Parker David: Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill — In Committee 
Parker David: Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill — In Committee 
[Volume:666;Page:13458] 
Hon DAVID PARKER (Labour) 
: 
 Firstly I will respond to Gerry Brownlee’s interjection during Shane Jones’ contribution. Mr Brownlee asked what Labour did for New Zealand investment and New Zealand ownership. Well it is a very long list I say to Mr Brownlee and I am sad that Mr Brownlee as the Minister for Economic Development does not realise that. 
What did Labour do? Well we set up the Cullen fund so that in a time of Government surpluses the Government saved towards future retirement costs. We did that against the opposition of the National Party. National at every Budget called for what were patently unaffordable tax cuts which would have meant that we were not running a surplus in a time of plenty and that New Zealand would now be in the same position as Portugal Spain and Great Britain. We would not have been as badly off as Greece but we would have been on the road to having the problem Greece has with rising Government debt because we would not have put away money in a time of plenty. That is the first and probably the most important thing we did. We ran Budget surpluses consistently and we had tax cuts only when the economy was going into recession so that they were countercyclical. 
The second thing we did was recapitalise Air New Zealand. We made sure that Air New Zealand was maintained in the ownership of New Zealand. Who opposed that? Does anyone remember? 
Hon Members 
: National. 
Hon DAVID PARKER 
: That is right—National opposed that. What else did we do? With the leadership of Jim Anderton we set up Kiwibank. Jim Anderton actually deserves more credit for that than Labour does but we supported his doing it. Kiwibank has been an outstanding success. What else did we do? Someone yelled out “KiwiRail”. That is quite right. We made sure that the monopoly rail infrastructure was in New Zealand ownership and that was the right thing to do. What else did we do against the criticism of the National Party? We maintained Auckland Airport in New Zealand ownership when the National Party said it should be flogged off. 
What else did we do? We set up KiwiSaver. What has National done? Well if we look back a bit we see that it cancelled the Kirk savings scheme. I give credit to Sir Roger Douglas because for decades he has consistently supported improved savings in New Zealand. He was the designer of the Kirk scheme. It was National that reversed that scheme. As Brian Gaynor recently said in the  
New Zealand Herald 
 
if that scheme had been left to mature the New Zealand capital markets would be $300 billion deeper than they currently are and we would probably be in even a better position than the Australians are. They are plainly better off than New Zealanders because of their deeper capital markets. National also scuppered the Peters superannuation savings plans which were backed by ACT in the late 1990s. National has undermined KiwiSaver. 
National is not running Budget surpluses; it is running excessively large Government deficits to pay for its ridiculously extensive and unaffordable income tax cuts 35 percent of which go to the top 5 percent of income earners I think—the people who already earn the most in New Zealand— 
Stuart Nash 
: That’s not fair. 
Hon DAVID PARKER 
: It is patently not fair. It is one of the reasons why New Zealand’s Government deficit is so large. 
Against that background what economic plan did we have from the Government in February this year in its February document? At that stage it was still promising a step change in the New Zealand economy. It was focusing on extensions to mining it talked about the possibility of New Zealand being a financial services hub but it did not talk about savings. It did not talk about savings. What happened in August this year in the Government’s latest plan? There was still no talk about savings on 1 August this year despite that being the standout difference between the New Zealand economy and the Australian economy. The 1 August plan stopped talking about any step change in the New Zealand economy; the Government has given up on that ambition. It will not make any promise for which it can be held accountable between now and 2025 for bridging the wage gap with Australia notwithstanding the fact that that was National’s central election promise at the last election. The 2025 date is a long way out and the gap is growing wider. The Government has been widely criticised in the media for trying to spin the numbers to pretend that the gap is narrowing when it is in fact widening. But still there was no talk on 1 August in respect of savings. 
Now we have a committee. Now we have a committee that is to report at the end of the year. It is due to report at the end of the year on what is probably the most serious challenge facing New Zealand—that is the contribution of our invisibles to our current account deficit. It is caused by New Zealanders consuming too much and not saving enough. It is a problem that has bedevilled New Zealand for decades and is bad now. So the Government set up a committee. I thought that as the Government it was meant to lead. I thought that after 9 years in Opposition National would have some idea as to what it wanted to do. After close to 2 years and two Budgets it has come along to Parliament and conceded that the Labour Party is right and that it needs to improve New Zealand’s savings. That is essentially its message at the moment. It is not yet admitting it was wrong to undermine KiwiSaver; it is not yet admitting it was wrong to run Government deficits to pay for income tax cuts 35 percent of which go to the top 5 percent of earners; it is not yet admitting that it is wrong to stop contributions to the Cullen fund; and it is not yet admitting that it has got the tax mix wrong. But it has set up a committee to give it advice on all of those issues because it does admit that New Zealand is not saving enough. After two Budgets and 2 years it admits we have a problem with as Shane Jones says capital accumulation. It admits New Zealand has a problem in our failure to properly save but it does not know what to do. 
That is an indictment upon a Government in respect of a country that has growing unemployment a growing wage gap with Australia and broader and broader realisation amongst New Zealanders that the problem—or a major part of the problem—is our lack of savings. It is an indictment that the Government has taken 2 years to get to that position after it had 9 years in Opposition—9 years in Opposition. It ought to have realised before now that the major difference between New Zealand and Australia is not mining schedule 4 land and land in national parks but New Zealand’s relative lack of savings compared with Australia’s. 
The Government has squandered the last 2 years. By December this year it says it will have some recommendations. Well by that time we will be in the last year before the election. The election has to be held by November next year and there are rumours that the Government will hold the election before the Rugby World Cup in July or August next year so effectively it will have wasted a whole term in office in respect of the single most important economic issue facing the country which is our relative paucity of savings. The fact is that every year we get poorer. More and more of our country is sold off overseas because we are running a current account deficit so much of which now relates to invisibles—the interest and dividend flows that are paid to overseas investors in New Zealand. 
The Government has not taken any steps in respect of savings except negative ones. The list of the negative steps the Government has taken is long: stopping the contributions to the Cullen fund undermining KiwiSaver and of course the tax cuts which are too much weighted to those already on high incomes—35 percent going to the top 5 percent of income earners. We have a Government deficit of many more billions of dollars every year than would have been necessary had National’s tax package been more responsible and more equitable. 
It is lamentable that after inheriting one of the strongest Government balance sheets in the world from the prior Government this Government has both squandered what it inherited and gone backwards on what is the most important difference between New Zealand and Australia—that is savings. The Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial matters) Bill which we are currently considering ought to have provisions that strengthen KiwiSaver; it ought not to be limited to measures that ease the trans-Tasman transferral of KiwiSaver and Australian superannuation savings balances. That is a good thing to do but it misses the bigger point that New Zealand is short of savings. The Government is transparently without any adequate plan in this area. It has been exposed for its inadequacy on this front once again.