Tremain Chris: KiwiSaver Bill — In Committee 
Tremain Chris: KiwiSaver Bill — In Committee 
[Volume:633;Page:4918] 
CHRIS TREMAIN (National—Napier) 
: 
 I rise to speak on Part 2 of the KiwiSaver Bill. I want to take this opportunity to get to the heart of some key issues of this part of the bill. I will canvass clause 7A “Outline of how people become members of overall KiwiSaver scheme”; clause 8 “Who automatic enrolment rules apply to”; and clause 9 “Meaning of new employment”. I will particularly focus on the compliance costs around this bill and temporary employees for a period of up to 28 days and—if time permits—round it out by having a look at the time limit for opting out. 
Clause 7A outlines how people become members of the overall KiwiSaver scheme. This is an issue which vexed the Finance and Expenditure Committee when we first considered the opt-out versus the opt-in provisions. Initially when the bill first came to us it was an opt-in situation. It was not until the select committee changed that particular rule that it moved to the opt-out position. The bill now essentially provides for opting-out and gives employees the opportunity to do so after 2 weeks. 
Clause 8 deals with who automatic enrolment applies to. There is an interesting point here that the Minister of Commerce may like to take a call on to give me an answer. Clause 8(b) states that it applies to people of the ages of 18 through to 65 so unfortunately when the Minister Lianne Dalziel at the tender age of 15 first conducted her working life and first started saving towards her new pair of boots she would have been unable to make contributions to KiwiSaver at that point. The vexing question—and I would be interested in her taking a call here—is what happens to an employee at the age of 64. Do these employees opt in for a year and will they receive the $1000 remuneration at the end of that year? Will the Government be forking out a significant amount of money to an employee aged 64 who is on $30000 and may have contributed only $400? Will the Government be forking out $1000 to those employees? 
I move to clause 9 “Meaning of new employment”. Again this was another vexing issue for members of the select committee purely because of the compliance costs that surround temporary employment which is specifically covered in clause 9A. This was something that the select committee focused on because the definition of “temporary employment” and who can be involved in the scheme is very important. Members will see that there is a new unanimous clause dealing with casual agricultural employees that moves them outside the scheme until they become permanent employees. More specifically it deals with employment that is “under a contract of service that is for a period of 28 continuous days or less.” This is another question I would like the Minister to consider. Is this period long enough given that a significant number of employees in our workforce move from job to job? I suggest to the Minister that the compliance costs around these temporary employees will be significant. 
I turn to the officials report to delve through what would happen if an employee enrols in the scheme after the 28-day period decides to opt out after a 2-week period then leaves that employment for another job. Let us go through the process. The employee starts the job and a deduction is made from the first pay. The employee then sends an opt-out form to the Inland Revenue Department. A deduction is made from the employee’s second pay. The opt-out form is received by the department it is processed and the employer is advised to cease deductions. The employer then has to send the deductions dating from the first pay to the Inland Revenue Department. The department provides a refund to the employee via the employer. Do not tell me that is not a significant process for an employer to go through! I suggest that the compliance costs surrounding temporary employees will be significant.