Parker David: Taxation (Urgent Measures and Annual Rates) Bill — In Committee Third Reading 
Parker David: Taxation (Urgent Measures and Annual Rates) Bill — In Committee Third Reading 
[Volume:651;Page:244] 
Hon DAVID PARKER (Labour) 
: 
 I want to start by referring to a statement made by the Hon Bill English in his last contribution which stood in stark contrast to things he has been saying outside the House recently. In response to Dr Cullen’s point highlighting the importance of KiwiSaver in improving the savings of New Zealanders Bill English said that the effect of cutting KiwiSaver was being fed back to people in tax cuts that they would use to retire debt. I thought that the National Party was saying that the tax cuts were part of the fiscal stimulus that would increase economic activity. Mr English cannot use the money for two purposes. It is either a fiscal stimulus or it is being used to retire debt. It cannot be both. That will be recorded in  
Hansard 
 and I think it ought to be remembered next time National members point to tax cuts as being part of their fiscal stimulus package. 
“Going for growth” was the slogan yesterday and it is but a slogan. National wants to improve productivity in New Zealand. New Zealand workers already work very hard. We work longer hours than Australian workers. We work longer hours than most people in OECD countries. Our problem is not how hard our workers work it is how productive the output of their labour is. Total factor productivity in New Zealand is poorer than in Australia because we have lower savings than Australia and in addition so many of our important assets are owned by overseas owners because we do not save enough money to own our own assets and we are reliant on overseas capital to fund our assets. KiwiSaver was the key to fixing that. It made us more like Australia where Australians have a 9 percent contribution to their savings scheme all paid by the employer. The “4 plus 4”—4 percent from the employee and 4 percent from the employer—under KiwiSaver plus a $1040 tax credit to the employee was pretty similar. New Zealanders would have started to accrue savings so that we could own more of our own country so that we could invest in increasingly sophisticated plant and equipment so as to improve total factor productivity to add to the very hard work that is already done by New Zealand workers. 
But oh no that sensible prescription for economic growth has been ruined by the National Party as a result of turning it from a “4 plus 4 plus $1040” scheme into a “2 plus 2” scheme. National members say that the scheme will be more accessible to people yet they have admitted that their projections are that no more people will enrol in the scheme. So the same number of people will be in the scheme but they will be saving less. How does that improve the wealth of New Zealand? How does it improve the productivity of New Zealand? The answer is that it does not. It does exactly the opposite. 
Hon Darren Hughes 
: No go for growth! 
Hon DAVID PARKER 
: That is right there is no go for growth. As a result of this 800000 New Zealanders—the 800000 people who are already in the scheme—will be worse off. But even more significant is the difference between us and Australia. For a long time the National Party has been rattling on about people moving to Australia for higher incomes. Australians have higher incomes because they have higher total factor productivity and they own more of their own country. If we have less sophisticated plant because we cannot afford as much because we have a higher cost of capital in New Zealand or because we do not save enough productivity in New Zealand will never get towards the productivity increases seen in Australia and the income gap will continue to grow. That gap stopped growing under the Labour Government. We had it halted but just watch it will grow again.