Rich Katherine: KiwiSaver Bill — In Committee 
Rich Katherine: KiwiSaver Bill — In Committee 
[Volume:633;Page:4928] 
KATHERINE RICH (National) 
: 
 Just to follow on from the comments of the last member Doug Woolerton I agree that parents will continue to encourage their children to consider some kind of superannuation or savings programme. The issue though is actually getting younger people to take one up. Going back to my own experience I recall that when I first worked for a Government department we had a superannuation scheme. There was a great incentive to join the scheme: basically one doubled one’s money. If employees put in $1 the Government put in $2. But even with the best incentive younger people decided that they wanted to have their own cash and to have a bit more to go out with on the weekend. Even though the incentives for them to take part in that scheme were put in black and white the employer still could not get people to join up to have a vision of what their life would be like when they turned 65 and to put money aside for their retirement. 
We need to talk more about the cultural change that needs to happen but I do not have the same faith that the Government and the previous speaker do that this bill will change culture at all. KiwiSaver is quite a complex system. The Government will argue that the incentives are there but actually they are not. The system is a pretty loose arrangement whereby one can opt out if one wishes. It is a pretty loose arrangement whereby one can decide to have a contributions holiday. Well we all know that people will go and do that. They will dream up some reason why they have to postpone putting away a nest egg and have a contributions holiday. A number of people will opt out right from the start. 
As we have heard from John Key there is no incentive for employers to put this scheme in place; there is no incentive for employers to offer a scheme to their staff. I will get on to the subject of what this bill will do for small-business owners in New Zealand. This bill will impose upon them a very complex system. I would like to hear the Minister Lianne Dalziel talk about the complexity that a small-business owner will face when he or she sits down at the end of every pay period to work out whether it is 4 or 8 percent of an employee’s wages that goes into the scheme. In many cases the amount of wages will change over pay periods so the contribution will often not be just a direct credit—it will have to be changed for every period. Small-business owners will have to monitor whether someone has opted out and will have to keep tabs on who has made a request for a contributions holiday over a period of months—not to mention do the PAYE and GST. And what happens if an employee has a student loan to pay off or is paying child support or some other court debt? It just adds to the complexity that small-business owners will face when they are just trying to work out what to put in their staff members’ pay packets at the end of every pay period. It will not be easy. 
We assume that people are aware of the laws of this country but I know one thing for sure. Here we are passing a bill that is 205 pages long. We cannot hope for one moment that the knowledge of what is in here will be firmly implanted in each small-business owner’s head. It will not be so this will be fraught with difficulty. I would like to hear the Minister talk about what kind of education programme will be in place and what ideas she has to try to minimise the complex nature of this bill so as to make it easier for small-business owners to implement it within their workplace. Employers will try to establish what to pay someone at the end of a week a fortnightly period a month or whatever it is but that amount will change and it will take a lot longer for some small-business owners to work the process out. I think that is something we should talk about here. 
It was interesting to hear the Minister talk about the dancing Cossacks of 1975. It was quite a long bow to draw to suggest that that is the key reason the savings culture has died in New Zealand. Some of the members across the way were not even born in 1975 so it is hard to imagine how their attitude to saving has changed. For us to hear lectures about National buying elections is ironic coming from a Government that spent billions of dollars on the student loan scheme.