheme for retirement when we do not really know what the costs will be. 
The worst part of this of course is that workers have been told not to come along and ask for a wage increase. Employers will take 4 percent gross out of the salaries of those workers who want to join the scheme but workers should not then come around and say: “Hey I want to be compensated for that. I want to have more money in my hand because I have committed to the scheme and 4 percent is coming out.” No they have been told not to do that and not to ask for increases. Sadly once again it is hard-working Kiwi workers who will miss out. That is the hoax of the scheme—that those who can least afford it will be supporting those who are comfortably off and who will of course take advantage of it and take up the opportunity there. 
Government speakers argued in a previous debate before dinner that they had raised the minimum wage to $11.25—whoopee! How does that actually make it easier for someone to save? You see this is about a cross-subsidisation. This is about those on lower incomes supporting those who do not need the support because they have the means to save. They will be continuing— 
Jill Pettis 
: Like all ex-MPs. 
LINDSAY TISCH 
: Like MPs—the member is right. 
Jill Pettis 
: Ex-MPs. 
LINDSAY TISCH 
: Well we will be able to participate in this KiwiSaver scheme and the “ex-member” over there will certainly be able to do that. 
The second hoax of course—and this was never identified earlier on—is that employers will compulsorily have to contribute to the scheme and that was certainly not identified in earlier debates or discussions on KiwiSaver. There are about 300000 small businesses or small to medium sized enterprises in New Zealand and 60 percent of them—that is 180000—are either sole traders or partnerships. So they will not get the tax break because they are not incorporated. The 40 percent of the 300000 that are incorporated will be able to get the corporate tax rate reduction from 33 percent to 30 percent which is a 3c saving. But the cost of implementing the scheme and the cost in compliance that it is going to take for those people will be well in excess of the 3c that will be saved. This is a hoax because it is another compliance cost on business and business had no part in it. What will happen is that we will find that businesses will say they are not going to take on staff . They will say they are going to retrench. That is what they will do because this is a huge cost on top of other increases that have happened just recently. 
Back in mid-April the official cash rate was moved up because of Labour’s spending binge. That put pressure on small to medium sized enterprises because a lot of those businesses used their homes as security for working capital. So as soon as the interest rate went up what happened? There was another compliance cost. That is what is happening. So along with KiwiSaver that is another huge compliance cost to be dealing with. Of course if people are exporters they have to deal with the high dollar. But then we had road-user charges go up—another compliance cost—where there was only 48 hours’ notice of those costs going up. If I am a transport operator I have to enter into forward contracts and I set prices. As soon as I am hit with increased road-user charges then I cannot pass those costs on because of those contractual arrangements. So that is another example along with KiwiSaver where the compliance costs for businesses will be very horrendous. 
Labour hits small to medium sized enterprises because it does not understand what makes the world go around. Labour members do not understand that this scheme affects growth and productivity in our communities so they are prepared to go out there and say to employers that it will be a compulsory scheme: “You are going to have to contribute; it is going to be a compulsory scheme.” The latest survey by KPMG said that the costs for a small business—a small to medium sized enterprise employing fewer than 19 people—is about $3000 per employee. That is a huge compliance cost. For larger operators it is about $300. 
Jill Pettis 
: Rubbish! 
LINDSAY TISCH 
: Well members have only to look at the survey to see that I am right—this is not me saying it; this is KPMG coming out with these latest figures. But let us have a look at what was in the  
Dominion Post 
 yesterday—I like this one: “Labour may have lost SME vote”. That referred to a survey done before the Budget which said that businesses had little confidence in the Government and that 41 percent of businesses gave Miss Clark the thumbs down. And that was before the Budget. The headline states: “Labour may have lost SME vote”; I can tell members that Labour now has lost it. Labour has absolutely done its chips on this and it deserves to be out. It is going to be out anyway. 
The Budget fails to realise—and this is what I said earlier on—the aspirations of what could have happened. In the area of tourism that I have responsibility for the vote has actually gone down from what it was last year—it has absolutely gone down. In fact over the next 4 years Vote Tourism—if members want to look at it it is there on page 1209—will go down with a cumulative decline in funding for tourism of $40.5 million. This is New Zealand’s biggest export earner. Tourism is the fastest-growing business in the world and this Government has not taken it seriously. In fact its projections over 4 years show a reduction and Vote Tourism is going down from $80 million with a $40.5 million decline. 
This Budget has not met the expectations of New Zealanders. It does not provide for growth and opportunity. It does not provide for the productive sector to make it attractive for Kiwis to stay and invest here. That is why we are seeing 700 Kiwis a week deciding that Australia’s prospects are better than the prospects are here. I think Mike Moore’s comment in the paper today that it is better across the ditch than it is here is a telling indictment on this Labour Government which will be out very very shortly. This Budget was an opportunity lost.