Key John: KiwiSaver Bill — In Committee 
Key John: KiwiSaver Bill — In Committee 
[Volume:633;Page:4924] 
JOHN KEY (National—Helensville) 
: 
 The only thing worse than Charles Chauvel’s best speech so far which we heard a few moments ago—“I move that the question be now put.”—was Lianne Dalziel’s speech just before. She told us she was opposed to New Zealand superannuation. It is no wonder that Labour spent $882000 trying to buy the last election—if it had come in with that policy it would be spending $3882000 of taxpayers’ money. Lianne Dalziel told us she did not like what the National Government did when it came into office in 1975. It got rid of the scheme that was in then and introduced New Zealand superannuation. It is a universal scheme that all New Zealanders can access it is world-acclaimed for being elegant in its ease to look after and it does not differentiate between people in and out of the workforce. It is a scheme that works tremendously well and Lianne Dalziel just told us she does not like that scheme. That is very interesting from a Labour Minister. It is no wonder that Labour stole $882000 of taxpayers’ money to buy the last election. 
This is very interesting. I draw members’ attention to the contribution rate in Part 3 which is either 4 percent or 8 percent. Maybe someone would like to explain to me how someone in New Zealand earning $43000 the average wage and who is getting overtaxed will be able to afford to put in 4 percent of his or her gross income. The fact is that that person will not be able to make that contribution and the Minister and the Government know it. That is why the withholding tax that currently earns the Government about $550 million will be reduced by only $35 million once KiwiSaver comes in. The Government knows that the only people who will take up KiwiSaver are higher-income New Zealanders who will use this scheme to drain out a little bit to repay their mortgage through mortgage diversion and who will actually have the higher tax benefit when they either pay it themselves or pay it through the scheme. 
A second group of people will use clause 87 which is all about how to apply for a contributions holiday. This is the way it works. Employers have to tell people that they have been compulsorily opted into the scheme. The Government thinks the reason people do not save is that they have inertia. I have a different theory on that. 
Hon Lianne Dalziel 
: No no. 
JOHN KEY 
: Yes it is. That is what the Government thinks. It thinks people do not save because they have inertia. Actually I have a different reason. I think the reason people do not save at least in one part is that they do not have enough money to save. They have to pay their taxes their rates—which have gone up—and their mortgage rates which are very high because we have a Government that would rather go out on a hiring binge and hire huge numbers of people from hell— 
Hon Maurice Williamson 
: Helengrad. 
JOHN KEY 
: —Helengrad. Those are reasons why those sorts of people are in that position. They cannot afford to save. Now the Minister is telling us they will save. They will go along to their employer who will have to offer them the scheme and this is what will happen. My view is that the vast bulk of people will immediately tell their employer that they want to opt out. Those who go into the scheme will then be locked in for 12 months unless they can prove financial hardship. That will be a very interesting situation. The Finance and Expenditure Committee never really got an answer on the way the courts will determine financial hardship. My guess is that financial hardship will be tested. Some people’s definition of financial hardship is not paying the Visa bill. Some people’s idea of financial hardship is not having a holiday. For other people it will be when they cannot afford to put food on the table. It will be up to the courts to decide how financial hardship is actually interpreted. My view is that that will be pretty interesting. Those who do go into the scheme will seek to have a contribution holiday. They can do that after 12 months and can do it for 5 years. Why will they seek to do that? In part it is because they will decide they want to use the money. 
This is the interesting thing. Many people who are working for an employer and who change company to one that does not have a KiwiSaver match contribution will in my view drop out. 
Earlier I took a call on Part 2. I would have liked an extended call but I was closed down by Charles Chauvel’s speech which was the best speech he has given in Parliament so far. I thought the  
Dominion Post  
was a bit cruel. It stated that Mr Chauvel’s maiden speech was nothing flash—that there was nothing special in that speech. It sort of cuts to the quick when one is first in Parliament and comments such as that are written but after a while one gets used to it. It is no big deal.