Volume 705 Week 16 - Thursday 21 May 2015(continued on Saturday 23 May 2015)Text is incorporated into the Bound VolumeVolume 705 Week 16 - Thursday 21 May 2015(continued on Saturday 23 May 2015)[Sitting date: 21 May 2015. Volume:705;Page:3789. Text is incorporated into the Bound Volume.]Thursday 21 May 2015(continued on Saturday 23 May 2015)KiwiSaver Budget Measures BillFirst ReadingDebate resumed.The ASSISTANT SPEAKER (Hon Trevor Mallard): The House is resumed. When we were suspended last night we were debating the first reading of the KiwiSaver Budget Measures Bill. The Hon Ruth Dyson was speaking and she has 5 minutes and 30 seconds remaining to speak if she so wishes.Hon RUTH DYSON (Labour—Port Hills):I certainly do wish to continue the speech that was so rudely interrupted at midnight. It seems like just a couple of hours ago when the Hon Maurice Williamson was contributing so strongly to this debate. It is a sad day when the National Party rejoices in taking $1000 out of the pockets of hard-working New Zealanders particularly those people who have found it so hard to save and put aside money but know they should build up their KiwiSaver accounts so that they will have better financial security in their older days. The National Party members last night were making it very clear that they had no understanding at all of what it is like for people for whom $1000 is a target they would never be able to reach without the support of the Government. Those people are now seeing that money go away.I heard some National Party members yesterday talking about the $25 increase in benefits and how that would justify it. That is 40 weeks of benefit being lost by this bill this KiwiSaver Budget Measures Bill. It is not a one-off. It is not just a one-off with Bill English scrambling to try to get another surplus which he has again failed to reach. For the seventh year in a row there is no Budget surplus despite two election promises: the 2011 election promise of a Budget surplus this year and the 2014 election campaign promise of a Budget surplus this year. Those are two significant election campaign promises broken in this Budget yet again. This is a mean-spirited bill that takes away that $1000 for KiwiSaver savers.About half a million New Zealanders many of whom are young people just entering the workforce and about 70000 children will now miss out on getting that $1000 kick-start to KiwiSaver. What makes it even worse what makes it more unfair is that it is retrospective. It started from 2 o’clock on Budget day even though by the parliamentary calendar today is Budget day. Today is still Thursday. The rest of the world has actually moved on and for them it is Saturday. It is going to be a long Saturday for the National Party.Iain Lees-Galloway: When do the benefit increases kick in?Hon RUTH DYSON: That is a very good question from my colleague Iain Lees-Galloway MP for Palmerston North. The benefit increases do not start until 1 April next year but the KiwiSaver cuts that this bill is all about started from 2 o’clock on Thursday of the week that we have just ended.This is retrospective legislation being rammed through this Parliament all stages under urgency. I wonder why that is. Is it because there is some genuine urgency to this legislation? Is there a desperate need for this measure to be introduced? No. It is like all the other measures that are being put through under urgency. It is because none of the National Party members can front up to members of the public let alone their own constituents for those who are electorate MPs or for list MPs. They cannot front up to the people whom they deceived during the election campaign by not mentioning that they would take away the $1000 kick-start to KiwiSaver. Not once on the Ilam election campaign trail did Gerry Brownlee say: “We are going to take away your $1000 kick-start to your KiwiSaver account.” But he did say that next year’s Budget would be a surplus Budget just like he did in 2011.This has been a Budget of broken promises and of mean-spirited legislation including this one. It has been a scramble for Bill English to try to get to a Budget surplus and once again he has failed. If people had signed up to KiwiSaver at 1 o’clock on Thursday they would be getting the $1000 kick-start but if they had signed up at 2.30 on Thursday they will miss out.David Seymour took the cake last night. He said that that is what Budgets are about—you take from some people and give to others. It is depends whom you take from and why. Taking money from low-income middle-income and hard-working New Zealanders—the key trigger for them to have an incentive to be better savers than they were in the past has been taken away by the National Government. Where is that money going? It is really hard to say. There is no commitment to investment no commitment to our regions no commitment to employment and no commitment to a vision or a plan for the future. This is just a scramble of ideas in the Budget. It is mean-spirited legislation and unfair.This is a continuation of the watering-down and cuts that National has brought into the KiwiSaver scheme. This is the eighth cut to KiwiSaver since National was elected in 2008. There has been a series of cuts to KiwiSaver which was one of the biggest changes that we had to the savings culture in New Zealand. There is no money going into the New Zealand Superannuation Fund. KiwiSaver is the biggest saving incentive that we have had in New Zealand since the Bill Rowling scheme which National cut as well actually in previous years. KiwiSaver and superannuation are our commitment to the future and all National wants to do is cut them.ALASTAIR SCOTT (National—Wairarapa):We have had about an hour of contributions from the other side. That hour has confirmed in my mind that those guys have absolutely no idea what they are talking about when it comes to fiscal responsibility. You will have already heard Ruth Dyson talking about surpluses. She talked about—[Interruption]The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! Can we just lower the volume from my left a little bit please. I just cannot hear him at all.ALASTAIR SCOTT: Thank you Mr Assistant Speaker. Ruth Dyson was talking about surpluses and forecast smaller surpluses but she did not talk about what the $790 million of reduced or small surpluses is funding. There is a choice Ms Dyson. You cannot have everything. You can take away the $790 million package and that will give you increased surpluses but that is not what we choose to do. We care for those who can least afford it—beneficiaries with children. When you care about things like that you have to make choices.Hon Ruth Dyson: You have just taken 40 weeks of benefit increases off them.ALASTAIR SCOTT: That is only one-third. Last night we heard from a professor of economics who talked about nonsense. I commend this bill to the House. [Interruption]The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! And on this occasion I think I am having trouble hearing the member because one of his colleagues is yelling over him. I think he might have been breaching outside the bill but I just could not hear. Is the member finished?A party votewas called for on the questionThat the KiwiSaver Budget Measures Bill be now read a first time.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Bill read a first time.Second ReadingHon TODD McCLAY (Minister of Revenue):On behalf of the Minister of FinanceI move that the KiwiSaver Budget Measures Bill be now read a second time. New Zealand is emerging strongly from the economic turmoil following the global financial crisis and the effects of the Canterbury earthquakes. If we are to withstand future microeconomic shocks we need to ensure that Government spending is prudent and well targeted to where it is most needed. Removing the kick-start will achieve significant fiscal savings and enable the Government to meet competing policy and fiscal strategy objectives. The removal will also have the effect of lowering the cost of KiwiSaver and therefore improving the value for money of the KiwiSaver scheme.The ASSISTANT SPEAKER (Hon Trevor Mallard): Can I just ask the Minister to resume his seat. I noted at the beginning of his speech he said he was moving the second reading on behalf of the Minister of Finance. The bill is in fact in the Minister’s name so I think what he might want to do is just correct that.Hon TODD McCLAY: Thank you Mr Assistant Speaker. I move That the KiwiSaver Budget Measures Bill be now read a second time. Removing the kick-start contribution will achieve significant fiscal savings and enable the Government to meet competing policy and fiscal strategy objectives. Removal will also have the effect of lowering the cost of KiwiSaver and will therefore improve the value for money of the KiwiSaver scheme. KiwiSaver remains an attractive scheme and the Government is committed to it.I would like to point out that KiwiSaver members will continue to receive employer contributions and Government-provided member tax credits. It will remain an important vehicle for saving towards homeownership. Since 2011 there have been more than 9500 withdrawals from the scheme totalling more than $0.5 billion as people use their KiwiSaver contributions to buy their first home.I note that more New Zealanders have joined KiwiSaver under this National Government than under the last Labour Government. New Zealanders did not have faith in the scheme under Labour but they do have faith under National and they will continue to have that faith. The change proposed in this bill will help ensure KiwiSaver is sustainable and represents good value for money. I therefore commend this bill to the House.ANDREW LITTLE (Leader of the Opposition):This bill is the most symbolic of all the Budget legislation going through the House. Apart from one other it is the most symbolic of the measures in the Budget. After 7 years in office the National Party has discovered poverty in New Zealand. After 7 years it has discovered that there are people who have been struggling and doing it really hard. The Government has helped and has given them $25 a week but it has taken everything else away from those hard-working hard struggling Kiwis—and this is just one of them. This is the most symbolic.When it was first started under the last progressive Labour Government—the last Labour Government—the purpose of KiwiSaver was to help savings because everybody identified that New Zealand had a major savings problem. People were struggling to put money aside and they needed a scheme in which they could save so that they could live in just a little extra comfort in their retirement. But ever since this Government has been in power it has hated KiwiSaver. Actually it hated KiwiSaver at birth and it has hated KiwiSaver ever since. Every opportunity National gets to hack away at it to cut it to undermine it to destroy it it takes that opportunity. The Government did this when it cut the member tax credits and undermined that contribution. That helped hard-working Kiwis! And now it is having another go—now it is having another go. It is taking away the kick-start. It is taking away the kick-start because this is a National Party and a National Government that hates KiwiSaver. It cannot leave it alone. It cannot keep its hands off it—a bit like the Prime Minister and ponytails. It cannot keep its hands off it.So now the Government has taken the kick-start—the very thing that helps many people. For many workers I know the one thing that got them into the scheme when the scheme first came in was that kick-start—the thousand bucks. They thought: “I know I’m going to have a little bit of a struggle to get into this in the next few years until my pay increases but because I’m part of a good union and I know I’m going to get good pay increases I’ll make the contributions and I know I’ll get the $1000 kick-start and that’ll get me into the scheme.” That is why 2.5 million Kiwis are in the scheme—that is why 2.5 million Kiwis have made that decision. They knew that they could get that help and they were getting the member tax credits as well until this mob cut them and made that harder. They all got the kick-start—the $1000 payment. Those who were thinking about their kids and their kids’ future thought: “Yep we’ll make sure they get in and get a good savings habit started early.” So the mums and dads signed their kids up too and they got the kick-start as well. Well all that is going.It may have been lost on the National Party and its great planners—oh whoops it does not have any because it does not have a plan. It has never had a plan for the good of New Zealand. But let us do what economists do; let us make an assumption that the National Party has somebody who does planning. When National planned this it may have forgotten that actually kids are going to carry on being born in New Zealand. New Zealand parents will continue to have children. I think that we can safely make that assumption. So as more children are born as more children come into New Zealand and as they enter the workforce they might want to start their KiwiSaver account. They might need a bit of help and a $1000 kick-start would be that help. Well it would have been that help but National has destroyed it because again it hates KiwiSaver. It is bad enough that the Government is running down New Zealand superannuation. Oh yes 7 years in office and not a single effort has been made to make sure that the future of New Zealand and New Zealand retirees is safe and secure. Government members just live in splendid ignorance of the biggest issue facing the country. They just bury their heads in the sand. They do not want to touch it. It is bad enough for a country that is desperately trying to grow its own capital base and that is desperately trying to create the foundation for future wealth through things like KiwiSaver that this party in Government just continues to run it down.Government members sit there shamefaced—the only respectable look they have shown in the whole Budget debate. They sit there shamefaced because they know the damage that they are bringing on this country. They know the damage they are doing. It is just like the rest of the Budget actually because they do not have a plan they do not have a vision they do not know what they are doing. It is Budget by Budget and broken promise after broken promise. They are doing this because they have discovered poverty and they are desperate to do something to give the appearance that they are doing something. So they will crib it out of KiwiSaver take it off the future generations and try to kind of look after those who have been struggling for so long and give them a slight bit of reprieve now. But it is not a way to run a country it is not a way to build a foundation and it is not a way to improve the long-term interests of all New Zealanders and all New Zealand. They do not have an answer. They do not have a clue. They do not have a plan. They do not know what they are doing. They are out of touch out of ideas and rapidly out of time. They do not know what they are doing.Demolishing KiwiSaver taking away the kick-start is just another measure to further erode the strength that New Zealand desperately needs in its economic base. They have got nothing at all—they have got nothing at all to add to the long-term future economic base of New Zealand. Here was something—encourage people to get into savings encourage people to get into KiwiSaver give those kids a chance give them a start. And those workers who are on low and medium incomes give them help to get into KiwiSaver to build up their long-term savings and hopefully to give them a bit of dignity in retirement. But no Government members cannot look much further than the next balance date. And then they have to make up a fictional surplus as well to get them that far—to convince themselves that they know what they are doing to convince themselves that they have got a Budget that is going to make a difference. Well the only difference it is making is to make it much harder for hard-working Kiwis who just want a bit of help to get their savings under way. They just want a bit of help to get their KiwiSaver going and now it is being ripped from under them because this Government is desperate is out of ideas does not know what to do cannot manage the economy and is leaving all the problems built up for the next Government to have to fix and address.The problems are all mounting and this will be just one of them—the ongoing shallow capital base of New Zealand encouraged and fomented by this Government because it does not know what it is doing. It is thrashing around looking for an answer. It is thrashing around trying to convince itself that what it has done is going to be good for struggling hard-working New Zealanders and it is not. But the Government has got to do this. Government members have got to convince themselves that if they give the appearance of doing something and if they pat themselves on the back for discovering poverty then maybe they will be able to get through the next year as they rush around trying to find a solution to the other bigger problems.Government members talk about leakage. This is about their answer to leakage because apparently they are saying that the kick-start is not targeted at the right people. Well KiwiSaver is actually targeted at everybody. That is the whole thing about KiwiSaver. It is about giving every New Zealander a chance to have their savings. It is about giving every New Zealander a chance to get their savings habits under way from a young age—from a working age. But here National goes again. It never said this at the election. It never went into the election and said “That’s it.” The world knew they hated KiwiSaver. We thought the hatred had come to an end. We thought that they might do something constructive. We thought that they might do something to build New Zealand’s economic base. We thought that they might do something for the good of New Zealand’s economic future. But still they will not.David Bennett: Too little too late.ANDREW LITTLE: David Bennett thinks that the Waikato Expressway is doing something for New Zealand’s economic future. Well that is not enough—that is not enough. That is about ferrying people out of Auckland because they are desperate to get out of there and to get somewhere they can drive their car. It is not about building the economic base of New Zealand. National has got nothing to say about helping New Zealanders with their savings habits. Now we see that the most symbolic gesture of this Budget—the most symbolic gesture of this Budget—is yet more “short-termism” and ripping away the opportunity that hard-working Kiwis would have had to start their savings habit. Here National members are doing it on Saturday morning of Budget weekend. Here they go ripping away an opportunity for hard-working Kiwis who just want a chance to save and who just want a chance to contribute to the nation’s savings and to the good of the nation. Well here they go again. Here is the National Party again.The National Party as we know does not like KiwiSaver hates workers does not want to give them a hand and does not want to give them any support. It is pulling away the one chance they have got—the one bit of help they get—to get their savings habit under way. Here National is in Budget 2015 pulling it out from under them—ripping it up. National does not like working Kiwis trying to get ahead. It is the way the National Party operates—it has done so for the last 70 years. It is doing it again in office. It is about to come to an end. It will be the next Labour-led Government that restores KiwiSaver and that gives working New Zealanders a chance to get ahead for the good of all New Zealand.Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery):That is the sort of speech you give when you come to the party 43 years late. That is the sort of speech you give when you have got no ideas to offer the country at all. What we heard from Mr Little was that apparently there is no plan. Well I tell you what there are a lot of people in this country who think that the Government of the day is doing an extremely good job and they are very very happy about the Budget that has been brought down in the last few days.What we heard from Mr Little in a policy sense in that short speech was his reconfirmation that under Labour the retirement age will go up not to 67 not to 68 not to 69 but most likely to 70. That at least is something that Labour is standing for. Secondly we have heard that when people do get to what is a nominal retirement age if they are still working then there will be a means test applied to them. When you look at the Labour record for spending in Government everyone knows that it will not stop at just the earnings over and above wages; it will be everything for anyone over the age of 65 under a Labour Government.I find it really staggering too that Mr Little expects to be taken seriously when he talks about fiscal matters by offering the really insightful piece of information that if a Government makes a grant to someone so that that person might start some savings it is somehow the basis for having an expanding fiscal foundation for the nation. Well I do not mind saying that I have never really understood how someone can say that they are wealthier by virtue of their borrowing. That is fundamentally wrong and that is the sort of rubbish that Mr Little is going around saying on the stump at the moment trying to convince New Zealanders of the insightful idea that the Labour Party can somehow conjure up out of nowhere the money to make life better for everyone.The other point that was really interesting was the attack that Mr Little managed in this KiwiSaver bill to mount on this Government’s record when it comes to New Zealand superannuation. This Government has raised the superannuation income for superannuitants repeatedly over the last 7 years—repeatedly—and not just in the context of the Consumers Price Index but in other things as well. Although the numbers are not in front of me I can tell you that those increases are well in excess of $100 a fortnight in the last 3 years. That is real work by a Government. That is not some sort of penny-pinching.It is also extraordinary that in a Budget where there has been a big move to raise the benefit incomes for those New Zealanders who require that assistance that Labour members of all people—Hon Ruth Dyson: You’ve just cut 40 weeks of it in this.Hon GERRY BROWNLEE: —Ruth Dyson and the exiting crew from the back row—are all out there waving a bit of paper and asking: “Where’s the surplus? Where’s the surplus?”. So what we know is that a Labour Government will always put a surplus ahead of the needs of New Zealanders—it will always do that. That is its record. That is its record. That is why for so many of those 43 years since 1972—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I know that this bill has not been to a select committee and therefore the debate can be broader than normal but I am just going to ask the Minister to—Hon Annette King: Mention it.The ASSISTANT SPEAKER (Hon Trevor Mallard): —well that is what I was going to say—try mentioning it rather than having the entire speech as a prelude to his contribution to the Budget debate.Phil Twyford: He’s a senior member. He should know better.Hon GERRY BROWNLEE: That is right I should know better but I will also resist any temptation to note that at a very very salient point in my contribution to this debate there could well have been a partisan intervention but I am not going to say that.Just think carefully about what KiwiSaver does. KiwiSaver says to anyone coming into the workforce: “Sign up to this particular proposal put a sum of your money into the scheme and there will be an employer contribution plus a $521-a-year contribution from the Government as well.” None of that changes. That all remains in place. The really interesting thing is that young people going into the workforce and signing up to save in this way will now have access to those KiwiSaver funds for the purchase of a first home. These are not small grants—$5000 per individual if it is a second-hand home $10000 if it is a brand-new home or $20000 for a couple who have saved through this system—so it is utterly ridiculous for anyone to suggest that the incentives for young people to sign up to KiwiSaver are in any way at all damaged by this particular prospect.I heard the most interesting thing on TV the other night. It was a vox pop in the street where clearly someone from the Labour Party had managed to get themselves in front of a camera—[Interruption]—yes true; well it is a rare thing for someone from the Labour Party to get in front of a camera—and they were saying: “This is a terrible thing. I had hoped that I would be able to use my KiwiSaver and that $1000 to go towards my first home.” Well get real—get real. Saving over a 5-year period is going to see more than $2500 of Government grant going into that account plus up to $10000 at the time that the house is bought. People understand that. People understand that well.I can tell our opponents on the other side that there is a whole industry of people out there encouraging young people to join KiwiSaver under those conditions. That is why the number is at 2.5 million and why it will not fall is that young people actually do have aspiration. Young people do want to make the most of their lives. Young people will see that their getting up to $15000 worth of Government grant when they come to buy their home makes it well worth their while being in KiwiSaver regardless of this $1000.Dr DAVID CLARK (Labour—Dunedin North):This is a Budget of broken promises. It is short on vision and it fails to deliver a surplus. People around the country watching that speech from the Hon Gerry Brownlee will be saying to themselves: “I wonder—did those Ministers on the National benches take that $1000 themselves before they cut it off for hard-working families around the country?”. They will be asking whether the member for Ilam banked that $1000 before he cut it off from his hard-working constituents. They will be asking whether he encouraged his family members to take that $1000 before the Government cut it off from hard-working constituents. They will be talking to the member from Hamilton West and asking whether he took the $1000 before he cut it off from his hard-working constituents.David Bennett: He wouldn’t take a thousand bucks.The member from Hamilton East: did he take it from his family members for himself before he cut it off for the rest of hard-working New Zealand? They will be going into the office in Rodney and saying to the member there: did he take the $1000 before he cut it off from his hard-working constituents? There are some guilty faces opposite and I am not surprised. They will be going into the Rotorua office and saying to the Minister: did he take the $1000 before he cut it off from hard-working families? And I would be interested to hear what answers they get. I wonder whether the journalists will ask members opposite whether they took the $1000 KiwiSaver kick-start before they cut it off from hard-working New Zealand families. Over there they are quite happy to cut out the lunch for everyone else when they have got a big lunch for themselves and that is indicative of this Government’s attitude to the future of New Zealand.The Government has hit the panic button. It has hit the panic button and we can see it right there in the regulatory impact statement on the front page. On the front page: “The advice was requested in advance of Budget 2016 and therefore has been prepared urgently.” How long has the Budget been coming? Why did it need to be prepared urgently? The analysts have “not focussed on the effect of policy options on national saving”. They say it there in paragraph four. In paragraph two it is urgent; in paragraph four they have not focused on savings. And then paragraph five if we skip forward: “There has been only limited consultation”. And now we are passing it through urgency. Members opposite know what answer they would get. They know the hard-working New Zealanders who come into their offices would be furious that they took the $1000 and then said it is gone. It is gone. But it is what we get from this Government. It is out of touch. It has lost touch with middle New Zealand. It is looking after the interests of a very wealthy few and it is robbing Peter to pay Paul.Although there are a few good things in the Budget—and we on this side have acknowledged some good changes in the Budget—we see that there is sleight of hand and they are taking with the other hand and middle New Zealanders are the ones who are squeezed yet again. The Government is robbing Peter to pay Paul. Those improvements should not come at the cost of those who are just one or two rungs further up the ladder but that is what we see from this Government—a Government short on vision. There is no doubt that this change will reduce savings for New Zealanders and at the very time we need to be increasing them. This is a short-term plan and not a long-term vision. But it is what we have come to expect from this Government: a Government that is neglecting the regions that has failed to diversify the economy that has failed to address the housing bubble in any meaningful way and that has failed to diversify the skills of New Zealanders to prepare for tomorrow.We know—I remember from my time in Treasury—that one of New Zealand’s challenges is capital debt. It is actually having enough money for businesses to access for them to grow. That is a very serious problem. Treasury had an analyst on it in the 1970s. Treasury has still got an analyst on it and members opposite are doing nothing about it but cut cut cut when it comes to savings. They do not care about business in New Zealand—not small businesses and not medium sized businesses anyway. Across there all we see them doing is cutting. They have cut the contributions to the Cullen fund. They have cut the contributions to KiwiSaver on several occasions. This is one of a number of cuts. Last night my colleague David Parker outlined seven or eight cuts I think it was that they have made to KiwiSaver. This is a Government that does not care.In Australia they have got a superannuation fund that has got $1.3 trillion in it. That would have happened across here if Muldoon had not cut it. This is the same attitude as the Muldoon Government—this Government though has borrowed more than Muldoon. It is up to $88 billion in debt. It is drowning us in debt because $10 million a day is spent just paying off debt. Taxpayers are paying $10 million a day just to pay off the Government’s debt. That is the attitude it has. That is short-term thinking from a Government that is out of ideas.Half a million Kiwis are going to miss out on this $1000 over the next 4 years. Those are the Kiwis who should be going into the offices of those members opposite and saying: “Did they take the $1000 before they cut it?”. Did they take the $1000 before it was cut? I will be interested to see. I would like them to put up their hands to show that they took the $1000. I would be interested to see whether members opposite have the courage to put up their hands to show that they took the $1000. Let us see: how many of them took the $1000? How many took the $1000 across there? None of them! They are all saying that none of them took the $1000. I bet that is wrong. I bet we will learn in coming days that that is wrong. Those members opposite should own up. They took the $1000 and then they took the ladder away. That is just typical of this Government.We know this plan works. That is the crazy thing—2.5 million Kiwis have signed up for KiwiSaver; 2.5 million Kiwis have signed up for Labour’s KiwiSaver programme. And the Inland Revenue Department says in its recently released fairly thick and comprehensive evaluation report that this is an excellent scheme basically: 36 percent extra savings on top of the savings that would ordinarily have happened in our economy. It is because of course there are member contributions that encourage people to get involved. There is an opt-out clause so people are in the scheme and there are no overheads no hassle to get involved. People find themselves saving before they know it. Of course they are encouraged because there is a thousand bucks in there to start with.As my colleague David Parker outlined last night that makes a difference for somebody on $15 an hour with a part-time job when they are saving a couple of bucks a week: $1002 is much easier to be proud of than $2 in your account. It makes you feel good. Behavioural economics have happened. We are not still in the 1980s. Those people over there need to read a few new economics textbooks get the Hayek out from under their pillows get a few new books under their belts and get the spray-misters out to dry them off. Those people opposite need to have an up-to-date understanding of just how economics works. Thank goodness the Inland Revenue Department has a few insights because it is telling the Government that this policy works. This policy works.The beautiful thing of course is that people are signed up to the scheme already. A lot of people have got this and they will be thankful. But it is the half a million Kiwis who are going to miss out over the next 4 years we should be thinking about. Those half a million Kiwis—I hope just a few of them go and ask these National MPs and Ministers opposite whether they took the thousand bucks before they got rid of the scheme. They already cut the member tax credit in 2011 cutting savings. Cutting savings is not the way to manage the economy. It is what Muldoon did and this is the Government that has created more debt than Muldoon. It is the same plan and it did not work then and it will not work now and Kiwis can see that.We do not even know whether it can be implemented. The Inland Revenue Department says it is going to cost $210000 to implement this scheme. That is 210 Kiwis who could have had the extra thousand bucks. And will the Government be able to do it? Or will members opposite be coming back again like they have done with so many bills that have adjusted the tax system—to reverse the changes out because they cost so much under the old system in the Inland Revenue Department that they still have not fixed after nearly 7 years of Government? Seven years 7 long years and they still have no new ideas. They have not fixed the tax system. I doubt very much whether they will be able to do it.They are costing New Zealanders’ future. They are stealing from the future generations from the pockets of kids. This is what it has come down to. Members opposite will claim high and mighty. They will say they have made some positive changes and no one on this side of the House begrudges them that. But we do not want to do it by stealing out of the pockets of those who are one or two rungs further up the ladder. It is always the middle class and the lower class those who are struggling those who are really working hard those who go out to work every day on modest wages those who are on median incomes who are feeling the squeeze. It is not those at the very tip-top not those who benefited from the 2010 tax package not the top 1 percent.But we will see. Let us see whether Mr Bennett stands up shortly to say that he took the $10000 and he is proud to see that no one else—[Interruption] Sorry $10000—whatever even better. Let us see whether he took the $1000 and then cut the scheme. I bet Mr Bennett will tell us that he did take the $1000 and that he encouraged everyone he knew. This is retrospective legislation because members opposite know that if they pushed this out a whole bunch of people would sign up no matter what they say. This is a Government that is out of vision out of ideas and out of touch.DAVID BENNETT (National—Hamilton East):The speech that we heard from Andrew Little today was much better than 2 days ago. I think that was actually a better speech than the one he delivered on Budget night. It was too little too late but it did come from a member of that party. And in that speech he talked about how the Labour Party felt that there were shamed faces in this Chamber. The only shamed faces are over there. Those were the shamed people on Thursday because they realised that for over 43 years they have not delivered for the people who need help—43 years that will go down in the history of New Zealand politics. Forty-three years and not one Labour Government did a thing for those people. Every day they come into this Chamber and they preach high and mighty and they say how they are looking after people in need and in vulnerable communities—all that stuff. Do they deliver for them? No they do not deliver. Andrew Little does not want to do that.What does he want to do though? What does Andrew Little want to do? He wants to take superannuation away from hard-working New Zealanders—hard-working New Zealanders who have spent a lifetime working. When they retire they look forward to their superannuation. And Andrew Little wants to take that away. He wants to take superannuation away from New Zealanders. He has had 2 days to reflect on that and he still believes in it. Today in this House this morning he said that he would take that superannuation entitlement away from New Zealanders—from hard-working New Zealanders who have spent years in the workforce. They are going to lose it under Labour. New Zealanders understand and expect that from the Labour Party now.Labour’s grand plan is to give you $1000 in your KiwiSaver. Grant Robertson said that he would do that. He would reinstate that policy. This morning the Labour Party has said that it would reinstate this policy but its reason for reinstating this policy is that in good economics it makes you feel good if you have got $1000 in your account. Good economic policy according to the last speaker Mr Clark who did not come back to Hamilton after his last visit is that if you feel better for having $1000 in your account then that is good economics. Well where does that money come from Mr Clark when you have got Budget deficits? You have to borrow that $1000 to put into somebody’s account to make them feel good. Is that good economics?Maybe if you had actually run a business you would understand that you have to earn the money and then put it in your account rather than put it in there just to make you feel good. But that is the feel-good factor that you get from the Labour Party. Grant Robertson said after the Budget that the Labour Party is going to reinstate the KiwiSaver kick-start. He did not talk to his colleagues. He did not talk to them at all. He just came out and said it. He said it. That means that Labour has committed another $400 million in the next Budget and future Budgets—$500 million. So when we come to 2017 you can put another $500 million on what it promises in the election campaign.Hon Member: Whack it on the bill Phil.DAVID BENNETT: Whack it on—that is right. Whack it on the bill because that is what Labour has done.Mr Little when he was talking mentioned superannuation constantly during his speech. He talked about it constantly because he wants to attack the very people who have made this country strong—the very people who are in this room. I bet you that “Professor” Fletcher Tabuteau over there will not be agreeing with that. I bet you that “Professor” Tabuteau when he talks to his boss will know that New Zealand First is not supporting any changes to superannuation because for all of the faults that there are in New Zealand First—and there are many and you will see them lined up there now—there is one thing it has got and it is that its leader has a sense of the superannuation debate. He knows that it would be the end of the world for the Opposition to go out there and actually promise changes to superannuation. But the Labour Party is high and mighty and will do that. It is a bit like a capital gains tax. A member of the Labour Party promised a capital gains tax. Then they lost the election. Then they said no we are not having a capital gains tax.Dr David Clark: I raise a point of order Mr Speaker. I appreciate that my own contribution was somewhat wide ranging but I did try to tie it to the bill. If the member is trying to say that the cuts that he is making are tied to the bill then that might be in order but it seems it is going a bit far.The ASSISTANT SPEAKER (Hon Trevor Mallard): The question of relevance is one that is purely for the Chair and although I accept that I received some criticism from the Leader of the House when I attempted to narrow the debate earlier as a result of the advice that I have had from him I have let this member run a bit wider than would normally be the case.DAVID BENNETT: I do not know why the Labour Party cannot give dignity to people in retirement and why they want to attack the hard-working New Zealanders who have spent years working in our workforce to pay for those members to be in this room—to pay for them to have those grandiose ideas to pay for them to go around the country as if they are some kinds of lords and ladies of the world who can tell us what to do. And then when it comes to those workers’ retirement they are going to take superannuation away. They are going to take away hard-working New Zealanders’ entitlements in their retirement. But they want to give those workers $1000 now to make them feel happy. That will make them feel happy and they will be all right. When they retire they are going to lose more than $1000; they are going to lose their entitlements. They are going to have to wait until they are 70. Under Labour those people working on the outside of this building doing the hard brickwork on this building will have to work until they are 70—70 is the age Labour is going to make them work until. But those workers will get up each morning and they will do that work because they know that they got $1000 when they were 21 and they will remember that and think: “I am happy. I am a happy person because I got that thousand bucks.” That is what the Labour Party economic theory is all about.It is great to see and it is great to see Andrew Little smiling. It is the first time that I have seen him smile in 2 days. It is hard for him. It must be very difficult being the leader of a party that does not really exist any more and also a party that he does not have support from. The rest of them show more animation when a National Party member speaks than they do when their own leader speaks. It was really sad to watch them on Thursday night. When you look at a Budget you should attack a Budget if you are in Opposition.The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! [Interruption] Order! I think that even my sort of liberal approach is now being tested when the member talks about other debates on which he is yet to speak. So the member will now address the KiwiSaver Budget Measures Bill.DAVID BENNETT: Thank you Mr Assistant Speaker—and a very good Speaker as well. For 43 years we have delivered the Budget—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! [Interruption] Order! The member will resume his seat.JAMES SHAW (Green):Thank you for the opportunity to speak on the KiwiSaver Budget Measures Bill. I am going to take I hope a slightly different approach. I would like to start by acknowledging both Mr Brownlee and Mr Bennett for actually taking full calls on this bill and actually providing some form of argument in this debate because during the previous Budget debates over the last few days Government members have not actually even bothered to speak to their own bills. They have not actually bothered to lay out their case; they have just relied on their numbers. So I do appreciate the fact that Mr Brownlee and Mr Bennett did actually take full calls on this bill even if they relied more on volume than reason to make their arguments.There are a number of key points that I would like to address and I am inviting the Government to respond directly to these points because I have not yet heard any real arguments—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! Sorry there is noise from both sides at the moment and it is a bit hard to hear the member.JAMES SHAW: I was just saying that I am actually inviting the Government to respond specifically to these points.The first one is around New Zealand’s savings rate. We are still 22nd out of 24 OECD countries in our savings rate which even given the success of the KiwiSaver scheme over the last few years is a shockingly low rate of savings. We are a country that relies more on debt than we do on savings. We have weak capital markets partially as a result of this. National’s Savings Working Group itself said that our foreign debt is too high. This makes us vulnerable and our domestic savings are essential to try to redress that. Our investment needs to be funded from offshore because we do not have the domestic savings to provide those sorts of capital markets. Removing the incentive from KiwiSaver and reducing the likelihood that more people will be joining the KiwiSaver scheme reduces our domestic savings rate. So I would like to know absent the incentive what the Government’s plan is to increase New Zealand’s savings rate. That is the first point.The second point is around the loss of the incentive. I would like to thank David Clark for his contribution before about behavioural economics which is a more recent evolution in economic thinking. The question here is: why would you take away the incentive? Absent compulsion why would you take away the primary incentive? It is the one that most people know about. The ANZ chief economist Cameron Bagrie said in this morning’s Dominion Post that he himself—ANZ’s chief economist—would not have put his kids into KiwiSaver if it was not for the $1000 incentive.So the $1000 incentive is the most well-known component of the whole scheme. There are other incentives still contained in the scheme as Mr Brownlee said which include the tax rebate the matching contributions and so on. But actually my belief is that the Government would have been better off to cut or remove the tax rebate than the $1000 contribution. That would probably have had more fiscal impact but it would have retained the $1000 incentive. That is what people think of when they think of the incentive of this scheme. As far as I can work out what you are going to see is a reduction in the percentage of people who are taking up the scheme. So I would like to know what the Government’s response is to the loss of that incentive. How does it actually expect the same percentage or equivalent of people to continue to join the scheme absent the $1000 incentive?The third question is around the timing of the loss of the incentive. If for example you had said that this would take effect in 6 months 12 months or 2 years there would have been a window where people said: “OK there is still an incentive but I have got to get in now or it is going to be lost.” Even if you had given it a week you would have seen a rush of people joining the scheme. One of the previous speakers on the Government side said: “Well look if people have not joined the scheme now what is the likelihood that they ever will? Given that we have had the incentive for all these years what are the chances that they are going to do that?”. If there had been a time limit—and if my reading of behavioural economics is anything to go by—there are a lot of people who are out there thinking: “Oh yeah I will get to it one day but it is a bit complicated. It is a bit hard. I do not have enough money quite now. I will get to it.” If you had left a window and said: “Let us give this 6 or 12 months and then the incentive would go.” yes it would cost you a bit more money but you would get that tail of people who just had not quite got around to it. But instead by cutting it off immediately there is no chance for people to get it who were thinking about it but had not gotten around to it. I would like a response to that please as well.The next one is about intergenerational equity. The current generation of parents with young kids who are working are paying for their kids’ education through the high tertiary fees and costs. They are paying for their own retirement because they know that by the time they get to retirement age there is not going to be enough cash in the kitty to give them proper superannuation and they are paying for their parents’ retirements through taxation in the form of the existing superannuation scheme. So the current generation of families who are working are getting squeezed in terms of paying for three generations at once. In removing this incentive you are actually making it even harder for intergenerational equity to take place. I would like some kind of sense of what your plan is to redress some of the intergenerational issues that arise out of this.The fifth point is around the short term versus the long term. I think Labour have already made this point very well and frequently in the course of this debate which is that every time the Government gets concerned about its short-term books it relies on kicking the can down the road in terms of the long-term fiscal sustainability of the country. They cut the contributions to the superannuation fund in order to try to maintain the books now. Now they are cutting the KiwiSaver incentive basically balancing the books from New Zealand’s superannuation schemes and retirement schemes. I would like some sense of what your long-term plan is. How are you going to fix the long-term future rather than just deal with the short term?Those are my main points. What is the Government’s plan to deal with New Zealand’s savings rate? What is the Government’s plan to deal with the loss of the incentive that then happens and how do they expect the rate of take-up to stay the same or even increase? What is the impact on the rate of take-up of KiwiSaver when the incentive is lost? Why did they not consider a window to get people in who were thinking about it—the third point? The fourth point is around intergenerational equity. The fifth point is around the long term versus the short-term nature of this decision. There are five questions there that I would like answered during the course of this debate more bombastically or less bombastically as takes your pleasure. But I would like to hear those.Middle to low income earners are struggling to save. We know that. Under National those who are saving are the people who really can save—that is upper-middle and upper-income families. What this legislation does is this takes away the incentive and a little bit of savings for people at the bottom end of the pile people who could not get a thousand dollars together. What is your plan for the impact on inequality that the loss of this $1000 is going to have?We have got a number of Supplementary Order Papers that will come up during the next part of the debate which are in relation to restoring or retaining the $1000 kick-start for people who have got community services cards which would deal with some of those issues. We have got the Kids’ KiwiSaver programme that we launched a couple of weeks ago with a progressive savings component to it—all of which is designed to deal with some of the issues that I have raised during the course of this debate. I just wanted to flag that we will be speaking to those soon. We have got some ideas about how to deal with some of those issues. I would like to hear what the Government’s plan is for dealing with those kinds of issues. Thank you.FLETCHER TABUTEAU (NZ First):If I could continue along the same vein as the previous speaker James Shaw and bring some facts and some intelligent discussion rather than abuse into this morning’s proceedings. Let us take an example used yesterday. Take a 15-year-old who is about to open a KiwiSaver account today. If they had done it before this $1000 incentive was removed that $1000 would actually be—and these are not generous calculations they are quite modest—at the time of that person’s retirement given a 10 percent return which is actually reasonable considering the annual rates of return of KiwiSaver funds at the current moment over 50 years the calculation is about $117000 to $145000 at retirement.Clayton Mitchell: How much?FLETCHER TABUTEAU: It is $117000 to $145000 at retirement.I said yesterday that we might be balancing the books at the moment. It might look like you are balancing the books now but what you are doing is robbing those sums of money from future generations. That range like I said is modest and the multiplier effect on your annual returns the compounding interest effect is such a powerful thing. It has been spoken about in this House many times.Consider the reality out in the typical Kiwi household. The median income for a Kiwi is still less than $30000 per annum. That $1000 was not only a drawcard it was a real and meaningful sum of money. At the end of its investment life it was—it really was—going to make a huge difference in the enjoyment of life for those retiring. The Government has taken away $145000 in real terms from our future generations for those who would like to retire with some dignity from every person who missed out under this retrospective piece of legislation. This Government’s vision stretches only to the end of today. Mr English is literally robbing our children’s piggy banks.This surprise bill opens up questions about uptake the impact on our national and individual savings and as mentioned already the fairness or lack thereof across generations. The advice given to the Government on this bill was “The analysis has not focussed on the effect of policy options on national saving”. I will just repeat that: “The analysis has not focussed on the effect of policy options on national saving”. Here we are talking about $1000 contributing to national savings but the advice given to the Government the analysis of the policy itself does not take into account national savings. It beggars belief. In the first part the officials have admitted that the bill ignores the problems of savings and then they say “the analysis is concerned with addressing the poor”—supposedly I would put—“value for money and target effectiveness (leakage) of KiwiSaver subsidies.” Apparently we are told that the value for money and target effectiveness of KiwiSaver subsidies just is not there any more. The $1000 is not much of an incentive any more. I will come back to that.Earlier I highlighted that although $1000 may seem like a small sum we are talking about people on the median income in New Zealand of less than $30000. It is actually around $28000. I know the National caucus will not understand what that means but $28000 and trying to save $1000 from that—try to do that in a year. No I do not think you could. I have been there; you cannot do it. Try to do that over 10 years and actually you will not get a chance to grow your savings pool on the New Zealand median income and the Government has now taken away that little incentive that difference we spoke about last night and today—motivation for savings. Now the Government is taking it away. What the Government has not discussed is the future value of $1000 at retirement age. I will say it again: $145000.Consider those living in the regions of New Zealand—the productive heart of this country—who are currently not able to share in the wealth they create. Just think how hugely they will be affected by the removal of this incentive. Look at the unemployment rate in provincial New Zealand remembering actually that an hour of work per week is measured or ticked in the employment column. An hour of work a week is considered as being employed. It is 9.9 percent in Northland 7.8 percent in my home region of the Bay of Plenty and it goes on. On top of this the Government must acknowledge that regional incomes are well below the national average. What is the Government doing to our regions? It really is such a small amount of money now compared with the value that it presents in the future.I said yesterday that the supposed savings on the Government’s books today for every individual Kiwi still not signed up will be approximately $120 million a year for the first 4 years. As the fund reaches critical mass in terms of people subscribed contributions will decline. So these miniscule savings are short term and short-lived. They are not actually saving this country anything at all.The Minister has removed the incentive to save. Actually do not think about the regions now; think about this in the context of Auckland. People are not going to save. That $1000 was a real and meaningful incentive. People in Auckland are living day by day. The costs of living in our biggest city are just gigantic and the Government has taken away the opportunity or incentive of Aucklanders to get into a savings scheme where they might have been able to subsidise their superannuation. It has taken it away.We have been speaking to Grey Power members and they noted: “The axing of the $1000 start-up boost for KiwiSaver contributors means that many New Zealanders will be much poorer when they retire as it removes a vital incentive for workers to join up and means more people will be dependent solely on their superannuation on retirement.” They go on further to say: “Many New Zealanders currently aged 45 to 65 do not own homes and those who do are actually still paying mortgages. They are on low incomes and are not enrolled in KiwiSaver. They are already facing increasing rental costs in a tight housing market made worse by the removal of many State houses across the country.”Even though many Grey Power members have missed out totally on the KiwiSaver programme they know that this Government is robbing from their children and their grandchildren. This bill does nothing for the children of this country in a time of Generation Rent skyrocketing house prices high student fees and the loans that go with that. This bill is not fair or reasoned. I can expect soon that everyone will be automatically enrolled with the rest of New Zealand made to compulsorily join the scheme. I suppose this bill makes compulsion cheaper. The cynicism is hard to take to be fair. Thank you.CHRIS BISHOP (National):I quite like Fletcher Tabuteau but I have to say that if I were a pupil in “Professor” Tabuteau’s economics class I would be quitting and asking for a refund because that speech was woeful. But I do like Mr Tabuteau.What a contrast it has been between last night and this morning. Last night at 5 to midnight the Government benches here were full. We had 30 or 40 Government MPs here backing our Ministers backing this Budget and backing these important bills that we are passing this morning and last night. There were only three or four Labour MPs last night at 5 to midnight. Something has twigged in the Labour Party overnight and that is that Andrew Little’s leadership is in mortal danger. What do we see this morning? They have flooded the Opposition benches—[Interruption]The ASSISTANT SPEAKER (Lindsay Tisch): Order! I would actually like to hear what the member is saying.Hon Annette King: Yes but he should be talking about the bill.The ASSISTANT SPEAKER (Lindsay Tisch): If I could hear what the member was saying I would know whether he was talking on the bill.CHRIS BISHOP: Thank you very much Mr Assistant Speaker. I was making the point that when we were debating the KiwiSaver Budget Measures Bill last night the contrast with this morning is very very stark. The Labour Party twigged overnight that Mr Little’s speech in the Budget reply debate on Thursday was so woeful that his leadership is now in danger. The Labour members have had to come down here this morning for this KiwiSaver bill and flood the Opposition benches to hear another appalling speech from Andrew Little about matters that are important to the country.It was an interesting contrast with the Budget and this bill was it not? We had the members on the Government benches outlining a clear programme of action including for this bill and the members on the Opposition benches had nothing to say—absolutely nothing—about the benefit increases the National Government is passing. The party of the dispossessed the party of the disenfranchised the party of the working poor the party of the workers and the party of beneficiaries—what did it have to say about the National Government’s increase in benefit levels? Not a sausage. It is disgraceful. Then the Labour members come down here for this bill and they cry crocodile tears about the prudent and sensible—prudent and sensible—cuts that the Government is making to KiwiSaver.Let us get some facts on the table. No. 1: there are 2.5 million people in KiwiSaver already. OK? That is fact No. 1: 2.5 million people in KiwiSaver. It has proven to be very very popular. When Michael Cullen set up KiwiSaver back in 2006 by this stage the prediction was that there would be 700000 people in KiwiSaver. That target has been smashed absolutely exceeded. It has been a huge success. It has been extraordinarily successful—far in excess of what the architects of the scheme would ever have predicted.But that leads to the second fact and this is the second fact that is important to remember. No. 2: the $1000 kick-start contribution has been very expensive. The Government has spent $2.5 billion over the last 7 years on the kick-start contribution. At the time of the global financial crisis and the Canterbury rebuild and at the time at which as the members opposite rightly and adroitly point out so often we are trying to get the books back into the black $2.5 billion is a decent chunk of change. The ongoing fiscal costs of that are also very expensive. It is very expensive and KiwiSaver has been proven to be popular.What that means now—and this is a very important point about this bill—is that this is now a “nice to have”. It is not necessary. There are 2.5 million New Zealanders in KiwiSaver already. Let us not forget the existing incentives that remain to continue in KiwiSaver—the member tax credit of $521 a year the employment contributions that employers are required to pay. So there are plenty of good reasons to join KiwiSaver and we on this side of the House are sure that we will continue to have it.Members opposite cry crocodile tears and there are huge amounts of hyperbole about how we are taking the ladder away. Well sorry but removing the $1000 kick-start contribution for joining an already generous scheme that will provide for people’s lives in the long term is not taking the ladder away from somebody. Taking the ladder away might be opposing important changes to benefit levels like the first ones that have been made in 43 years. The party of the dispossessed and the poor has nothing to say about the fact it is the National Government that is actually making life better for those least well off in our society.Then we get to what Labour has promised and the schmozzle it has had in the last couple of days about its stance on superannuation and its stance on KiwiSaver. Grant Robertson in one line spent $500 million of the next Labour Government Budget which hopefully will never happen. In the unlikely event that it does he spent $500 million in one line when he was asked on the Stuff chat website whether he would commit to bringing back the $1000 kick-start contribution and he said yes. OK that is fine. You can make that choice. It is the role of the Opposition to outline alternative fiscal spending plans. But that one line those three letters typed away—or that a staffer had typed on the Stuff chat website—cost the Government $500 million over 4 years and it is just in line with the Labour Party’s big spending agenda. You can add it to the very long spreadsheet that exists of Labour Party spending promises that Mr Cunliffe promised at the last election that Mr Shearer promised at the election before that and that Phil Goff promised at the election before that: the promise to start the Cullen fund superannuation contributions again the promise to bring back Moroccan cooking course subsidies.Remember that? Remember when the Labour Party was outraged about the fact that we were making middle-class people who wanted to do macramé classes and Moroccan cooking classes at their local high school actually pay for them themselves as opposed to getting money from the taxpayer for them to go and learn how to rub spices on chickens. How ridiculous! So we are going to add this very expensive promise to bring back the KiwiSaver kick-start contribution to the very long list of promises that the Labour Party has made. Labour members have absolutely no fiscal credibility whatsoever. They took us into recession before the global financial crisis they left us with a decade of deficits and now they have the temerity to come down to this House and complain about debt and about how we are not back into surplus. Well their record speaks for itself. It is appalling and they should be apologising to New Zealanders for it.This is an important part of the Government’s post-Budget measures to continue this economy on its growth track and to continue to provide support to the most vulnerable New Zealanders. It is telling that on a Saturday morning the Government is removing essentially a form of middle-class welfare a “nice-to-have” but something that is not necessary any more. We are removing that and instead we are supporting beneficiaries and the working poor. We find ourselves in this weird parallel universe where the Labour Party is supporting $1000 for people who frankly do not need it and opposing more money for the working poor whom they have liked to cry crocodile tears about for the last 9 years—disgraceful!The ASSISTANT SPEAKER (Lindsay Tisch): Order! The next call is a split call. [Interruption] Order! The next call is a split call. Jan Logie—5 minutes.JAN LOGIE (Green):I rise to take a call on the second reading of the KiwiSaver Budget Measures Bill. Traditionally in Parliament second readings are the time when we reflect on the select committee process when we feed back what submitters have raised with the committee. After consideration and debate within the committee we reflect on those discussions in the House and the amendments to the bill that have happened as a result of that. Of course because again this is happening under urgency this speech is not able to be as fully developed as it would have been otherwise and the public have not had that opportunity to have input.So what I would like to focus on in this speech are the few comments I have been able to gather from people in New Zealand through Facebook on their views on this initiative.Hon Annette King: Real submissions.JAN LOGIE: Yes some actual submissions. That is what I am going to do in this speech. The first one is actually not necessarily disagreeing with the Government’s view and what it is doing here. This is an academic whom I know who is saying: “I am in mixed minds. I think it’s very disappointing they have further downgraded the incentive for people to save for their old age. But at the same time I’d be interested in seeing the demographics of those enrolled in KiwiSaver to know whether the kick-start was effectively operating as a wealth transfer from the poor to the rich in which case removing the kick-start would bother me less than if it was operating the other way. Now I’d like to see that evidence from the Government so that actually this country and this Parliament can make a considered decision around that.”Some of the other comments from now on are a bit clearer on their view about this initiative. Brenda Pilott ex-head of the Public Service Association is saying: “It’s an inexplicable move. We’re told that it’s vital people create savings for their retirement and KiwiSaver has been a great success partly due to this incentive. It makes no sense to cut it.” Another person Jacob is saying: “I feel like it’s making things harder for us future generations to save up for housing and retirement. This was a positive boost from the Government which I saw as a good incentive to join but now I’m like ‘Why join?’ I might as well just put my money into a savings account and then I can use it when I want however I want and it won’t be there for retirement.”Another person is saying: “Before KiwiSaver was introduced I’d never saved a cent in my life. I decided to join because of the kick-starter and have now got a tidy wee sum accumulating every month and I feel proud of that.” So the incentive the kick-start was an incentive for somebody to save for the first time in their life and that is backed up by policy advice from the Inland Revenue Department.Another person was saying: “They should have given 3 months for those of us who were halfway through the paperwork for our kids to have a chance to get this incentive.” So the fact that this has been brought in without any notice means that some people were halfway through the paperwork to get this incentive for their children and they have missed out. So again as raised by my colleague I would like to hear the justification for that.We have heard from Government members that “Two and a half million people have signed up. Really—how many more people are going to do it?”. Well some people were halfway through doing it. Somebody else is saying on that point: “Glad I took advice from the bank when I opened up an account for my daughter. But I hadn’t got on to it for my baby. Gutted she missed out.” One other person says: “Yeah working for the people huh? Note the kids these days just got set back yet another grand to buy that house they’ll never have because some old dudes in Parliament wanted a teeny surplus. Pathetic.” Another person is saying: “So this cut’s going to fund our $200 million fight against ISIS. What are you not telling us John?”.These are some of the views of New Zealanders and again we have been told by this Government that there is no choice but to do this if it is going to be fiscally responsible. It is interesting what it focuses on and what it is not focusing on in that discussion.The ASSISTANT SPEAKER (Lindsay Tisch): The Hon Damien O’Connor—5 minutes.Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman):There is an old saying “Follow the money.” and so too with this piece of legislation. This country was built on capital from England coming into this country and we have been told for many many years that we have been very poor savers. So that terrible Tory Robert Muldoon destroyed what was a Labour Party initiative through the good work of Kirk and Rowling to build up a superannuation scheme and savings that would have given our country proper savings and proper investment funds. The terrible Tory Muldoon destroyed that and so too does this Tory Government intend to destroy the savings scheme we have. Michael Cullen brought in KiwiSaver Kiwibank and the Superannuation Fund to offer us security in superannuation and to encourage savings that would have given this country real investment capital—and indeed that has occurred. But what we have got now is a Tory Government intent on destroying that savings ethic. It is not the $1000 that has given real effect here to the cuts; it is the disincentive to the hundreds of thousands of Kiwis out there who have wanted to get into KiwiSaver. This will destroy that incentive. Why? Well follow the money.If we have as we do now a building capital fund to invest in our future to take ownership of our own assets we can control our own destiny. But I will tell you what—if you are a Tory a money trader or a traitor you do not want that. You do not want that. So what we have got is Jenny Shipley Chris Tremain and Don Brash in charge now of Chinese banks that are coming in to this country with trillions of dollars available to invest in New Zealand. KiwiSaver the Superannuation Fund and Kiwibank are the only fair honest New Zealand players to counter that investment. What this bunch of terrible Tories is doing is exactly the same as Robert Muldoon did: undermining the ability of New Zealanders to invest in our future through a building capital fund that has real wealth and real capability.I think it is an absolute outrage that the Government is taking from New Zealanders from young New Zealanders the incentive to invest in the future not just in their own personal accounts but in the building of a capital fund that can invest in the value-added investment we need. In fact we have got Ruth Richardson in the ANZ bank trotting around the country at the moment saying two things: firstly that cooperatives are no good so get rid of Fonterra; the second thing she is saying is that we need billions of dollars to grow this economy into the future. And who is going to provide that? Oh your mate Jenny Shipley through her Chinese bank your mate Chris Tremain through a Chinese bank and Don Brash as well. The Tory Government in power now wants to undermine the growing focus on savings and investment from within this country. I think it is an outrage and I think this is a treacherous act that might seem on the face of it just fiscal responsibility.As the bill says quite honestly this “will achieve significant fiscal savings” but then it goes on to say a ridiculous statement that cutting back this $1000 “will therefore improve the value for money of this KiwiSaver scheme.” This is about undermining the objectives of the KiwiSaver scheme. It is about undermining the savings ethic of a country that has just started to realise the value in that. And the Tory mates in here and the ones out there are conspiring to ensure that we are fed a diet of foreign investment in capital rather than that built up by our own people for our own future. This is an outrageous piece of legislation and I am sure Nick Smith is going to get up on his hind legs and say it is wonderful. Justify what Jenny Shipley is doing. Justify how you can take a $1000 incentive away from the young New Zealanders who want to own their own future.Hon Dr NICK SMITH (Minister for the Environment):That speech from Damien O’Connor was another speech that shows just how financially illiterate people are on the Opposition benches. Here is their line: you borrow to save because the only way the Government in the next year would be able to provide the $1000 kick-start for KiwiSaver is to borrow the money. The members opposite have got this sort of smoke and mirrors approach that if the Government goes and borrows money to save somehow you are better off. That is a loopiness that reflects why they are on those benches and we are over here.The second point I wish to make is in respect of the issue of New Zealand’s net foreign investment position. I agree with Mr O’Connor that it is absolutely critical that we grow the net wealth of this country but I want to invite the member to have a look at the Budget tables. What they show is that over the course of the years that Mr Damien O’Connor was in Government New Zealand’s net investment position declined in every single year. In fact—Hon Damien O’Connor: How much did you borrow Nick?Hon Dr NICK SMITH: In fact Mr O’Connor look at the figures for 2008 in which New Zealand’s balance of payments was a record worst in 50 years of minus 9 percent. Look at what New Zealand’s net investment position was when you left the Treasury benches where we had reached the point of minus 100 percent of GDP a figure that has consistently improved and these Budget documents show that it is continuing to improve.Let us come to KiwiSaver. When I sat where Damien O’Connor sits on the Opposition benches the Government of the day said that it had a target that by 2015 there would be 700000 people in KiwiSaver—700000. Do you know how many people are in KiwiSaver now as a consequence of the changed savings culture? There are 2.4 million in KiwiSaver—2.4 million. So how can the members opposite bleat whinge and moan that we have not changed the savings culture of New Zealand when we now have 2.4 million people over three times as many—three times as many—as the architect of KiwiSaver promised us back in 2007 when the scheme was launched?But I want to talk about broader superannuation issues. I listened to the radio yesterday and heard the Leader of the Opposition say that it is now Labour Party policy to means test superannuation. I was saying to myself: “Well that sounds a little bit like policy on the hoof.” I could hear the jitters right through Labour’s ranks as it realised that its latest Leader of the Opposition had suffered a severe dose—Kris Faafoi: This Budget is policy on the hoof.Hon Dr NICK SMITH: I am sorry. Does that member support the means test for superannuation? Answer the question. Answer the question. Does the member support his leader’s statement yesterday that Labour wants to means test superannuation? You see what we know is going on is that Andrew Little has a secret plan for New Zealand and he will not come clean. We found out yesterday. We got a window into his ideas for New Zealand. He has got a sneaky plan to change New Zealand superannuation which I know in my electorate in Nelson will see support for Labour further plummeting from the lowest levels ever that it achieved in the 2014 election.You see the problem is that members opposite know how to moan. They are quite good at it. They know how to whinge. They know how to criticise. But they are absolutely blank when it comes to a positive plan to take this country forward. It is illustrated by what has happened with the bills flowing from this year’s Budget. You see they have criticised the support we are providing in our children in hardship package and then voted for the bill.But here is the contradiction. Members opposite cannot vote for a bill that provides for more support for New Zealand’s poorest families in one breath then in the next breath vote against the changes that will enable us to fund that and then in the third breath criticise us because the surplus is not big enough. Well I am sorry it is time for them to go back to primer 1 or year 1 maths. Your numbers have to add up. Budgets are about choices. We are making wise choices that enable us to support those families that are most in need while at the same time being fiscally responsible.My very last point is this. I have heard in this Budget debate the whingeing and moaning about the variation of the Government’s Budget figures that showed that over the last year rather than receiving a surplus of 0.4 percent of a billion dollars we have a deficit of 0.6 percent of a billion dollars—a variation of 1 percent. I would remind members opposite before they give one of those chest-pumping vein-breaking speeches about the evils of that of what happened in Labour’s last Budget. It promised a surplus of $1.3 billion. It actually delivered a deficit of over $3 billion and was out by over $5 billion. That is it was out by 8 percent in its numbers. Bill English was out by 1 percent.Members on this side know the definition of good fiscal management. We are the first OECD country to be back in the black. We have got increasing surpluses into future years—increasing surpluses into future years. That is a fiscal record to be proud of and if any member doubts it I just ask them to have a look across the Tasman where last week the Australian Government delivered a Budget with a $40 billion deficit—a $40 billion deficit—and deficits out into the next 3 years. That just illustrates how well we are doing.The final proof of the pudding is this. New Zealanders know we are doing well. That is why this month for the first time—Hon Damien O’Connor: No they don’t.Hon Dr NICK SMITH: No they do not? Well explain this. Why is it that for the first time in 20 years there are more New Zealanders choosing to come home than leaving? Are they wrong? They are absolutely right. They know that this is a country that is doing well a country that has a plan a country that has a Prime Minister and a Deputy Prime Minister who mean what they say and do what they say as illustrated in this Budget. I am proud to be part of it and part of this bill which is part of ensuring fiscal discipline and the right choices for our country.DAVID SHEARER (Labour—Mt Albert):Would you really believe the numbers coming out of the head of that man Nick Smith the “Minister for Housing Inflation”? Here is a number for you: $800000—$800000. That is the average price of an Auckland home today and that has occurred under that man’s watch. So when he stands up and tells you about numbers do not even believe it. The worst inflation in New Zealand’s housing history has happened under his watch.If there is a Budget that separates this side of the House from the other it is this Budget and it is about “short-termism” versus putting something away for the future. This change to KiwiSaver is exactly—exactly—what I am talking about in terms of good fiscal management. It is about broken promises. Here is a promise I want to read out to you. Here is a promise I want to read out to you: “The $1000 kick-start for KiwiSaver’s members will remain as it is now.”—will remain as it is now. Who said that in 2011? Well the Prime Minister said that—the Prime Minister said that. It is another broken promise.This Government is going down the same track as its ancestors did back in the 1970s when Muldoon came in and killed the superannuation budget that was around then. He pulled it apart. People had accepted it. People believed and knew that that was going to ensure that their savings were protected and that New Zealand would have a pool of investment for the future. That pool if that vandal Robert Muldoon had not pulled it apart would have been worth $280 billion today—$280 billion. The big point about this is not just about the ability to save and to ensure that that is there for the people in the future. It is also about ensuring that that money that $280 billion is able to be invested into the New Zealand economy. It does not require us to sell off our assets. It does not require us to go into debt—and this Government has gone $70 billion into debt. It enables us to invest in our future with our own money. This Government axed that. It poleaxed that.Let us look at what has happened. In the same tradition as the Muldoon Government and the same tradition of not looking at the future and looking at cynical short-term smart alec Budgets what has happened here over the last few years is this Government has gone on and progressively cut and chopped KiwiSaver. Let us go back and have a look at what the legacy of this Government is with regard to KiwiSaver because this is not the only time it has stepped in and had a chop at KiwiSaver and tried to vandalise it. The minimum member contribution—remember that? That was 4 percent. That got cut to 2 percent in 2009. It was a cut. There is the first one.The second one is the member fee subsidy. That was cut in 2009—another cut to KiwiSaver and the incentives of KiwiSaver. Here is a third one: compulsory employer contributions. They were cut by that Government in 2009. That is three—three cuts to KiwiSaver since this Government has been in power. Four: employer tax credits—cut. Employers no longer have an incentive. That was cut and taken away. There are four changes to KiwiSaver that this Government has brought in. Five: the member tax credit—cut by $500 to members who used to get that. That was back in 2012. The last one today that has happened under this Budget is the KiwiSaver kick-start—cut. One thousand dollars has been removed from future generations—and it was given to those guys over there for sure and their families. They made sure that their families got their $1000 before they stepped in and chopped it.They were making a big play over on that side of the House that somehow this is not going to affect the take-up of people in KiwiSaver. Let us face it; KiwiSaver is fantastically successful—fantastically successful. Two and a half million people in New Zealand have signed up for KiwiSaver. Two and a half million people have gone into that system so that they can start saving for their retirement. What does the Inland Revenue Department say about that? In its analysis from people it has asked and the various surveys it has done what does it say? Well here is a fact. The Inland Revenue Department—a Government department—says that 67 percent of members joined KiwiSaver because of the kick-start. Two-thirds of those people joining KiwiSaver voluntarily did so because of the kick-start. This Government—the vandal that it is the “short-termism” that it is—has gone out and removed that and removed that incentive. It is like you have got a successful policy and what you do is you keep cutting and cutting it and cutting it and cutting it until it falls over. Then the Government will blame it on somebody else or it will not be in Government. It will leave it to us to actually have to fix up. This is a travesty. This is a Budget about “short-termism” broken promises and not looking out for future generations.But look do not take our word on how stupid this policy is. Let us take the Financial Services Council’s word. The Financial Services Council chair is Jenny Shipley a former National Prime Minister and what does it say? What does it say about this policy of cutting the KiwiSaver kick-start? Listen to this: “This is like a parent raiding their own child’s piggy bank to pay for a round of drinks already promised down at the pub.” Let me read that again just in case you did not get it clear. This is not coming from the Labour Party; this is coming from the Financial Services Council. “This is like a parent raiding their own child’s piggy bank to pay for a round of drinks already promised down at the pub.” Does that not say it all? It is about “short-termism” looking at what is in front of you smart alec gimmicky little promises and forgetting about what is actually happening further down the road for the future generations.“Raiding the piggy banks”—the council goes on to say—“of the next generation is not the smartest move when the population is ageing. It is a pity that the Government’s failure to manage its own finances will hold back some younger New Zealanders from better managing their own future finances.” In other words not only is this stupid but also it sets an extraordinarily unfortunate example to everybody else out there who says: “Look out for yourself now because who knows what is going to happen in the future.”The issue about retirement policies is that they are about certainty. You invest in them now hoping that everything will be fixed and right in 20 30 or 40 years’ time. When with every single Budget this Government comes in and cuts cuts cuts what people have come to believe is their right—and when they are putting in their money every week on the understanding that there is going to be some sort of nest egg at the end and this Government comes in and cuts it and changes it every single time—then they have no confidence in it. Suddenly we kill what has been a fabulous means of being able to save and being able to invest in New Zealand’s future. This Government is about “short-termism” it is about broken promises and it does not deserve to be sitting on that side of the House.ANDREW BAYLY (National—Hunua):It has been a perverse couple of days I have got to say. We announced a policy of providing $790 million to families in need—and it is a great thing to do for New Zealand families—and yet we have got an Opposition saying: “No we do not want to support that.” Then we have got an Opposition that says: “We should not be removing this $1000 subsidy for the KiwiSaver.” and that it wants to support other people. Then at the same time we have got an Opposition saying that we need to be in surplus. The reality is I just cannot see how the Opposition can make those numbers work. What we are doing is actually focusing on the people who really need it. That is why we are putting $790 million into a scheme that is going to support the people whom normally the Opposition wants to support. We are the ones who want to care for them. We are the ones who want to respect them. It is not only a financial package; it goes with all the other things that we are doing such as the free doctors visits for children under 13. It is also about providing better housing for those families in need. It is about getting better outcomes for the children from those families in need and that is why this Government is so focused on it. I just cannot understand why this Opposition wants to stop all of these good measures that support these families in need. It is disappointing; it is actually illogical.I just actually want to now turn to the KiwiSaver issue itself. As our colleague before just spoke of the original target was to get 700000 people into KiwiSaver. Luckily and with good management and with setting the right parameters we have got 2.5 million people in this KiwiSaver scheme—2.5 million New Zealanders who have invested in it. That is a fantastic thing and I think that we should be celebrating that. But what people do not understand is that there are still very strong incentives to continue to invest in KiwiSaver and to want to join that scheme. I point to the $521 per annum that will be paid automatically by this Government into everyone’s KiwiSaver account when they turn 18 or when they get a job—$521 per annum every year until they retire. The second thing is that there is now another strong incentive for people to want to join this scheme and that is because we have introduced this package of housing measures—the KiwiSaver HomeStart grant package—which means that people should invest in KiwiSaver because they can access more money to get the first deposit to buy their first home. That is why there are still incredibly strong incentives to be involved in this KiwiSaver scheme.I now just want to turn to some advice we received from the other side of the House. I heard these strange figures. If you invested $1000—and I presume that is from when you are born—due to compounding interest I think the figure was that you would get to $140000. I sat down before and did just a couple of little calculations and I am just struggling to make it work. Let us assume that from year zero to 65 years old we are averaging say a 5 percent per annum return. I realise that because of the wonderful management of the New Zealand Superannuation Fund we are achieving 10 percent but I have used the figure for the long-term run average of 5 percent. Actually if you used discount rates and things you are normally work about 6 percent but anyway at 5 percent do you know what the figure is? It is certainly not $140000. If you invested the $1000 at day one it would actually be worth about $23600 over 65 years. That is just a far cry from what I heard from over on the other side.Look the reality is what we are doing with that $1000 is diverting it to the people who we believe need it most. I just cannot understand why anyone in this House would want to sit there and shout out and decry what this Government is doing. This is about a Government that cares about families and that has done concrete things to make it achieve those things that will improve the lifestyle of these people create jobs and give them the dignity and the respect that they deserve. I commend this bill.A party votewas called for on the questionThat the KiwiSaver Budget Measures Bill be now read a second time.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Bill read a second time.In CommitteeClause 1 TitleDr DAVID CLARK (Labour—Dunedin North):I am very glad to speak to this bill because we are firm in opposing it. We believe that this is a bill that is stealing from the future of New Zealand. We heard David Shearer in the previous contribution read out something from the Financial Services Council that talked about robbing the kids’ piggybank to go down to the pub to buy a beer. That is the organisation that Jenny Shipley chairs. That is an organisation that is independent of this House and it can see clearly that this bill steals from the future.My first suggested amendment is of course to the title. I think that this bill should be called the “Stolen Futures Bill” because it is a bill that is stealing from future generations. In New Zealand we have a capital issue. We have had a capital issue for a long time. Treasury in the 1970s had somebody sitting at a desk trying to work out how to ensure that we had more savings. It still has people sitting at desks trying to work out how we can get more savings. Here we have the Government in a panicked measure—in a panicked measure—trying to balance the books because it has broken another election promise. It was the No. 1 election promise in all of National’s pamphlets—“We will get to surplus in the next Budget”. It is a broken promise.Those members are trying to patch that over. They are trying to make it look not too bad but actually there is a billion dollars’ difference between how things looked last Budget and how things look now—a billion-dollar black hole has opened. Their way of getting there is not by reversing any of the early tax cuts they made when they gave the top 10 percent 40 percent of the value of the tax cuts. No they did not consider doing that. What they said they would do is take out of the hands of future generations out of the hands of children a $1000 KiwiSaver kick-starter. That is what constitutes vision now from this Government. That is what constitutes vision. That is the big idea in the Budget—“Let’s take 1000 bucks off the kids.”Well that is shameful. That is no future. That is a “Stolen Futures Bill”. It is not a bill that should simply be called the KiwiSaver Budget Measures Bill. That is an Orwellian description of what is going on here. We know that this is National hitting the panic button saying that it has failed to get to surplus for the seventh time in a row—in contrast to Labour’s nine surpluses in a row—and with that it is taking from the pockets of children. As I have said the Financial Services Council is saying that this is money taken out of kids’ piggybanks to buy beer at the pub. Well that is a pretty clear picture. That is the stolen future. That is what it looks like for Kiwi children and for Kiwi workers.Australia which does have a decent savings set-up for retirement has got $1.3 trillion in the bank. That money is waiting for small-business people to come along and invest to build the economy. In New Zealand if Muldoon had not shut down a similar scheme we would have had hundreds of billions of dollars. National Governments before this one have lacked vision and this one is in the pattern—this one is in the pattern. That is why we are opposing this bill. It should be called the “Stolen Futures Bill”.I want to also suggest that it could be called the “Robbing Peter to Pay Paul Bill”. In this Budget the Government has brought in some measures to help those who are at the hardest end of things. Of course the Government made some big cuts in the 1990s and this in real terms certainly will not compensate for those. The Government has done some good in the Budget and we want to acknowledge that but we do not think that that good stuff should happen at the expense of those who are just a couple of rungs further up the ladder—those who are working hard struggling to get ahead and having money taken out of their pockets so that this Government can get to an imaginary surplus which it will never get to if it does not have a vision. It will never actually get there if it does not have a vision.The Government is reliant on commodity price cycles. It has failed to diversify the economy. It has failed to get to the target of 40 percent of exports which it set for itself. Exports are now below 30 percent and they are dropping. They have dropped from last year and are projected to drop further in the year ahead. That is because the economy as it stands currently is built on immigration and the money flowing in for the earthquake recovery. That is not the way to build an economy. Successful economies overseas have diversified. They have not robbed Peter to pay Paul. They have not taken money out of kids’ pockets. They have not taken money out of hard-working New Zealanders’ pockets in order to try to achieve an imaginary surplus.The third title that I want to suggest might be more appropriate is the “No Vision Bill”. The reason I think the title “No Vision Bill” is appropriate is that that is exactly what this bill shows. This bill shows no vision. This is a Government that has no plan. It has panicked. If we needed any evidence of that we could turn to the regulatory impact statement prepared by Treasury. Paragraph 1 says: “This regulatory impact statement has been prepared by the Treasury in consultation with Inland Revenue.”; paragraph 2 says: “The advice was requested in advance of Budget 2015 and therefore has been prepared urgently.”—urgently. This was a quick fix because the Government was out of pocket; it was heading for deficit again. The Government did not even get to surplus but it thought it would have a go at robbing the pockets of hard-working New Zealanders middle New Zealanders in order to try to get close. Well the Government has got egg on its face.Then if we skip down to paragraph 4 we see: “The analysis has not focussed on the effect of policy options on national saving as was the case with the KiwiSaver policy changes announced with Budget 2011.” The Government was short of time. It could not even assess what the impact of this was going to be. That is also stressed in paragraph 5 of the five paragraphs on the front page of the regulatory impact statement where it says: “There has been only limited consultation because of Budget sensitivity and a likely behavioural response.” Treasury understands that incentives matter. This Government does not seem to get that. It claims to be economically literate yet it does not even understand the advice provided by Treasury which says that if there is no incentive people will not sign up.If we needed a clearer example of that it is provided in the Inland Revenue Department’s final summary evaluation conducted over 7 years of the scheme—over 7 years. It is estimated that this scheme has caused additional savings of 36 percent. That is 36 percent of savings in New Zealand that would not have happened otherwise. KiwiSaver has initiated a savings culture and that is thanks to the Labour Government’s vision back when the scheme was started. Thank you Dr Cullen is what members should be saying from those benches opposite—thank you Dr Cullen. The reasons New Zealand has savings are of course the Cullen fund and KiwiSaver. All that these people can do is chop KiwiSaver. They have made eight cuts to KiwiSaver. It is a Budget of no vision and this is a bill of no vision. It should be called the “No Vision Bill” or as I suggested earlier the “Stolen Future Bill” or the “Robbing Peter to Pay Paul Bill”. There are many other names more suitable than the name the bill has been allocated.I want to ask members opposite to examine their consciences. I wonder how many of them took the $1000. I wonder how many of them took the $1000 for their KiwiSaver schemes—how many took the kick-starter—and how many of them are now going to have constituents coming through their doors saying: “How come it was good enough for you? How come MPs how come Ministers how come National Government it was good enough for you to take the $1000 kick-starter and then pull the rug out?”.We know that in the next 4 years half a million Kiwis will miss out on this $1000 kick-starter. Many of them will be on low wages. Many of them will be in their first jobs. They will be on $15 an hour working part-time because $1 an hour counts as being employed under this Government. They will be saving $2 a week if they are lucky. A thousand bucks in your bank account is a good incentive. When you go up to $1002 or $1004—it may sound meagre to those National members but a thousand bucks is really a lot of money to people who are struggling to get by and who want to start thinking about their retirement. Starting out with two bucks in your account or four bucks in your account is pretty demoralising.These guys are prepared to take that away. They are prepared to say they are going to rob Peter to pay Paul. They are prepared to give up and admit they have got no vision for New Zealand’s future. They are taking money from those who are just one or two rungs up the ladder in order to try to look like they are doing something for the hard end of town. But they made the cuts in the 1990s. They are the ones who actually caused the issues they are trying to cover over now.We wonder whether the Government will ever get to surplus. It probably will eventually—it probably will eventually—but not through any vision of its own. The Government has made promises to get there sooner. It has so mismanaged the economy. It has failed to diversify in the good times it has failed to promote new business opportunities and here once again the Government is depriving the country of the opportunity to save and to have capital depth and to encourage businesses so that businesses can access capital in those big KiwiSaver funds to promote New Zealand’s economy. The Government does not seem to have a vision for the economy. All it is focused on is breaking promises. John Key said: “We won’t put GST up.” It has gone up to 15 percent. “We will get exports to 40 percent.”—that has not been done. “Pushing out the $7000 wage increase for employees”—the Government is breaking promises.TRACEY MARTIN (Deputy Leader—NZ First):Kia ora and thank you Mr Chair. I will take just a short call on the KiwiSaver Budget Measures Bill—just around the title of the bill. New Zealand First would like to offer some more appropriate alternative titles. Let us start with the “I’m All Right Jack Bill”. This is a Government that has forced beneficiaries into budgeting services so that they can better manage the little amount of money that they have and so they must go into budgeting services when they go to seek food because they are so desperate. This is a Government that does not understand the maths of its own Budget. This is a Government a member of which stands up and says: “I actually can’t make the numbers work.” and yet this is the bill it has put on the Table. Also the reason why “I’m All Right Jack Bill” would be a better title for this piece of legislation is that every member in this House has a substantial contribution from the taxpayers of New Zealand to their KiwiSaver accounts. How about we did not have a look at cutting that. How about that instead of taking this incentive from the everyday New Zealanders who require it and from the young people who are going to come into the workforce ongoing? To say that people are not going to sign up to KiwiSaver ongoing just does not make any sense when we continually have young people growing up and joining the workforce. For goodness’ sake! Think it through before you bring legislation to the House.Here is another one. Here is another title: the “Chop Our Nose Off to Spite the New Zealand Public Face Bill”. No matter what we are going to get into some sort of—an artificial—surplus. I will take a bet with you Dr Clark. I will take a bet. I will bet that this Government will not reside on those benches long enough to get into a real surplus—a surplus that is actually real. You and I—a bottle of lovely red wine that my husband produces. If I lose that bet it is on you. Here is another title that we might like to consider: the “KiwiSaver Blind Ideology (Surpluses At All Costs No Matter What It Does to the New Zealand Public) Bill”. How about that? Listen to the maths. I actually noticed that there was silence for a moment there when Fletcher Tabuteau who knows what he is talking about went away and did the maths. Mr Woodhouse has not done the maths and neither has any other member on the backbenches. I would actually suggest that it was very interesting that Mr Bishop remarked how many members of the Government benches there were down here today in the daylight actually talking or being around here for this very important bill as they stripped away an incentive from the New Zealand public from the young people who are going to come into the workforce and are going to join that scheme. So I suggest that the New Zealand public go and have a look at 8.35 p.m. 9.35 p.m. 10.35 p.m. and 11.35 p.m.—go and check out Parliament TV from last night and just tie that in with the comments that Mr Bishop made earlier today.Here is another title: the “KiwiSaver (I Don’t Know What I Stand For But My Whip Told Me To Vote For It) Bill”. This is what we have here. This is actually an incredibly important piece of legislation that has major downstream effects for the New Zealand family whether it be through the economy side of the New Zealand family or for each individual New Zealand family or each individual New Zealand worker. There are downstream effects of this for money flowing back into New Zealand and New Zealand being able to invest in itself the New Zealand family being able to back itself with its own money as opposed to seeking overseas money. This Government is very good at saying that New Zealand needs more investment. We agree. We would like to see New Zealanders being able to back themselves and long term this is exactly what this fund has done. But not only has this Government decided to strip away the incentives at the start of the scheme for any young person who wants to join up it has decided that you can now rip your contribution out. Instead of the purpose the scheme was made for you can rip it out and go and buy a house with it. So basically what the Government has done with this bill is again it has removed its responsibilities and its obligations to manage the economy wisely. It has decided that it is going to put this back on to the New Zealand public and the New Zealand public needs to be aware of it.CHRIS HIPKINS (Labour—Rimutaka):This is where the Budget spin starts to become unravelled because although the National Government in its Budget on Thursday proclaimed that it was going to do something for New Zealanders who were feeling left behind for New Zealanders who were struggling to get ahead the reality is when you break it down when you get through the spin this Budget actually penalises those people some more.So let us look at some real examples of real people who might be affected by the changes in this year’s Budget and let us take someone who is on an unemployment benefit for the average amount of time. Bear in mind that despite all of the rhetoric people are typically on the unemployment benefit for less than 6 months at a time. You might not know that when you hear the rhetoric about the unemployment benefit but the average person who has one is on it for less than 6 months.So let us assume that they are on the unemployment benefit for 6 months and they have children. They would benefit by about $650 from the changes that the Government has proposed to increase their benefit. Let us say that they then get a job and this is the first time in their life that they have a job with sufficient income to sign up for KiwiSaver they lose a thousand bucks. That is the reality. So the National Government gives them $650 with one hand and takes $1000 off them with the other. That is the reality. Break down the spin go through it and then you work out that actually they are not going to be better off; they are going to be worse off under the Government because it is giving a small amount with one hand and taking a larger amount with the other. That is the reality and there are everyday New Zealanders who will be in that position.When members on the other side of the House talk about beneficiaries they only ever talk about the people who are on a benefit for a long time and they neglect to tell the public every time that the vast bulk of New Zealanders who rely on some form of benefit do so for a short period of time. It is a stop-gap measure for them when they find themselves in hardship and this Government neglects to tell the public about that. It is happy to stereotype people living on benefits when actually the vast bulk of people who are on a benefit are on a benefit for a short period of time. They will be penalised by this because they will lose the opportunity to get the $1000 KiwiSaver kick-start and I think that is wrong.I think it is wrong that somebody who signed up their child to KiwiSaver on Wednesday gets $1000 and somebody signing them up on Friday does not. That is simply unfair. It is unfair that the Government did not signal this. It was never promised in its manifesto. So New Zealanders had the comfort of knowing that at some point in the future if they found themselves in a position to join up to KiwiSaver that kick-start would be there. Had they known had the Government had the decency to give them warning they could have signed up and got the $1000 kick-start. The Government knows that because if it did not we would not be here under urgency backdating this legislation to Budget day and robbing all of the New Zealanders who are not in KiwiSaver of the opportunity to sign up and get the $1000 kick-start.Let us just be clear here. The people who are in KiwiSaver now are more than likely to be in middle and upper income brackets. It is the people in the lowest income categories who struggle to get into KiwiSaver and yet that is something that I know they aspire to. Aspiration used to be something that the National Party was proud of. Now if someone is on a low income and aspires to be in KiwiSaver they are kicking them in the guts by taking away the $1000 kick-start that middle and upper income earners benefited from.This is another kick in the guts to people on low incomes and to future generations of New Zealanders. To the tertiary graduates who will be leaving university or polytech or their apprenticeships and moving into full-time fully paid employment for the first time signing up to KiwiSaver—they have lost the $1000. And of course we know that tertiary students continue to be hammered by this Government as well. It is simply unfair.The National Party hated KiwiSaver from the beginning. It was a package of measures that John Key called communism by stealth. Let us not forget that. When Working for Families and KiwiSaver were introduced by the last Labour Government a Government that I should remind people produced nine surpluses in a row to National’s seven deficits—when we used those surpluses in the good economic times to introduce KiwiSaver to save for the future to boost family incomes through Working for Families to reduce the burden on students by having interest-free student loans John Key railed against those policies and called them communism by stealth.National hates KiwiSaver and that was absolutely evident from the very first moment it became Government. What did it do? When National first became Government it cut the member contributions. That was cut No. 1. It then cut the member fee subsidy of $40 per annum. That was cut straight away. It cut employer contributions. This all happened straight away. National halved the size of KiwiSaver straight away in its first Budget and it ceased to provide the employer tax credit. Those four cuts were all made in its first Budget. Those were the first of the KiwiSaver cuts made by the National Government.But then the Government came back in 2011 and it had another go. It halved the member tax credit in that year as well. This was yet another cut. And then it made further cuts to KiwiSaver and now this is the latest one. Eight cuts all up this Government has made to the KiwiSaver scheme since it came into office.This is a Government that hates KiwiSaver. Yet Bill English knows in his heart of hearts and they all know in their heart of hearts that New Zealand still has a savings problem. Anybody looking at the wider set of New Zealand’s accounts knows that we are spending more than we are earning and that that has been the case for a very long period of time. KiwiSaver was one of the measures introduced to try to curb that to try to get New Zealanders saving more. It was a good measure and it still is a good measure and I am pleased it is still there. But we should be looking at getting more people into KiwiSaver and putting more money into KiwiSaver because it is a key part of making sure that New Zealanders break even and make ends meet.We heard a lecture from Nick Smith about the Opposition not being able to get their numbers to add up. This Government has not managed to get its numbers to add up for 7 years because if they did add up we would not be in deficit. For 7 years its numbers have not added up. The Government has been in deficit every year. What does that mean? It means borrowing. National has been borrowing every year that it has been in Government. It has been contributing to the problem of New Zealand as a country spending more than it earns. We have to deal with that and Bill English knows in his heart of hearts that that is a challenge for New Zealand. So why is it that time after time he comes to the House and proposes cuts to one of the few things that we are doing that is designed to turn that round and to increase our savings rate?Then of course we have got the Government saying: “Well actually you can cash up your KiwiSaver for your first-home deposit.” That was something that the Labour Party has supported as well. But is it not sad that we have reached that reality now where New Zealanders even if it they cash it up cannot afford to buy a first home? Those in the middle-income brackets who can are having to face a trade-off between saving for their retirement and buying their first home. I think that is a tragedy. I think it is a short-term stop-gap measure. It is good—it is a good way to get people on to the property-buying ladder but long term we have got to look at other things. We have got to look at ways that people can own a home and save for their future. Furthering KiwiSaver by making sure that there are good incentives to join by making sure that we are increasing contributions to KiwiSaver—whether it be through Government contributions employer contributions employee contributions and the like—will all make New Zealand a richer country in the long term. Instead what we are seeing with the current Government is that it is content to manage things for today and not plan ahead for the future.So many of the things in this year’s Budget are designed to create the illusion of doing something but they do not. When you break down the spin when you look at it they are not actually helping the people they claim to be helping. I want to just reiterate that point that I made that for somebody who is moving off a benefit and into work if they have been on a benefit for 6 months—which is about the average time that someone is on an unemployment benefit—they would have benefited by $650 through the increase in benefits and that is great. I think that they would enjoy that and I think that they would find that as a welcome relief. But when they finally get into work and they finally get to join KiwiSaver for the first time they find that not only is that $650 taken away from them but another $350 is taken away as well because they lose the $1000 KiwiSaver kick-start that they otherwise would have got. That is the reality. So let us break down the spin. Give a small amount with one hand take a larger amount with the other hand—that is the reality of what the current Government is doing.KiwiSaver is a good scheme. The kick-start has resulted in a whole heap of people joining KiwiSaver. Removing the kick-start penalises people who for whatever reason—Joanne Hayes: I raise a point of order Mr Chairperson. The member is not even addressing the clause—the title.The CHAIRPERSON (Hon Chester Borrows): The debate on this clause is wide ranging. It will continue to be wide ranging for some time yet. When we get into the other clauses they are much narrower and so that will be enforced most closely.Hon Michael Woodhouse: As I understand it there was no leave sought for these clauses to be taken as one question and traditionally in the Committee stage of the House the title part of the bill is at the end of the Committee stage not at the start which does of itself form something of a wind-up. But in this situation we are debating clause by clause—CHRIS HIPKINS: 114/7—read it.Hon Michael Woodhouse: —and my understanding is that that requires the member to stick to that clause.The CHAIRPERSON (Hon Chester Borrows): I do not need any further help with this. In spite of the unlawful interjection I do draw the member’s attention to Speaker’s ruling 114/7. Because there was no select committee process on this bill the convention is that this is a wide-ranging debate. It will continue to be no doubt for both sides of the Chamber who may want to seek the call. Chris Hipkins has 20 seconds.CHRIS HIPKINS: Thank you and I intend to use every one of them. I will be very brief. KiwiSaver is a good scheme. The kick-start was a good way to get people in it. We should not be penalising people who are not in it now but who aspire to join it. We should be encouraging them to join KiwiSaver. It is wrong that the Government is taking away this kick-start and it is wrong that it has not foreshadowed that it intended to do so.CLAYTON MITCHELL (NZ First):Just on the point of order that was just mentioned before by Mr Woodhouse I think I will start with the naming of this bill. I think this Government loves to use acronyms that confuse most of us out there in the real world who understand what the real world is about. I have got an acronym here that I think sums up this piece of legislation: the “OMG YOLO #nofuture Bill”. I know everybody back home the younger ones particularly will totally get what I mean because this bill gives no future to our New Zealanders who need this future the most.I have many times stood up in this Chamber and said that New Zealand First is not in the game of opposing bills that the Government puts forward if they make sense. If there is any sense to a piece of legislation New Zealand First will support it.Matt Doocey: Sit down then. Sit down.CLAYTON MITCHELL: Just to that Matt Doocey let me say that we supported the Telecommunications (Development Levy) Amendment Bill yesterday because that makes sense. On this bill however we could not even get a furthest widest-ranging view to conclude that this is good for the future of New Zealand. This bill is absolutely against what this country should be standing up for—the people’s future.In 2006 the Labour Government came up with the KiwiSaver legislation which gave Kiwis a $1000 kick-start incentive to get them thinking about their future. I took advantage of that and I am sure everybody on the other side of the House took advantage of that even if they were not in politics because it made sense to. It does not matter what compounding interest rate you are going to be using there Mr Bayly. Whatever that is whether you want to make it 5 percent under your calculations and say it is going to be only $24000 or whether we are going to be using 10 percent—and let me remind you 10 percent is conservative at the moment when the AMP KiwiSaver investment scheme is averaging out at 16.8 percent at the moment.I know this because I have just changed mine into a bit more of a dynamic fund. It is getting 10 percent so it is going to give you a heck of a lot more even if it is $100000—that is $145000. You are taking money away from Kiwis. It is short-sighted for the future of New Zealand. I have to say Mr Bayly that you justify it by saying that even $23000 is not enough. I dare say that when you retire at 65 years old $23000 will go a long long way.We have heard from people emailing and calling us over the last few days. I would love to say I had got some faxes but we do not have fax machines anymore. We have actually moved into the 21st century.Iain Lees-Galloway: Really?CLAYTON MITCHELL: I do not do the fax thing no Mr Iain Lees-Galloway. My father does and if he could he would send me smoke screens. He does not even text. The point is that we have had Grey Power come and speak to us with some serious serious concerns. This population that we are currently living in is like an hourglass population. There is a very very bulbous population of ageing people at the top a very very skinny working class of people—those who are of the age to work—and a very very large bulbous group of young people coming into the workforce.The point is that we should be thinking long term now. I know Mr Matt Doocey that you are trying to create your perfect life there but this is a very serious curve that we are talking about—[Interruption]—and I apologise to the people at home who just got an earful of me hitting the microphone. But seriously if we do not start thinking about the future and get this Government to rethink this legislation and the way that it votes we are going to have this population who are now currently working starving on the streets with very very little money to support them. I am sure Mr Chair that you have got some investments that would make—The CHAIRPERSON (Hon Chester Borrows): Do not bring me into this.CLAYTON MITCHELL: I apologise. The point is that if we do not think about the future of our New Zealanders now and bring this legislation back into the fold then we are going to have some grave concerns for the future. I had a phone call from a gentleman who is a constituent in Tauranga. He has also contacted the local Minister from Tauranga to put his concerns forward. He was right in the very stages of signing up his three children aged 4 6 and 9 years old to the KiwiSaver programme—we are talking about filling out the forms to get them sent in. But this retrospective piece of legislation which takes effect going back to Thursday of this week stops his ability to get his children signed up. In fact just last week my wife and I were talking about the same thing for our three young children—that we should be thinking about getting them signed up.How many New Zealanders are missing out because of this quick fire from the hip? The Government is shooting down the legislation pulling the carpet from underneath their legs and not giving them the time they require to ensure that they have the means to put that into place. Two years would not be unreasonable. When you look at all the legislation that is coming through now and the 2 to 4 year time period for the implementation of the legislation that would not be unfair. In fact there is an amendment on the Table in the name of Mr Fletcher Tabuteau that actually if it could get support might be a little more palatable than cutting the legs off before we have got the chance to actually speak to it. We strongly hope that this Government reconsiders this motion. To that end we understand the fiscal constraints of any Government. This Government with its bad budgeting over the past 7 years is clearly having some issues with getting the books to balance up so we understand that some cuts need to be made. But it is a zero-sum gain. When you are giving $25 a week to the people who need it the most—and hey look at the end of the day a little bit helps; I do not think it helps enough I think GST off food would help far more of our poor starving and impoverished people than giving them a $25 a week handout. Taxing food to me is just obscene. But at the end of the day the Government has given that and well done for that but taking away from their future is absolutely crazy thinking.I would like Government members to reconsider what they are doing there because if they even thought about looking after the fiscal constraints and reducing the $1000 kick-start to even $500 in 2 years’ time we could probably understand that—decisions need to be made. But what about the uncollected taxes? Again I will give credit to the Government where credit is due: in the latest Budget it has just put $74 million to increasing its ability to actually go out and get the tax that needs to be collected. Twenty-nine million dollars 40 percent of that $74 million is going to specifically target those people who are using their housing schemes their residential properties and that will increase the tax collected.The rest of that money should be going into corporate tax evasion. The very wealthy in this country—we are talking about people who have got hundreds of millions of dollars—are gloating that they pay only 12 to 15 percent tax when the rest of us are paying more than our fair share. And why should we not pay our taxes? We owe it to society. The money that at the moment is sitting in the red is about $7 billion—$7000 million in uncollected taxes and if this Government spent some of that money to go and collect we could actually afford to do both—$25 a week as well as a KiwiSaver kick-start. It makes good economic sense for the now and it makes good economic sense for the future.We do not support this bill in its current form and we would like to see this Government change the way it is thinking about the future of New Zealanders. Thank you.KELVIN DAVIS (Labour—Te Tai Tokerau):I would just like to take issue with my own colleague Chris Hipkins because towards the end of his speech he said that KiwiSaver is a good scheme. Let me tell you this: KiwiSaver was a good scheme. It was a good scheme in 2006 when Michael Cullen had the courage to set up a far-reaching scheme with a vision for the future. But what has happened? All we have seen under this Government is KiwiSaver get cut cut cut cut cut. Eight cuts we have heard of today.There was the minimum member contribution cut. That has been taken. The member fee subsidy—that has been cut. The employer tax credit—that has been cut. Compulsory employer contributions—they have been cut. The member tax credit—that has been cut. And now the $1000 kick-start—that has been cut. We have a member on that side of the Chamber saying they will still be able to get $521 in annual payments. I just query how long before that $521 a year is also going to be cut. The KiwiSaver scheme has been absolutely gutted.The Government lacks vision. They lack courageous policy. The KiwiSaver policy was far-reaching. It was going to help our generations into the future and that is why I say that this bill should be named the “Dismantle Our Children’s Future Bill”. It is just dismantling the future so that people can scrape by in the present. It is doing nothing at all to look after future generations. This is terrible.We had Nick Smith sitting over there. He was throwing figures around facts and figures. He is trying to make himself sound intelligent and then he says that New Zealand is the first country to get into the black. I was sitting here and on Thursday I am sure I heard the Minister of Finance say that we are still in deficit. I am positive that is what I heard. Two days later Nick Smith is standing up and saying we are in the black. He does not even know his colours let alone his figures and that is why I resent that party over there standing up and saying that this side of the House does not know what we are talking about when it comes to the economy. It is an absolutely shameless distortion of the truth to hear these people say that they know what is good for the country.National has absolutely gutted KiwiSaver. This bill should be called the “Money-Go-Round Bill” because all it is doing is taking from this side and giving it over here. There is absolutely no long-term vision. This is just about living in the present. The difference between our side of the House and that side of the House is that we do not only live in the present; we live in and think about the future. We think about the future and our kids and we know that there are going to be more good moments in the future not just living here and thinking about this moment in time just to make ourselves look good in this moment in time. It is about thinking about the future.Working for Families was thinking about the future. And as we have heard John Key was the man who said this is communism by stealth. That party over there is taking credit for our policies. That party over there is taking credit for what this side of the House did those years ago. KiwiSaver—those members are saying there are 2.5 million people on KiwiSaver. And it is just more popular than ever—well it is more popular because it was a courageous policy from this side of the House and now National members are taking credit for it. They live in the past; we think about the future. They are taking credit for what the last Labour Government did in 2006. That is because Labour always thinks about the future. Labour thinks about what we are going to do to make the country better off in the future. These guys are just worrying about the next Budget.Five hundred and twenty-one dollars a year—I would say that is going to go from KiwiSaver in the next Budget. And we are going to have the ninth cut to the KiwiSaver policy. National is just making things worse for the future. It has absolutely no idea about how to make the lives of our children better off. This is a panicked knee-jerk reaction—JACINDA ARDERN (Labour):This is our opportunity in this part of the debate on the KiwiSaver Budget Measures Bill to talk about what we believe this bill should be called. The most obvious thing from my perspective is that if this bill were really speaking the truth it would be called the “Widening Intergenerational Inequality Bill”. It feels like Groundhog Day for me to be in this Chamber yet again debating another measure to cut the savings base for New Zealanders in this country.Chris Bishop: It feels like that for you? Goodness me.JACINDA ARDERN: I still remember Chris Bishop my very first Budget in this House when that National Government made substantive changes to KiwiSaver. I remember vividly walking outside to the Noes lobby and seeing Michael Cullen sitting on the couch there with this absolutely devastated look on his face. All of the work that the Labour Government had done to build up savings in this country to make sure that New Zealanders had a nest egg that meant that they would not just scrape by on a pension but have quality of life in their old age—in one fell Budget that Government gutted it. I remember that Budget to this day. National has done it eight times since—and that is just during my time in this House. That is not to mention what National did under Muldoon to devastate the potential that we had in New Zealand to have a massive savings base.We talk about the gap between New Zealand and Australia—that is when that gap started. The Australians made the sensible decision to have a decent superannuation scheme across the entire population and we had that opportunity under Kirk. But once again National demonstrated its short-sighted approach when it comes to savings and it gutted them. They absolutely gutted them. Everything that we have been doing since then has been to try to regain that ground. And again here we are with another demonstration of the fact that that Government is absolutely disinterested in what it is doing for future generations. It is not just savings. It is housing where we have a generation of renters. It is education where student loans are mounting for the next generation. And it is even things like climate change.If that Government wants to prove that this bill is not about intergenerational inequality that it is not about their having more than what the next lot will get I challenge just one of them to stand up and say that they did not take the $1000 KiwiSaver kick-start themselves. Because that is what we are cutting today. We are cutting something that I would almost guarantee every single one of the MPs on that side of the Chamber took up. We did—we did. We put it out there and said that it was for everyone who joins. Did that side of the Committee do the same? I challenge just one of them to say that they did not because if all of them did then they are absolutely depriving everyone else of something that they benefited from. I also challenge members on that side of the Committee to stand up and tell us—give us a guarantee—that they did not tell their kids to sign up before they took it away as well because that is what we are debating today. This bill will stop anyone else from getting that $1000 kick-start contribution which we know so many would have taken.In my short time available I also want to point out that this bill starts from the time that the Budget was passed and yet how long are we waiting for $25 a week to go to beneficiaries? It is not happening until next year. So we take immediately and we leave everyone else to wait until they can gain that kind of small amount of money.This is a bill that should be renamed the “We Choose Sticks Instead of Incentives Bill because this bill was always about incentivising people to join KiwiSaver. But we know that that side of the Committee never wanted people to join. And where is the evidence of that? Well I have got a little article here from the New Zealand Herald dated 1 March 2006. When Michael Cullen introduced the idea of KiwiSaver he said that it was his aspiration that 25 percent of workers join it and things like the kick-start contribution were there to motivate people to do that. What was the National Party’s response to that? The National Party members’ response to that was to say that they thought he was dreaming. They said in 2006 that Michael Cullen was dreaming that people would join up at a rate of 25 percent. Well how many do we have now? We have 2.5 million people in this scheme. That Government never wanted Kiwis to have KiwiSaver.Hon ANNETTE KING (Deputy Leader—Labour):I have to say we started off this morning with a very spirited debate from the members opposite defending the indefensible. I have to say it was such a good start that the Minister who is in charge of this bill the Hon Todd McClay did not know he was in charge of it and tried to move it in somebody else’s name.We have had to listen this morning to National members sitting opposite crowing about how great they have been to beneficiaries and the payback is because they are going to take it off KiwiSaver. They said: “We are the first Government in 43 years to give money to beneficiaries.” What they forget is that they were the first Government in 43 years to cut the benefits to beneficiaries—to cut the benefits to beneficiaries. They have forgotten about Ruth Richardson and the “mother of all Budgets”. That has all been glossed over. When we brought in Working for Families that was communism by stealth! Have they got rid of it? No they have not. They just fiddle around the edges of it. When we brought back income-related rents which helped those on the lowest income they opposed it. When we brought in 20 hours of free early childhood education they opposed it. The one that I really like because we have had to listen hour after hour to Paula Bennett speaking on it is that we kept the training incentive allowance to help people get off the benefit but she took it for herself and then canned it. This is another example of National members taking what they can for them and taking it off others. That is exactly what is happening with KiwiSaver today.I wonder whether National has any idea of how many people under 18 have signed up to KiwiSaver. The latest figure we have got from 2013 is 352600 young people under 18 have signed up to KiwiSaver. So we have got young people signing up. Why were they signing up? Not because they were necessarily in work; most of them were not. They signed up because they had the incentive of the $1000 that was going to be there for them to build on when they became KiwiSaver contributors. They had the $1000.What National has forgotten is that there are going to be more babies born. It is just a fact of life. There are going to be about 60000 children born every year in New Zealand in the foreseeable future. They might have wanted to join up to KiwiSaver. Maybe their parents might have liked to join them up to KiwiSaver. I challenge the members opposite—just one of them—to say that they did not sign their children up to KiwiSaver. Well I wonder whether the member himself took the $1000 for KiwiSaver. Would he like—[Interruption] He cannot remember. Well that is always a sign that you did. So he cannot remember.Hon Michael Woodhouse: I did.Hon ANNETTE KING: Oh he did take it. So why would the Minister in the chair take $1000 for himself and deny it for future generations for our kids for those who have not yet joined KiwiSaver? It is a pretty mean-spirited approach.Government members say we have to do this to pay for the beneficiaries. Are we not generous? Well just go back and think National members. If you had not given billions of dollars away in tax cuts to the wealthiest which included everybody in this Committee you would have money to give to beneficiaries you would have money to invest into our regions in New Zealand and you would have money to invest in jobs. But you saw that you ought to give it to the top 10 percent of New Zealand and then we did not have the money for beneficiaries. We did not have the money for health. We did not have the money for a whole lot of things.I wonder whether the members opposite can remember the promises their party made in 2008. I have to say you are meant to believe the word of a Prime Minister. The Prime Minister then in Opposition said National would retain the policy. There would be no radical changes to this policy. There were eight cuts to the KiwiSaver scheme in the 7 long years National has been in Government. That is one for every year and that is on a solemn promise that National would not change this scheme radically. I have to say I would actually rename this bill the “Fess Up to Chicanery Bill” because that is exactly what this is. The Government makes promises and then breaks them. It tells the people that it will do one thing and then it does something quite different.Hon MICHAEL WOODHOUSE (Minister of Immigration):I find myself drawn into the debate in a way I did not quite expect simply by putting up my hand and saying that my own children are not in KiwiSaver but I am. That is fair enough. Yes I thought as the chief executive of Mercy Hospital in Dunedin that all of my staff regardless of whether they were doctors at the top end of the salary scale or our lower skilled workers should take up KiwiSaver but the question and the thesis we have now is whether or not the incentives have been destroyed. The simple challenge that the members opposite have made is that every single member of the National caucus should give the $1000 back. So here is my challenge to them: if they are so principled about the changes that this Government has made I want every one of them who are currently paying the 39 percent top marginal tax rate when they do not have to to put their hands up—but they oppose that tax cut. So if they can say that they refused the benefits that this Government imposed that they were so principled that they continue to pay the 39 percent top marginal tax rate I will pay my $1000 back. I will write the cheque today because what is good for the goose is good for the gander.I want to come to Mr Tabuteau because Mr Tabuteau is the one sensible rational New Zealand First member who has half an ear on economics. I understand he lectured in economics but he is very tricky about those numbers. I like Mr Bayly the very smart fellow chartered accountant on the National caucus was fascinated by the use of the 10 percent rate of return. What is really interesting is that if you do get the excel spreadsheet out and calculate the future value of that lump sum using a 10 percent hurdle rate in the 50 years that Mr Tabuteau described between the 15 years and 65 it is indeed nearly $118000. Except what Mr Tabuteau forgot was that people have to pay tax. Maybe he does not but that 10 percent rate of return is a gross return. We know that the long-run rate of return in investment schemes is not 10 percent because there are hard times not that Mr Cunliffe would have told you that when he said that we should have been borrowing to invest in the New Zealand superannuation scheme. He never said that. In fact if he was such a genius about how to predict the market why in 2007 did he not trot along to the good Dr Cullen’s office knock on his door and say: “Guess what Mike? I think the rates of return are going to drop. We should pull out of those equities and go into fixed interest before the super scheme plummets.”?The simple fact is we cannot. Over 50 years there are good times and bad times. So the long-run rate of return at an after-tax pay rate of say a generous 6 percent in those 50 years is $18000. It is not to be sneezed at but it is not $118000.Hon David Cunliffe: You’re a medical doctor not a PhD.Hon MICHAEL WOODHOUSE: I am a chartered accountant Mr Cunliffe. Here is what else he did not say. The future value of the $175 million annuity which is the investment the Government would have to make if the Labour Opposition kept it—and that is fine; it has that prerogative to campaign on that—at the same 6 percent rate of return is $54 billion. So we take away the $18000 future value of that initial investment and we burden those 15-year-olds with an extra $54 billion of debt because we do not have cash in the bank to pay that $1000. We would have to borrow it. If we use the Government’s average interest rate of about 6 percent that is an extra $54 billion burden that this Opposition would have us have. It only knows how to borrow spend other people’s money and tax. Just remember it knows how to tax people but it is not so principled that it would pay the 39 percent marginal tax rate. I will get my cheque book out and I will write that $1000 cheque when one of them—one of them—can demonstrate that they are paying a 39 percent marginal tax rate.The CHAIRPERSON (Hon Chester Borrows): It is going to be a long day. I note that last night we were tired and giggly. Today I would like us to not get tired and scratchy. I can assure the members on my left that I heard their cunning and clever interjections the first 15 times they repeated them. Just remember the directions of Speaker Hunt that interjections are rare reasonable and hopefully witty. I look forward to those colourful comments through the course of today into tonight next Monday or however long it takes. If you just manage to match the noise levels speaker to speaker I am sure we will progress very well through the business of today.IAIN LEES-GALLOWAY (Labour—Palmerston North):Let me start where the Minister left off. The Minister said that members on this side of the Chamber only know how to borrow. That is from a Minister of a Government that has been in Government for 7 long years and has borrowed for every single one of those 7 years. There has been $83 billion worth of debt amassed by that Government over there and it has the temerity to lecture this side of the Chamber the parties that ran the Government that got New Zealand into a zero net debt position for the first time in our history that ran 9 years of surplus 9 nil. That side of the Chamber cannot lecture us about borrowing because all the Government knows is how to borrow. It borrows so that it can afford tax cuts for its rich mates. That is what it borrows money for—so that it can afford tax cuts for its rich mates.The title of this bill is the KiwiSaver Budget Measures Bill. I wonder whether any of the people who have come along and are sitting in the gallery on a Saturday morning watching this would have any idea reading that title what the KiwiSaver Budget Measures Bill actually does. This title tells us nothing. This Government is perfectly capable of giving bills titles that tell us what they do. We had the Anti-Money Laundering and Countering Financing of Terrorism Bill. That told us what that bill was pretty much about. We had the Crimes (Match-fixing) Amendment Bill. I think we all knew what that one was about. Even the rather dry Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill gave us a pretty good hint of what that bill did. I could probably spend hours reading out names of bills but I will not do that. The thing is what the Government does is it gives a bill a title that is meaningful when it is proud of it. The Government is not proud of this bill because it is hiding what the bill really does by giving it the driest most bland title that would not give anybody outside of this House the slightest hint of what this legislation does.I have got a better title. I would call this bill the “KiwiSaver Cut Bill (No 8)”—the “KiwiSaver Cut Bill (No 8)”. Because what it does is it implements the eighth cut to KiwiSaver that has occurred under this Government in less than 7 years—eight cuts in less than 7 years—although we are not that surprised because members on that side of the House hate KiwiSaver. They hated it when it was first brought in. They hate the idea of people in New Zealand saving for their future.It was the National Government under Muldoon that got rid of the Kirk Government’s superannuation scheme. This country would be unrecognisable to us today if that superannuation scheme had remained in place. We would not be so desperately reliant on foreign capital if that superannuation scheme had been left in place. But the National Party does not think of the future. The National Party never thinks of the future. The National Party is always worried about the next Budget and the next election the here and now. There is never a plan. It is always about how to retain power.Why is this the “KiwiSaver Cut Bill (No 8)”? Well cut No. 1 was to reduce the minimum contribution rate from 4 percent to 2 percent. What did the Government tell Kiwis at the time? It said: “Oh we are putting more money in your bank account by cutting your contribution rates from four percent to two percent.” That is actually like telling someone that you have taken money out of their savings account and put it into their cheque account and that you have given them more money. Actually it just shows that the only way this Government can think of getting more money into people’s bank accounts is not through economic growth is not through wage rises; it is from stealing from their superannuation scheme and putting it into their cheque account. That is the sum total of this Government’s plan.The second cut was to the member fee subsidy—$40 per annum. That was just a little sweetener to make sure that the fees that are charged by the outfits that run the KiwiSaver accounts did not eat away too much at your KiwiSaver savings. Of course the Government’s second cut was to remove that.The third cut was to cap the compulsory employer contributions at 2 percent. Again this was saying to employers that the Government wanted them to be able to hold on to more money not through growing the economy not through ensuring that businesses’ consumers had more money in their pockets so that there was more demand for their goods and they could employ more people and pay them well. No it was by taking money out of people’s savings accounts and putting it into the employer’s accounts.JAMES SHAW (Green):I also have a suggestion for the title of this bill which is that we amend it from the KiwiSaver Budget Measures Bill to the “KiwiSaver Arbitrary Budget Measures Bill”. I say “arbitrary” because there does not yet seem to be much reasoning behind the move to remove the incentive.I just wanted to thank the Minister Michael Woodhouse for his contribution earlier because it was the first contribution from a member of the Government side that actually included facts. I found that very helpful. It included actual information and actual facts. However it simply reinforced the Government’s case that this is all about cutting costs reducing the deficit and so on. I wanted to pick up on one point with that but then I also wanted to restate some of the questions that I asked earlier on in the debate and to invite Mr Woodhouse to take another call at a later stage to respond to some of the specific questions that lead me to the idea that this is in fact an arbitrary bill. First of all he mentioned the 39 percent top tax rate before. When National first came to Government it reduced taxes for the wealthiest people in society which has left a hole in the accounts of about $1 billion a year. That would have covered the deficit and it would have allowed us to continue this scheme.The questions that I asked earlier that I have not yet received an answer for are No. 1: New Zealand is 22nd of 24 OECD countries for savings. Cutting the KiwiSaver incentive reduces the savings rate. What is the plan to increase savings? The second question is: the ANZ chief economist says that removing the KiwiSaver incentive will reduce the rate of take up. What is the plan to maintain or increase the rate of take up? Three: did the Government consider leaving the kick-start contribution in place for say 6 or 12 months in order to incentivise those currently not in the scheme to get into the scheme or to give people who are currently processing paperwork a chance to actually get it completed? Four: how does reducing the KiwiSaver take-up rate impact the intergenerational equity of today’s working parents paying for three generations’ worth of costs? How does it deal with the change in the dependency ratio from 7:1 today to 2:1 in 30 years’ time?The fifth question is: the Government is reducing a short-term deficit by raiding New Zealand’s retirement schemes—again. What is the Government’s plan for long-term financial sustainability? Six: why cut the kick-start contribution rather than the member tax credit given that we know that the kick-start contribution is the incentive that people actually know about and is the thing that actually gets them into the scheme? Reducing or removing the member tax credit would actually achieve the Government’s goal more substantially because it is the more expensive part of the scheme but it would leave in place the incentive to get into the scheme which is the most important thing.As yet during the course of this debate I have not heard responses to any of those questions and that leaves me in the position of simply having to oppose this otherwise arbitrary bill.MELISSA LEE (National):I move That the question be now put.KRIS FAAFOI (Labour—Mana):It is a privilege to speak on clause 1 I think it is of this Committee of the whole House stage. This is an opportunity for some members on this side of the Chamber to have a bit of fun with the title. My colleague Iain Lees-Galloway has come up with a few interesting titles but mine is quite a mundane title. This bill should be retitled the “KiwiSaver (Reduction and Privilege) Bill” and for the benefit of the Committee I am going to use the acronym to make things easy—the “KRAP” because that is what this is. The “KRAP” is a mean-spirited bill that takes away saving opportunities from our young people. That is essentially what this bill does. The “KRAP” will basically take money from those people who have not yet signed up to KiwiSaver and from some of our youngest and unborn children. That is what the “KRAP” does. The “KRAP” is an awful piece of legislation. When you look at the numbers the “KRAP” as I want it to be changed to is not only a mean-spirited bill in terms of what it will do for the savings regime and the culture of savings in New Zealand but it is also a fiscally cynical piece of legislation. By cutting the $1000 kick-start payment for Kiwis this Government will save about $175 million next year. The projected surplus next year just happens to be $176 million. So this is a lazy Government. It could not look to save a bit here and to save a bit there. It just takes away the KiwiSaver kick-start as part of this “KRAP”.As part of this “KRAP” we have been I guess antagonising members on the other side of the Chamber as to who should pay back their KiwiSaver contribution. It is not very often that I get to stand in this Chamber and praise a member on the opposite side of the Chamber. As it stands now—of the National members in the Chamber now—David Bennett is the only one who has not signed up to KiwiSaver. He is the only one on that side of the Chamber who has not signed up according to the Register of Pecuniary Interests. So he is the only one to whom we are not offering the challenge to pay the $1000 back. David you can leave the Chamber in the next 2½ minutes and I challenge your colleagues who have all taken the $1000 kick-start because they are all signed up to KiwiSaver. You can leave. You are not going to be criticised here. Your colleagues who are sitting in the Chamber right now are quite happy to take $1000 but from 21 May at 2 p.m. no one else can. That is the reality. Every member on that side of the Chamber who is signed up to KiwiSaver—then fine; I will take that $1000 but from 21 May at 2 p.m. no one else can. Not one person.David Bennett you are either principled or you might be a bit stupid because you should have signed up to KiwiSaver. You should have signed up because it is a great scheme which was started by the Labour Government. It is so good that 2.5 million New Zealanders have signed up to it and that National Government is trying to take credit for it. But under this “KRAP” the Government is ruining KiwiSaver. It is ruining it and it is not the first time. The Government has got a track record of doing this. This is the eighth time—the eighth time—that it has taken the knife to KiwiSaver. This “KRAP” is an embarrassing piece of legislation for the Government because it is trying to get it to a surplus that it will never achieve and it is ruining the savings culture of New Zealand. Why if something is working do you in this “KRAP” take away something that is an incentive for the 2.5 million people who have signed up to KiwiSaver? It does not make sense.Here is the challenge again—and David I do appreciate that you have not signed up. The tragedy for David Bennett is that he cannot sign up. He cannot sign up. The challenge to the other members of the Committee on the other side of the Chamber is that you have got $1000 but you are now denying every Kiwi who has not signed up to KiwiSaver. You got $1000 that at least 1.5 million Kiwis are not entitled to now. You do not have to David; you did not get it. If you on that side of the Chamber are quite happy to sit there and pass the “KRAP” pay the $1000 back. Give it back. That is essentially what you should do if you have got some honour and you want to pass this “KRAP”—give the $1000 back. It is the decent thing to do and it is the honourable thing to do. David Bennett—good on you.LOUISA WALL (Labour—Manurewa):Kia ora Mr Chair. Thank you very much for the opportunity to contribute to this Committee stage debate on the KiwiSaver Budget Measures Bill. I will talk about some alternative titles later but I just want to provide some context for this piece of legislation. We have 4.41 million people in New Zealand and of those 2350000 are enrolled in KiwiSaver. Of those people who are enrolled 352000 are zero to 17-year-olds. So actually our children have engaged in this process and are taking advantage of KiwiSaver because like us we want them to prepare for the future. Seventy-eight percent are not enrolled. That is 2.12 million people but within that cohort actually 338000 people have opted out. So this bill actually has relevance to 1.7 million New Zealanders—that is the 40 percent of New Zealanders who are not enrolled in KiwiSaver. I would like to highlight the fact that of those not enrolled New Zealanders who earn under $30000 are actually the most disadvantaged. They are the ones who have chosen not to opt into KiwiSaver presumably because of their circumstances.I want to take the opportunity to also highlight the Greens’ Supplementary Order Paper 81 which would retain the $1000 kick-start contribution for those holding a community services card. Why that cohort? Because actually that is the cohort of low to middle-income earners who are not engaging. So it is very much about ensuring that those who are not in the system have opportunities to participate. I have been looking at the Inland Revenue Department’s report Who is enrolling in KiwiSaver?. It is dated February 2015 and it was prepared by the KiwiSaver Evaluation Steering Group. Of most relevance to me is that of the New Zealanders who have chosen to enrol there are three enrolment types. The first enrolment type is people who enrol directly with a provider. So 40 percent of people who enrolled with KiwiSaver did so with a provider. Forty percent of people are automatically enrolled and 22 percent opt in.The rest of my speech is going to be focused on that particular cohort—the 40 percent of people who automatically enrol. These are 18 to 64-year-olds who are in new jobs with a new employer and where that job is either full-time permanent part-time or it has got some sense of longevity to it. Here are some of the titles that I think this bill should have actually. If you are auto-enrolled this bill could be the “KiwiSaver (If You Are Single and Aged Between 18 and 24 We Don’t Care About You) Bill” because it is that cohort that is automatically enrolled.This bill could also be called the “KiwiSaver (If You Are Māori and Pacific Islander You Are Not Our Priority) Bill” because again it is Māori and Pacific Islanders who automatically enrol. This could be the “KiwiSaver (If You Are Secondary School - Educated Hard Luck) Bill” because actually hard luck to you. You have got only a secondary school education so too bad; we are going to take this opportunity away from you.This could also be called the “KiwiSaver (If You Are Working in Lower White-Collar Positions Work Longer Hours to Feed Your Family) Bill”. How about we title it that? What about this one: the “KiwiSaver (If You Are Working in the Retail Trade and Accommodation Industry Get More Tips) Bill” because you have got to go and do things yourself. Obviously this Government does not care about you. Finally what about the “KiwiSaver (If You Are Earning $35000 or Less in Employment Income Be Grateful With What You Have Got) Bill”?From our perspective there is a lack of analysis of this piece of legislation in terms of whom this piece of legislation is going to hurt the most. This Government likes to stand on platitudes and talk about helping people out of hardship helping people to create a better life for themselves and their families. But this report actually proves that it does not care that this is all about saving money and that at the end of the day evidence like this which they have should have gone to whoever is responsible for inland revenue and you should know the impact of this piece of legislation on the specific New Zealanders who are now going to have these opportunities taken away from them. If you out there think—ANDREW BAYLY (National—Hunua):I move That the question be now put.The CHAIRPERSON (Hon Trevor Mallard): I call Jan Logie.JAN LOGIE (Green):Thank you Mr Chair that was a great decision. I am happy to take a call on the Committee stage of the so-called KiwiSaver Budget Measures Bill which as has already been well canvassed has very little meaning and conveys very little meaning to anyone.I have several alternative titles for this bill which I would like to explore in this Chamber. My first one is the “It’s Working So Let’s Fix It Bill” because actually we know that New Zealand has a massive problem with savings or a lack of savings. It has been much worse than what it is now. My colleague James Shaw has already mentioned that New Zealand is 22nd out of 24 countries in the OECD in terms of low levels of savings. So in international comparisons we have a real problem and this shows up quite significantly in our current account deficit. We have seen it over time in New Zealand. The Committee might be interested to know that household savings per capita in 1992 were $752 which is not particularly high. But you might be even more interested to know that in 2006 before KiwiSaver was brought in household savings per capita were negative $1359. We were in a crisis in terms of household debt at that point which is what triggered the introduction—I understand; I was not really involved at that time—of KiwiSaver. Now since we have had KiwiSaver the levels of household savings are up to $627 per capita so we are not even back to the point we were at in 1992.I have some ambivalence over KiwiSaver. I will admit that upfront because we live in such an incredibly unequal society where so many people are surviving well below the breadline in poverty. We know that a quarter of a million children are living in poverty and we know that so many workers the majority of whom are women Māori Pasifika and migrant workers are in precarious work living below that poverty line as well and that two out of five children living in poverty are in families who are working.So in that context KiwiSaver is a voluntary scheme—it would be even worse if it was a compulsory one. When people are struggling to put food on the table KiwiSaver actually exacerbates inequality in some ways because those who are earning the most are able to contribute the most and get more contributions from their employers so their KiwiSaver savings go up. That is good for our current account deficit that is good for our household capital accumulation but it is not necessarily good for addressing inequality.However this $1000 kick-start incentive actually is something that goes right across the board in terms of that universalism and is available to workers who cannot necessarily afford who cannot sacrifice food on the table to make weekly contributions for their future well-being. It is available to beneficiaries and the children of beneficiaries whom we want to have the chance to get a leg up. So choosing this mechanism to remove this is actually the worst possible thing that the Government could do in relation to KiwiSaver’s impact on addressing inequality.Another idea I had for this bill following on from the rather hilarious contribution I thought from the New Zealand First member who suggested this could be renamed the “OMG YOLO No Future Bill”—I had to be able to say that out loud; it was a pure moment in the Chamber for me. But I would suggest that another possibility for this title could be the “Boom—Your Incentive Is Gone Bill”. Sorry I did not manage to carry that off.Hon Member: Boom.JAN LOGIE: Boom—no I still cannot carry it off. But the point is real. This has come out of nowhere. I have heard from people just on my Facebook thread who were in the process—IAN McKELVIE (National—Rangitīkei):I move That the question be now put.The CHAIRPERSON (Hon Trevor Mallard): Yes I think there has been a reasonable amount of discussion on this and I think the Committee is in a position to decide whether or not it wants to put the question.A party votewas called for on the questionThat the question be now put.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Motion agreed to.The CHAIRPERSON (Hon Trevor Mallard): There have been I understand two amendments tabled. The first the amendment in the name of Iain Lees-Galloway on clause 1 to delete “Budget Measures” and replace it with “Cut Number 8” I am ruling out of order as not being a serious amendment or a serious title.IAIN LEES-GALLOWAY (Labour—Palmerston North):I raise a point of order Mr Chairperson.The CHAIRPERSON (Hon Trevor Mallard): The member is not going to dispute my ruling is he?IAIN LEES-GALLOWAY: I seek some clarification. Thank you Mr Chairperson I appreciate your hearing this point of order. I would like some clarification about why you believe that that is not a serious amendment to the title. I dedicated probably a good 4 minutes of the 5 minutes I was given—and I was prepared to give more—to the reasons behind why that was an appropriate title. It was not in any way frivolous. There was evidence behind it. I provided that evidence in the contribution that I made. In fact my colleague the Hon David Parker listed all eight of the cuts that that title amendment relates to in his speech on the first reading. It is not a frivolous contribution at all. It does relate to facts and evidence and I would appreciate a serious consideration of your ruling.The CHAIRPERSON (Hon Trevor Mallard): OK. I will be slightly liberal and not take this as a criticism or as an attempt to relitigate but I will point the member to Speakers’ ruling 116/6 where it makes it clear that an amendment to the title of a bill cannot be an attempt to criticise its contents. That is how—[Interruption] Mr Parker—I have interpreted this.Hon David Parker: Point of order Mr Chairperson.The CHAIRPERSON (Hon Trevor Mallard): I just want to make it absolutely clear to the member that he really has only one path now that is within the Standing Orders. I have made a ruling. That is not a ruling that I am able to reverse or to change. He does have only one course if he wants to change that.Hon DAVID PARKER (Labour):I raise a point of order Mr Chairperson. Yes—I am actually not seeking to overturn your ruling but I am seeking clarification of your earlier ruling when you said that you could not have a point of order in respect of your ruling. I suggest that that was wrong.The CHAIRPERSON (Hon Trevor Mallard): Well I can contemplate that and do not need to rule on it now. I have ruled that amendment out. I have another one that is even easier to rule on. It is one in the name of Clayton Mitchell which suggests that we delete the title and replace it with the following: “OMG YOLO #NOFUTURE”. I am going to rule that out as not being consistent with current parliamentary drafting standards.CLAYTON MITCHELL (NZ First):I raise a point of order Mr Chairperson. May I just speak to that ruling?The CHAIRPERSON (Hon Trevor Mallard): Well I just want to make it very clear that the member is not going to relitigate or criticise or attempt to have it changed because if he does he will be being disorderly. I think I have been pretty liberal with a couple of people on this side of the Chamber and I am unlikely to be liberal again.A party votewas called for on the questionThat clause 1 be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Clause 1 agreed to.Clause 2 CommencementThe CHAIRPERSON (Hon Trevor Mallard): Already we have on the Table an amendment from Fletcher Tabuteau one from Dr David Clark and one from Chris Hipkins.Hon DAVID PARKER (Labour):What a fair Chairman. It actually does speak well of the Chairman because I just had a wee confrontation with him and he is still big enough to call me so thank you Mr Chairman.I want to talk to the commencement date. The commencement date is expressed to be when the KiwiSaver Budget Measures Bill gets Royal assent but then there are two exceptions to that which are that particular parts of the bill once it receives Royal assent are of retrospective effect. I want to talk about why we need to take particular care in respect of commencement dates in respect of legislation that goes to raiding retirement schemes because the Government has got prior form on this. The National Party which forms the majority of this Government is the same party that raided the earlier retirement scheme under Muldoon. It killed off the Kirk scheme which would have had New Zealand in a similar position to Australia in terms of investment capital. In fact it was even earlier than the Australian scheme that followed it. It has killed off contributions to the Cullen fund. We have already seen that that has cost—Dr David Clark: $16 billion.Hon DAVID PARKER: —the Cullen fund $16 billion at current rates of return because of that folly. And now we have cuts to KiwiSaver particularly the $1000.As to the date you have got ask yourself this. The Government is doing this as of today in the name it says of child poverty. When do its child poverty measures kick in? On 1 April next year. The Government is saying that it is a compassionate Government because it recognises that there are many children many thousands of children living in severe poverty in New Zealand. It accepts that these children sometimes go without breakfast sometimes go without lunch at school sometimes go without shoes and can never pay their school fees or just about never. It accepts that we have serious hardship in New Zealand amongst children and that they need $25 a week—we think that is pretty miserly; our policy was $60 a week per child under 3—but it says $25 a week because their circumstances are so desperate that they need more money for breakfast.So those parents are going to go to their kids on Monday and they are going to say: “Next year you can have breakfast.” Look at their eyes down over there on the Government benches. One of the fundamental flaws relating to commencement dates in this total Budget package is that actually the Government acknowledges that there is a real and serious problem with child poverty now in New Zealand but it is not going to fix it until 1 April next year—and this in a wealthy country.But what will the Government do this year? This year it will kill the KiwiSaver kick-start payment effective as of Budget day. It is backwards. Not April next year. It will take that off people next year. You know that kick-start payment is deliberately progressive. The Labour Party designed it. We do things that are progressive. One thousand dollars to a low-income person is worth a lot more than $1000 to a high-income person partly because of their marginal tax rates and partly just because their income rate is lower. The progressive payment of $1000 per person is progressive. The Government takes that away today but the people whom it says are in poverty now do not get breakfast until next year. That sums up this Government.Hon Annette King: That’s how much they care.Hon DAVID PARKER: That is how much it cares. It cares not enough. We accept that $25 a week next year is better than not getting $25 a week next year. We said we would get $60 a week into the pockets of those kids in poor families per child for the first 3 years of their life from this year. But we did not win the election; National did. With the KiwiSaver kick-start payment we were actually going to spread it over 5 years as we got everyone into the scheme but we were not going to cut it.The commencement date of this legislation is worthy of note because it highlights the fact that the Government pretends that it is worried about these children living in poverty who cannot get breakfast this year but it is saying: “You won’t get it till next year.” I also want to return to the question of why it is that the bill has got a commencement date for reducing one of the incentives to KiwiSaver now when we have got a current account deficit that is blowing out we have got exports dropping—Dr DAVID CLARK (Labour—Dunedin North):I know that on the Government benches they were eager to hear my contribution so I shall not disappoint. I have put forward an amendment to the KiwiSaver Budget Measures Bill to ensure that this kick-start contribution is not withdrawn until 2018. That would allow a future Labour Government to make sure that the kick-start contribution continues as it is now.This is a Government that is determined to take from New Zealand’s future in order to pay for its mismanagement today. This is a Government with no plan. Those members opposite have got their heads down. They know that it is true. The Government is trying here to take $1000 off future generations—off half a million Kiwis in the next 4 years. That is what it is doing here with this bill. Make no mistake if you are watching this at home. It is taking $1000 off half a million Kiwis for their retirement savings because it has not managed the economy well because it has failed to get to surplus and because it is trying to make it look like it has not missed by too much. Actually the books are a billion dollars worse than they were at the last Budget. The Government is doing an appalling job of managing the economy. It has failed in good times to diversify the economy.My amendment would push out the date on which this legislation starts so that a Labour Government in the future could fix this before it actually takes effect. That is the effect of my amendment. If we look at how it stands now—and it is here in the explanatory note in the general policy statement at the front of the bill. People at home may not have this in front them but—Hon Members: Ha ha!Dr DAVID CLARK: Well they might—they might. There are some who will. But if they do not I will explain that what this bill attempts to do is enact retrospective legislation. When the Budget was announced at 2 p.m. on Thursday that was the cut-off point. If people had not signed up at that point they were not eligible to get the kick-start contribution any more. Why did the Government make that change retrospective? Why is it passing legislation now—after that time—that takes effect a few days ago? It is because it knows in its heart of hearts that this incentive works. It knows that if people really wanted to sign up to this programme just because it was so they would have done it anyway. That the incentive really matters is something that Government members try to deny but they know that if they made this change start a little later people would be rushing out there to sign up.There is also an amendment in the name of Chris Hipkins which I expect he will speak to on that front which allows for people who may be watching at home and saying “Gosh I wish I’d got that $1000.” to go out and sign up in the next few months. It is a sensible amendment. If the Government members really believed that that was not going to be the effect of this legislation if they really believed that $1000 would make no difference they would accept Chris Hipkin’s amendment and they would accept my amendment which allows for that $1000 to continue.My amendment is really targeted at the artificial surplus that the Government is creating because this is a Budget without vision. This Budget is one that fails to meet the Government’s promise of a surplus—the central promise of its last election campaign. This amendment says: “We will continue with this very good scheme until a future Labour Government can correct it.” That is why I am putting forward an amendment in clause 2 of the bill. As it currently stands it came into force as I said the moment the Budget was announced. We know that this will have an effect. We also know that the changes that the Government is proposing are going to cost taxpayers so we would obviate that cost with my amendment.The extra $210000 that the Government estimates currently that it would cost to change the Inland Revenue Department tax system in order to take this money away from future kids—$210000 to take the money away from future kids—would be avoided. Let us think about that. That is 210 kids’ starts in life—210—that are paid for just by avoiding this change. The Government spends the money frivolously on Government administration because it is scampering for the surplus. The bill was a panicked response. We know that and we have heard that in the previous debate because it is right there in the Government’s own departmental statements. It is important for the reason that it avoids costs to the Inland Revenue Department and by flow-on effect it avoids costs to the taxpayer. That $210000 can be avoided. I would think that members opposite would consider it to be important to take into account how New Zealand taxpayers’ money is spent.JAMES SHAW (Green):I would like to speak to the commencement date as outlined in clause 2 of the KiwiSaver Budget Measures Bill as well. I note that in my last call I asked Mr Woodhouse the Minister in the chair whether he would respond to a number of questions which he did not. One of them or in fact a couple of them relate directly to this clause which is the commencement date. What we know is that the Government has said that it wants to introduce this immediately and has taken the attitude that if you are not already currently enrolled in the scheme then the chances that you are ever going to get enrolled in the scheme are low to none and so what would be the harm in immediate commencement? We also know that there are people out there who have been thinking about it. We know from behavioural economics that there is a substantial tail of people for whom it is a complicated process and they would like to get round to it but they have not yet got round to it. The question is: why not just extend this out and have it commence at a later date in order to incentivise those who are currently not in the scheme but were kind of thinking about it to actually get into the scheme? Yes it would cost a little bit more money but if the intention here is to scoop up as many people as possible using the incentive then we ought to do that.I know that there are a number of amendments. There is David Clark’s amendment pushing the commencement date out to after the next election. There is also Fletcher Tabuteau’s amendment pushing it out by a couple of years. I take the Labour Party’s point—which I think is a valid one—that if you commence this bill immediately but not the rest of the hardship package until the beginning of the next financial year then there is a substantial gap there between the commencement of this cut and then the implementation of the benefit increases. Why not just line them up? Why not say: “Let’s commence this at the start of the next financial year.”? That gives people an incentive. If they are currently not in the scheme it says you have got 8 or 9 months to get yourself into the scheme. It makes perfect sense to do that and then after that the incentive will be gone. People will have had fair warning and at the same time you will have joined it up with the rest of your benefits package that you have been talking about.To me it makes perfect sense to do that. I have not yet heard anybody from the Government say anything about why it was chosen to have this immediate and retrospective commencement date and whether there was any consideration at all of any kind of zone where people who are currently not in the scheme could get into the scheme. I really would like a response to that. I notice that Simon Bridges has now taken the Government’s position in the chair and I have noted in previous debates that Mr Bridges has responded directly to these kinds of points so I would like to invite him to do so. I understand that the vote is going to go the way it is going to go but it would be nice to hear the Government’s reasoning in response to that point because I think it is a fair and valid one. Thank you.FLETCHER TABUTEAU (NZ First):Thank you—[Interruption] Thanks for the response on the other side of the Chamber. Thanks gentlemen. The whole premise of this legislation and the whole logic that we are given behind it in order to debate today is we are told that the $1000 kick-start contribution is no longer sufficient or actually it is unwarranted because it does not do enough to engage people into KiwiSaver people are not coming into KiwiSaver any more this $1000 contribution is not doing what we want it to and it is costing us too much money. That is the logic that this Government provides this Committee today and it is why we are debating this.On top of that the policy advice that we and the Government were given was actually to ignore the implications to saving in terms of the national interest for New Zealand. So do not look at that; just analyse why we should get rid of this KiwiSaver contribution because we need an excuse.My challenge—and I will not take all of my time because it is a simple challenge—to this Government is to consider the fact that based on the premise of your logic today you do not need retrospective legislation. You did not need to bring this in days ago. There is no reason for it under the premise of the logic that you have provided this Committee with today. Give New Zealanders time. You have put it out there publicly now. Give them time so that they can engage in their savings.We have heard such impassioned contributions and meaningful contributions from this side of the Chamber about who is missing out and so that I focus on this clause solely I will just repeat that it was said. I will not go into the detail again. But let us use another piece of logic. Let us line up the changes in legislation which is what the two Supplementary Order Papers have suggested. Let us line them up. We are bringing these welfare changes in in a couple of years. Let us give New Zealanders the same opportunity to react. Let us give them time to understand that now is the time to get into their KiwiSaver programme. I know that it was cynically asked how we get New Zealanders into KiwiSaver. Well my cynical response will be that this Government will make it compulsory. Do not do that. Give them a real reason. Give them that incentive that our youth need. Let us even up the playing field. There is no need under the logic provided by the Government to this Committee. The very reason for this debate is that it is no longer an incentive. Well let us bring it in just before the election and let the Government members stand in front of the public and say to them “We are taking away your KiwiSaver.” when it is fresh in the public’s mind. Thank you.CHRIS HIPKINS (Labour—Rimutaka):I am very pleased to speak to the amendment to clause 2 of the KiwiSaver Budget Measures Bill that I have put forward which would move the commencement date of the main part of this legislation from 21 May 2015—Budget day—through to 21 June 2015. It would give people who have not had the opportunity to take up the kick-start just over a month to do so.In speaking to this amendment I want to particularly address my comments to the five new National members on the other side of the House. Those five National members all campaigned under the same slogan which was that they promised to be “the strong voice for [insert electorate name here] in John Key’s National Government”. They had advertisements up and down the country and on their cars campaigning.Chris Bishop: And a fresh face.CHRIS HIPKINS: Chris Bishop has still got one in the basement with the slogan on it. It sits in the basement now because he has given up. The slogan was to be “a strong voice in John Key’s National Government”. Well let us hear it. Let us hear that strong voice. Let us hear them stand up and say why they think that the Kiwis who have not yet signed up to KiwiSaver should not get the $1000 kick-start. Let us hear them stand up and explain why this legislation needs to be retrospectively backdated to stop Kiwis who have not signed up from being able to get the $1000 kick-start.The amendment that I have put forward would give them a month to do so and if the Government thinks that this is an unfair advantage then say so. Let us hear it. Let us hear those members say it because let us actually think about the practical implications of this. If somebody on Thursday—it is still Thursday in the House today according to the rules of the House. So if somebody today under the rules of the House—which was actually Thursday in the real world—went out in their lunch break and signed up for KiwiSaver at 1.30 p.m. then they would get $1000 for doing so. But if somebody signed up right now before this bill has even finished its passage through the House they would not get that $1000. We are talking about a matter of an hour. How is that fair? I am happy to hear from anyone from the Government about how they think that is fair. It is not—it is not. If the Government really believed in this change and it really thought that this was necessary it would at least give the New Zealanders who have not had the chance to sign up the opportunity to do so.Here is another example and another reason why Kiwis should be given extra time to take up the measure and why my amendment is well and truly justified. If a child is born into a family earning a middle or higher income or has been born in that family in say the last 6 months to a year and their parents took up the opportunity to sign them up to KiwiSaver then they are going to get the $1000. On the other hand somebody who has been working their way up in a minimum wage job to get themselves to the point—and they may have just got to that point around about now—where they can finally afford to sign up to KiwiSaver is not going to get it.This reinforces inequality in the system. It says to somebody that if they have had the good fortune in the last few years to have been born into a family who could afford to sign them up to KiwiSaver right when they were born they are going to get an advantage. Compare that with someone who is working really hard and is potentially at the point now where they can finally sign up to KiwiSaver; they could have been working towards it. They are not going to get the $1000 kick-start that somebody who has had the good fortune to be born into a family who could afford it is going to get. That is unfair. So why not give those people who are on low incomes who have been delaying signing up into KiwiSaver until they were in a financial position to do so—why not give them a month?David Bennett: What about the next generation of low-income earners? What a stupid speech.CHRIS HIPKINS: Why not just give them a year to actually see whether they can make it across that hurdle? Why not be fair? David Bennett says it is not fair. David Bennett is about the only member on that side of the House whom I am willing to hear criticism from on KiwiSaver because he is one of the only people on the other side of the House who has not actually signed up to KiwiSaver. As my colleague Kris Faafoi pointed out he is either very principled or very stupid—probably the latter. But—David Bennett: I raise a point of order Mr Chairperson. From an inane member like that I am not accepting that comment—The CHAIRPERSON (Hon Trevor Mallard): Order! The member will sit down. First of all the member is going to withdraw and apologise for being disorderly during his point of order. When he has done that he will have one chance to raise a proper point of order.David Bennett: No it’s OK.The CHAIRPERSON (Hon Trevor Mallard): Well you are going to withdraw and apologise anyway.David Bennett: I withdraw and apologise but I ask that member to withdraw and apologise as well.The CHAIRPERSON (Hon Trevor Mallard): You have now got your last chance if you want to stay in the House to withdraw and apologise with nothing else.David Bennett: I withdraw and apologise.CHRIS HIPKINS: Thank you very much Mr Chair. I am happy to wrap up this contribution on my amendment although I might have a little bit more time to go but we will see how we go.I want to speak to another reason why this amendment that I have put forward should be adopted by the House. I want to say as matter of principle that I would rather David Clark’s amendment be passed. It pushes this commencement date out beyond the next election so that New Zealanders can actually have a say on it because this was not a change foreshadowed by National at the last election and New Zealanders should have the opportunity to vote on it. But if the Government is not of a mind to support that I hope that it will support my amendment. If the Government members were genuine in the contributions that they made—DAVID SHEARER (Labour—Mt Albert):I rise to support Chris Hipkins’ amendment because as he said the current commencement date is not fair. But what I would like to say is that I think it is probably even fairer to push that date as David Clark’s amendment proposes right through to beyond the election so that it is actually an election issue.Let us face it in Budgets gone by with the old Budgets in the past people used to go out in the evening of the day before and fill up their cars with petrol because they thought that the price of petrol was going to go up. This Government has the practice of cutting a clause out of KiwiSaver in every single Budget so that it undermines the very premise on which this scheme is running.Two and a half million people have signed up for KiwiSaver—2.5 million people. It is an outstanding success and why are those people signing up? Well according to the Inland Revenue Department—and the department has done an extensive number of surveys on this—65 percent of the people who sign up for KiwiSaver do so to collect the $1000 kick-start. So now you have just moved that out of the way on top of all of the other cuts that have been made over the years by this Government and what we are seeing is sort of like a chair that has had one leg cut off and has then had another leg cut off. Slowly but surely this Government is wanting to see how long it is going to be before KiwiSaver just completely collapses and falls over and New Zealanders lose confidence in it.If there is one thing that I believe changing the commencement clause will do it is that it will give people the ability to be able to say whether or not they want to keep this kick-start and that would enable them—before the next election according to the amendment that David Clark is putting forward—to make a fair and true decision on whether they want that $1000 or not. I would say that just about everybody of course will want it and they will want it not only for the dollar value that it represents but also for the fact that it represents our continuing to maintain the integrity of a scheme that is important over time.We go into a superannuation scheme—as with this scheme in the past but now people will not have the opportunity to do this any more—on the understanding that there is going to be a nest egg at the end and that the incentives for us to put our money into that scheme for that nest egg are going to be there. But we have had at least six different cuts made to KiwiSaver in the course of this Government. It has cut for example the minimum member contribution—that was in 2009. It has cut the member fee subsidy—that was in April 2009. It has cut the compulsory employer contributions. It has cut the employer tax credit to disincentivise employers to put money into it. It has cut the member—Tim Macindoe: I raise a point of order Mr Chairperson. I raise this point of order under Speaker’s ruling 114/7. I have been listening to this member for some time. We are on a very narrow commencement clause of this particular bill and this member is straying far from that. He needs to either come back to the commencement date or cease his call.The CHAIRPERSON (Hon Trevor Mallard): Sorry could you tell me the Speaker’s ruling?Tim Macindoe: It is Speaker’s ruling 114/7. It is the ruling of Rick Barker when he was the Chairperson.The CHAIRPERSON (Hon Trevor Mallard): That is a question of relevance and relevance is a question that is decided by the Chair not by a point of order. I might say though that I had come to that conclusion myself already and probably would have taken it into account as to the length of the debate. I was going to warn the next speaker that we are now talking about the date on which this bill comes into force. It is not a general debate on it.DAVID SHEARER: Just to make that completely relevant all of those cuts that I was talking about happened without warning. They all happened without warning. They all cut a scheme that people had confidence in and that is why it is so important and so fair to ensure that the commencement date is out into the future so that at least people out there can make a decision that is informed that is fair as to whether or not they want to join this scheme. If we do not do that the insidious erosion of confidence in KiwiSaver will continue to occur.That is why I agree in order of priority with David Clark’s amendment and then Chris Hipkins’ amendment. Both of those amendments propose the commencement of this bill in the future rather than having it imposed upon us retrospectively so that people who had been thinking about getting into KiwiSaver toying with the idea of doing it are now no longer able to enjoy the benefits of the $1000 that would have been put into it.This is I believe an undermining of a fabulous scheme. It was put in by the Labour Government. I agree that this Government has taken it and cut it and cut it and cut it. This bill is another example of that cut.CLAYTON MITCHELL (NZ First):I rise to take a call on clause 2 of this bill the KiwiSaver Budget Measures Bill. I think there are some Supplementary Order Papers on the Table that are fair and reasonable. Let us be honest. What we are asking with these Supplementary Order Papers in particular is for National to keep it real. Keep it real for New Zealanders about what you are actually doing here. You are quick off the hip when it comes to making legislative changes and very very slow to give back those changes. What we are asking—and I spoke to this earlier on in my comments—is to think about those people and give them enough time to go in and register for KiwiSaver. It is not unfair or unreasonable to ask that. I would certainly like to get the words from the Minister. You will be pleased to see Mr Chair that I am wearing my pink tie. I am impervious to insult and injury today because of course this is my bully-proof suit so I look forward to hearing from Simon Bridges the Minister in the chair.However I would like to say that being fair and reasonable is absolutely what this Government should be. Does it stand scrutiny? What the Government is doing is taking it away so quickly that it is ripping the carpet out from underneath the feet of those New Zealanders who need to be looked out for. The Government is dressing it up and putting a bow around it but in actual fact it is just putting lipstick on a pig. This does not fit in with what National says is standing up and being a voice for New Zealanders.David Bennett: This is another transgender comment is it?CLAYTON MITCHELL: Apart from the absolute brain constipation that I get from the verbal diarrhoea from the other side of the Chamber from time to time—and I am specifically talking to you Mr Bennett—we need to make sure that we are giving the people of New Zealand enough time to react to this quick-off-the-hip legislative change.We have got Supplementary Order Paper 85 from my colleague Mr Fletcher Tabuteau which makes sense—it absolutely makes sense. It is common sense to give people at least 2 years—2 years—to make some changes in order to get themselves into that scheme. In fact we got it from Labour and we got it from the Greens as well to narrow it down—even to 1 year would be acceptable and we would support that. Goodness me we would support 90 days if this Government saw the sense in what that would do. You need to give the people of New Zealand some time to get in and get adjusted to this legislation which is being force-fed down our throats.We are in urgency at the moment on a Saturday morning and I am sure there are many many people at home who are absolutely riveted to this. Watching this debate is like watching an All Blacks test match.Hon Member: It’s afternoon.CLAYTON MITCHELL: It is afternoon already. Goodness me! It feels like I have just arrived. You know when I look at the indebtedness of this country as of Tuesday it was $19511 per New Zealander and it has now gone up to about $20000 per New Zealander. That is more indebtedness than Kaipara District Council had at $10500 per head of population which sent it to the wall. Now all of a sudden under this legislation you are taking more money away from New Zealanders making it harder for that debt to be repaid for our future.New Zealand’s future is at serious risk. We spoke about the curve of having an aged population a very skinny working population and a very large and growing young population which we are going to have to manage and maintain through schemes such as KiwiSaver. With the kick-start programme 66 percent of people signed up to KiwiSaver because of that $1000 kick-start—many many people. I was fortunate enough to sign up to an AMP life insurance whole-of-life policy when I was 19 years old because it made sense and because there was nothing else that the Government was going to offer us back then.The CHAIRPERSON (Hon Trevor Mallard): I am going to invite the member to come back to the clause.CLAYTON MITCHELL: I am going to come back to the time—Tim Macindoe: The member also needs to explain how this will stop us repaying debt. It seems to be his argument but it makes no sense at all.CLAYTON MITCHELL: Righty-o. The reason why we suggested the name change for the bill of “#nofuture” is that this is the time. If we do not start thinking about the future of our constituents of the people of New Zealand time will be running out so I absolutely think that this Government should be supporting giving those people a longer period of time to sign themselves up to KiwiSaver. To say retrospectively that last Thursday was the cut-off point is absolutely wrong. I would love to hear from Minister Simon Bridges to see how he can justify that. He is nodding his head in agreement. It sounds like he might take a call. We would certainly like to hear from him. Just remember I have my bully-proof suit and pink tie on today so hit me with all of your best insults. Thank you.ADRIAN RURAWHE (Labour—Te Tai Hauāuru):In speaking to the commencement clause if I were to choose a date I would choose 5 August 2016 as the commencement date of this bill. I would do that because it would be a continuation of the legacy set in the 1970s—on 5 August 1976. Next year will be the 40th anniversary of the Government of the Rt Hon Robert Muldoon withdrawing the then-current superannuation scheme. To make further comparisons to that legacy the Rt Hon Robert Muldoon said that that superannuation scheme was turning New Zealand into a Soviet clone. The comparison is that the Prime Minister John Key has said that KiwiSaver was “communism by stealth”. So here is a really tight comparison between that Government then and the Government now and the legacy that the National Government continues today by trying to push through this legislation under urgency.There was an article written in the New Zealand Herald before the 2008 election that warned the National Party not to go down the same path. Well the genius of KiwiSaver put in place by the Labour Government under Michael Cullen was that it has taken this Government eight attempts over 7 years to try to get rid of KiwiSaver. The article I refer to ends with the words: “It would be a tragedy if a new National Government under Key and English made the same dreadful mistake as Muldoon in December 1975.” The Government has made that mistake over the last 7 years by making eight cuts to the scheme. So the commencement ought to be on that anniversary to commemorate the 40 years since the National Government cut that superannuation scheme and denied our country of having a fund of $280 billion for a future for our children.This piece of legislation as has already been stated steals from future generations. Well I am part of the generation that that act of Robert Muldoon stole from—my generation and future generations—and the National Government is continuing to enhance that legacy. It is wrong.I oppose this bill in its entirety but I suggest that the commencement date ought to be 5 August 2016 to give ordinary New Zealanders the opportunity to have the same benefits that members opposite have had and that the whole of New Zealand ought to be able to have as well. That is my contribution to this part of the bill. Thank you.DAVID BENNETT (National—Hamilton East):I move That the question be now put.Hon DAVID CUNLIFFE (Labour—New Lynn):It is my pleasure to take the first of what I hope will be a series of calls on this important bill which is going to be bad for New Zealanders bad for the New Zealand economy and actually bad for our financial and saving institutions as well.As you know we are in the technical part of the debate here where we are going clause by clause. I want to begin by offering some fairly narrow comments on the commencement date itself. This is an example of misplaced use of a retrospective commencement date. It is actually quite a confused clause in itself because clause 2(1) says that the Act will come into force on the day on which it receives the Royal assent—but no date is provided breaching what is a longstanding good-practice convention upheld by Parliament in its Regulations Review Committee. In clause 2(2) however it says that “Section 4”—the operative section—“is treated as coming into force on 1 May 2015.” Given that that is prior to today that ensures a retrospective effect. That means that a young Kiwi who today hears that this door is closing cannot now join KiwiSaver. It is too late because Parliament if it passes this bill will deem that the door shut nearly 3 weeks ago. This is a retrospective instrument.Why would you do that? Or why would the Government do that when the argument that it has ostensibly for trying to take away the $1000 kick-start contribution is that not enough people have joined the scheme and not enough people have saved? That is its argument. Of course it is a fallacy but that is what the Government is trying to convince New Zealanders of. If the Government set as my colleague Chris Hipkins has suggested a future close-off date there would be a very strong incentive for anyone who is not currently a member of the scheme to join it. That would be a very good thing and it would support the very objectives that the Government has said it espouses. It would encourage people to join the scheme and to save more particularly those vulnerable or low-income people who to date have been the slowest to join. So setting a retrospective close-off prevents people joining and prevents the very objective that the Government says it holds.Even better would of course be my colleague David Clark’s amendment which is that the commencement date be deferred until after the coming election. Then it would never happen because the chances of the Government getting returned have got to be very very low. But in principle that would be a better option because New Zealanders would have the opportunity to vote based on the information that the Government has given to them only after the election. The National Party did not campaign on stealing back the KiwiSaver kick-start contribution. Not one word was said about its eighth attempt to gut KiwiSaver. Not one mention was made of Robert David Muldoon wrecking the last Labour-led savings scheme which if we had kept we would be a country as rich as Australia now. This is classic National Party “short-termism”.Why has the Government got this commencement date? It is relying on a very late-to-the-piece evaluation by the Inland Revenue Department that was released concurrently with this bill—i.e. it has had no opportunity for peer review or public criticism. It has simply been fed into this retrospective measure. It is a very very interesting piece of analysis because it frames the question up front away from the broader objectives that the KiwiSaver scheme has had from its inception. Those objectives were really three-way: firstly to help all New Zealanders save and save more for their retirement and their general financial well-being; and secondly to strengthen our domestic financial institutions so we have sticky local capital that we can invest in Kiwi businesses and Kiwi jobs.Members opposite are not focused on the debate; they are focused on the gallery. That is a very interesting thing because this is a very—The CHAIRPERSON (Hon Trevor Mallard): Order!Hon DAVID CUNLIFFE: —far-reaching measure that affects millions of New Zealanders. It affects millions of New Zealanders.The third objective for KiwiSaver has always been to improve New Zealand’s net savings position so that we reduce the current account deficit strengthen our total balance sheet and fit New Zealand for the future. And what is really interesting in the Inland Revenue Department’s analysis is that it has completely ignored 2½ of those three goals. It has ignored the broad fiscal savings gap issue and the current account deficit that flows from it. It has ignored the issues around the health of our financial institutions and our ability to invest in our own future.BRETT HUDSON (National):I move That the question be now put.The CHAIRPERSON (Hon Trevor Mallard): Yes I think it is fair to say that we have had some repetition—quite a lot of repetition—and some irrelevance. I think some of the arguments have been elegant but it has been a while since we have had anything new. The Committee can decide whether or not it wants to move on to the next clause.A party votewas called for on the questionThat the question be now put.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Motion agreed to.The question was put that the amendment set out on Supplementary Order Paper 85 in the name of Fletcher Tabuteau to clause 2 be agreed to.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the following amendment in the name of Dr David Clark to clause 2 be agreed to:replace this clause with the following new clause:2CommencementThis Act comes into force on 1 May 2018.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the following amendment in the name of Chris Hipkins to clause 2 be agreed to:in subclause (3) replace “at 2 pm on 21 May 2015” with “on 21 June 2015”.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.A party votewas called for on the questionThat clause 2 be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Clause 2 agreed to.Clause 3 Principal Act amendedDr DAVID CLARK (Labour—Dunedin North):This is a clause that refers to the principal Act and to amending the principal Act. I have a very short story that I wish to share with the Committee which illustrates the benefit of not amending this Act but instead of attaching the legislation to another Act. It is a story that some will know and that some will not know. It is the story of Nasrudin.Nasrudin was caught in the act and sentenced to die. Hauled up before the king he was asked by the royal presence: “Is there any reason at all why I shouldn’t have your head off right now?”. To which he replied: “Oh king live for ever. I know that I the mullah Nasrudin am the greatest teacher in your kingdom and it would surely be a waste to kill such a great teacher. So skilled am I that I could even teach your favourite horse to sing given a year to work on it.” The king was amused and said: “Very well then you move into the stable immediately and if the horse isn’t singing a year from now we’ll think of something interesting to do with you.” The story concludes that as he was returning to his cell to pick up his spare rags his cellmate remonstrated: “Now that was a very stupid promise. You know that you can’t teach that horse to sing no matter how long you try.” Nasrudin responded: “Not at all. I have a year now that I didn’t have before and a lot of things can happen in a year. The king might die. The horse might die. I might die. And who knows maybe the horse will sing.” That is a story—The CHAIRPERSON (Lindsay Tisch): Order! [Interruption] Order! We have had 2 minutes of something that is completely unrelated to the bill. I will ask the member to focus on the clause before the Committee in future debates. This is clause 3. It is a very narrow debate this part on clause 3 so I now ask the member to continue on clause 3.Dr DAVID CLARK: Point of order Mr Chairperson.The CHAIRPERSON (Lindsay Tisch): No I have ruled. I am waiting for you to continue.Dr DAVID CLARK: I will continue to speak to the principal Act amendment by saying that the story that I have just told illustrates clearly the benefit of not amending this principal Act and of amending another Act.For example the estimates—what if we amended the estimates? That debate is still to be had. We have not had that debate yet. There are plenty of other debates that will be had this year in the House. If this legislation was amending those Acts if the legislation was jiggered around so that it could fit into another Act it would wait to be passed and we would not be passing it under urgency today without input from the public and without the opportunity to speak about why this deprives New Zealanders—half a million New Zealanders the Government tells us—of the opportunity to get the $1000 kick-start payment. That is why it is important to wait. Many things could happen if we amended this legislation in another way and allowed an opportunity for the public to comment. The Government might be persuaded. It might hear the logic that has been espoused in this House. No doubt there will be more that the public can add. That is why we have the select committee process. In the short time we have had we have already heard from some stakeholders who have launched press releases to the public—for example the Financial Services Council has said that this legislation is like robbing the kids’ piggy banks and heading down to the pub for one more beer.Many members of the public will have their own wisdom to bring to the table. They may bring their own version of the story of Nasrudin. What we do know is that when we have measured processes through this House we get valuable input from the public. So by changing the principal Act that is to be amended to a different Act that is to be debated in this parliamentary Chamber later we provide more opportunity for people to engage with the debate and for this crazy change to be pushed out to another time. Who knows—the Prime Minister may step aside. We know that he is increasingly out of touch with New Zealanders and there are movements within his own Cabinet. So many many things can happen and that is why if we do not amend this principal Act in this way but choose to attach it to another Act additional time will benefit us all.Firstly let us examine what would happen if we did not amend this Act—if we actually left this entire clause out. What would happen if we left this entire clause out? That is an interesting question. What happens if you leave the entire clause out of the bill is that the legislation does not make sense any more. On this side of the Committee we would argue that it never made sense anyway but that is a debating point. We do not particularly like what is being rammed through here under urgency. But actually if you did not amend the principal Act the KiwiSaver Act 2006—an Act that was designed to increase savings and an Act that we have been told in the debate has increased savings by an estimated 36 percent according the Inland Revenue Department’s own research on the effect of the KiwiSaver Act 2006 which is referred to in this clause—we would continue we imagine to attract savers at a rate of additionality that is similar to the 36 percent reported by the Inland Revenue Department in its extensive review of the effects of this particular legislation.It said that its estimate was about 36 percent in 2010 and that that had not changed significantly in 2013. So what it is saying there is that this Act increases savings for New Zealanders. It actually changes the savings culture. If you did not put this clause in here—if this clause was not in here and this Act was not amended—then that 36 percent would not be lost and New Zealanders would continue to save at a rate superior to the rate that they were saving before the KiwiSaver Act 2006 was introduced. That is why I think it is important that we just leave this clause out. I would be in favour of that. I would be interested to see what the Government members say—whether they think that this clause should be left out or not. I am sure that Dr Nick Smith the Minister in the chair will have a view on that—he has a view on most things—unless he is so ashamed of this legislation that he does not wish to speak to this particular clause.Hon Gerry Brownlee: Like the member. I’m confounded that the member hasn’t been on one of those quiz shows. He knows so much about everything.Dr DAVID CLARK: That is very flattering Mr Brownlee—very flattering Mr Brownlee. I would enjoy being on a quiz show with Mr Brownlee because I do find Mr Brownlee entertaining at least. Although Mr Brownlee may not bring much substance to this particular debate he is an entertaining member of the House and so I would welcome the opportunity to be on a quiz show with him. I do not know—perhaps he can suggest some shows. He is quick on his feet. We should have a debate about what show that might be.I will return to the matter at hand although I look forward to Mr Brownlee’s contribution shortly because I expect he will want to defend this clause.Hon Gerry Brownlee: I have spoken and you should consider it the last word.Dr DAVID CLARK: Mr Brownlee says that his speech should be considered the last word. If that is not a sign of a Government that is out of touch and that has lost touch with the people of New Zealand then I do not think anything is. That is the kind of wisdom that Mr Brownlee brings to this Chamber—his word is the last word he is the Leader of the House. That is the reason that this legislation is going through under urgency because he says his word is the last word New Zealanders be damned. Anyone who objects to this should not have the opportunity to participate in the parliamentary debate. That is the kind of Government that we have opposite. That is the kind of Government we are staring down today as we protest against the changes that are proposed in this bill which over the next 4 years will rob half a million New Zealanders of that $1000 that every single National MP has taken advantage of. Not one of them will stand up and say that they have not taken advantage of it. That is what we are facing here in this Committee. I think that is very very much a lesson to those at home.Mr Smith is putting up his hand to speak. I look forward to his contribution after this because he is a man who might set that record straight. He might say that many National MPs have not taken up that $1000. He might say that he has not lined up his own family to take advantage of it. Who knows? We will see. We have certainly heard from one member of this House who has confessed that he and his family have taken it up and now they are cutting it off for everyone else.This is a Government that is out of ideas. It has failed to produce a surplus. And here we have—The CHAIRPERSON (Lindsay Tisch): Order! Come back.Dr DAVID CLARK: Yes coming back to the point Mr Chair and you are quite rightly bringing me back to the point of the matter. I was feeling quite passionate.If we left out clause 3 the bill would not amend the KiwiSaver Act and New Zealanders would continue to save at that additional rate that the Inland Revenue Department recommends of 36 percent and the savings of New Zealand would continue to be superior to what they were before the Act was introduced. That is why I think clause 3 should be left out of this bill. I do think that would make a difference for New Zealand in the longer term. It would encourage the savings culture that this Labour KiwiSaver Act brought into place. It would be a disappointment to the Government of course because it is more concerned with its sham surplus which it cannot achieve anyway and filling the billion-dollar black hole in its Budget which its economic mismanagement has opened up over the last year.KRIS FAAFOI (Labour—Mana):To speak to clause 3 of this bill: it is a very narrow debate and it does focus around the Act that this bill amends the KiwiSaver Act 2006. I think it would be useful to look at the purpose of that Act if I can have some time from the Chair to read that out because I think what we may have here as a situation is where what is being amended in this bill does not necessarily match with the purpose set out in the principal Act. If I can quote from the purpose section of the KiwiSaver Act 2006 which reads: “(1) The purpose of this Act is to encourage a long-term savings habit and asset accumulation by individuals who are not in a position to enjoy standards of living in retirement similar to those in pre-retirement. The Act aims to increase individuals’ well-being and financial independence particularly in retirement and to provide retirement benefits.” As I said that is the purpose as set out in the KiwiSaver Act 2006. The main function of the bill in front of us now is to remove the $1000 kick-start payment to anyone who wants to join KiwiSaver. One of the arguments on this side of the Chamber around the amendments to the KiwiSaver Act 2006 is that it will no longer allow youngsters to sign up to KiwiSaver and get that $1000 kick-start—Hon Ruth Dyson: From when? From next week?KRIS FAAFOI: Not from next week but backdated to 2 p.m. on 21 May. I would like to ask the Minister in the chair how taking away that $1000 kick-start matches with encouraging “a long-term savings habit and asset accumulation by individuals”. Because I do not think what the Government is doing in this bill and the purpose of the principal Act being amended match up. KiwiSaver was set up by Dr Cullen in the last Labour Government to do as the purpose says—to encourage long-term savings. Not by people of age but across the range and as has been said in this Chamber many people have taken up that opportunity. The $1000 kick-start was seen as one of those cherries for people to sign up. But as of 2 p.m. on Thursday 21 May 2015 as is amended in this bill Kiwis will no longer be able to do that. One of the Supplementary Order Papers that I have to clause 5 is to amend the bill in its current form—The CHAIRPERSON (Lindsay Tisch): We are not on clause 5.KRIS FAAFOI: —but which will change obviously this KiwiSaver Act 2006 to continue to encourage that long-term savings habit that is set out in this piece of legislation. I would ask the Minister in the chair—and I do appreciate that he has taken some calls before—to try to explain to those at home who might have young children as to why before 21 May at 2 p.m. it was a good incentive for them to sign their children up to KiwiSaver with a $1000 kick-start but now it is not. Or is this simply a measure to raise revenue to use for other things? Because that is what this seems like because the principal Act as it stands is pretty clear about what the purpose is and what the Government of that day was trying to achieve. That is long-term savings habits. I would think that starting saving from birth until 65 is pretty long-term. But now this Government is taking away the ability for Kiwi families to do that.On my Facebook site over the lunch break people have commented about how it was a really good thing that when we had a child the $1000 incentive was there to make it an even better incentive to join up to KiwiSaver. But now under the amendment of the KiwiSaver Act 2006 that is no longer there. I want to know from this Government why it does not think it is a good thing for Kiwi parents to start their kids saving from the very earliest of ages. Because that is essentially what this is doing. Many parents have taken up the opportunity to get their kids started almost from birth and this Government is taking that opportunity from them.GRANT ROBERTSON (Labour—Wellington Central):Thank you very much Mr Chair.Hon Gerry Brownlee: I want to hear more from David Clark.GRANT ROBERTSON: Look I agree with Mr Brownlee. We all want to hear more from Dr David Clark. The really good news for Mr Brownlee is he is going to get numerous opportunities to hear from Dr David Clark over the coming hours in this Chamber. I am sure Gerry Brownlee will hang on every single word that comes from Dr David Clark. I want to speak to clause 3 of this bill.Hon Ruth Dyson: That’s good because that’s what we’re debating.GRANT ROBERTSON: That is right. That is my first key performance indicator for the day ticked off: I am on the right clause. The reason I want to take a call on clause 3—Hon Gerry Brownlee: Come clean and tell us you know nothing about it.GRANT ROBERTSON: Oh I see; here we go. Mr Brownlee asked whether I know anything about clause 3. We will read it out slowly for the Leader of the House: “Principal Act amended—This Act amends the KiwiSaver Act 2006.” There are four numbers in a row. You will recognise the 2 then two 0s and a 6. If you put them all together in one that is 2006. That is in clause 3 of the bill. There will be many thousands of New Zealanders hanging off this debate watching it on television and listening to it on the radio who will be asking why it is—Hon Gerry Brownlee: Wondering why you’re wasting time.GRANT ROBERTSON: Ah! Mr Brownlee says he is wondering why we are wasting time. There is only one person in this Chamber who can explain—and that is Gerry Brownlee—why it is that he is overseeing a piece of legislation coming into this Chamber that retrospectively takes away people’s rights. It retrospectively takes away $1000 rips it out of their pockets. Gerry Brownlee can explain that. He is the one wasting the time and money of New Zealanders by having us here in this Chamber. So clause 3—Hon Gerry Brownlee: Will Labour undo this?GRANT ROBERTSON: Oh yeah! Oh yeah! We have been there; we have been there Gerry because we believe in savings. We believe that every New Zealander should actually have a right to savings. Every New Zealander should have the ability to put something away for the future—not just Gerry Brownlee’s rich mates but young people and people from low-income backgrounds. They should all have the opportunity but Gerry Brownlee wants to take that away. He wants to make KiwiSaver only for the people who can walk in on the first day and say: “I can do KiwiSaver off the bat; I know I have got enough money.” It is the people who would not have saved before this incentive came in whom Gerry Brownlee does not want to have in KiwiSaver. [Interruption]Responding to those interjections I want to return to clause 3. There will be people out there watching and listening who are wondering why it is that in each bill—Ron Mark: Oh they’re glued to the television!GRANT ROBERTSON: —they are; they will be glued to this—that comes before the House the principal Act is named in a clause on its own. It does seem a little unusual to have a clause that simply says: “This Act amends the KiwiSaver Act 2006.” The reason that clauses like that are put in legislation is that people will look at an amendment bill like this and ask: “What are they doing? Why on earth are they putting this measure up?”. It refers people back to the KiwiSaver Act 2006 to enable them to understand what it is that is being amended here.You would look at this piece of legislation and you would wonder why on earth someone would introduce legislation to take the incentive away from being part of the scheme. That is what the KiwiSaver Act 2006 is about: “The purpose of this Act is to encourage a long-term savings habit and asset accumulation by individuals who are not”—here is the one for Mr Brownlee—“in a position to enjoy standards of living in retirement similar to those in pre-retirement.” It is very important to have clause 3 in the bill because it refers people back to the actual purpose of KiwiSaver. If they were looking at just this amendment bill they would be confused. They would think: “Well KiwiSaver is a scheme just for people who can afford to get into it. We do not need to have any incentives for people to get into KiwiSaver.”When we were sitting in the Budget lock-up in a sort of airless room downstairs on Thursday we read this and we thought: “This is ridiculous. This is taking away the incentives that are in the KiwiSaver Act 2006.” And then we saw the retrospectivity. Why would you make it retrospective? Why would you do that? You do it because you know that this is a good incentive. It has been made retrospective because if the Government waited before putting this legislation through thousands of people would sign up to KiwiSaver. Is that not the point? Is that not the very point? The reason the Government is doing this retrospectively is that it knows that this is a good incentive that it is actually a useful part of the scheme. The bill amends the KiwiSaver Act 2006 in a way that actually in my opinion undermines the purpose.Paul Foster-Bell: What’s in it for Gene Simmons?GRANT ROBERTSON: Paul Foster-Bell I have to say would probably look better in Gene Simmons’ make up than he does at the moment. He is clearly a long-term fan of glam rock. We on this side of the Chamber can all see that. Actually to be honest I think Paul Foster-Bell is a bit more Gene Pitney than he is Gene Simmons. [Interruption] No Mr Foster-Bell if you want to be Richard Simmons you need to get to the gym a bit more often OK?Hon Member: Oh that’s unnecessary.GRANT ROBERTSON: That is what he just called me by the way. Where were we before I was so rudely interrupted?The CHAIRPERSON (Lindsay Tisch): Clause 3.GRANT ROBERTSON: That is right—clause 3 of the bill. That is right. As you Mr Chair indicate by your hand movements clause 3 is a very small clause that is about naming the Act that is being amended here.I think it is very important for all members of the Committee to consider again what the purpose of the KiwiSaver Act 2006 is. When KiwiSaver was brought in National Party members never liked it. They never liked it because it reminded them of an earlier Act that actually created a universal comprehensive compulsory superannuation scheme that their former leader Sir Robert Muldoon came along and pulled apart and that would have been worth $200 billion or maybe $500 billion - odd dollars today. That Act from the 1970s could have been what is being amended today but no today it is the 2006 Act that is being amended.This clause allows us to refer back to the purpose of the KiwiSaver Act. I got halfway through that before I was interrupted. The Act aims to increase individuals’ well-being and financial independence particularly in retirement and to provide retirement benefits. To that end the Act provides for the KiwiSaver scheme to facilitate individuals’ savings principally through the workplace. It is an excellent Act with an excellent purpose being thoroughly undermined by this amendment bill today. It is undermined by taking away the incentive that has made a huge difference to whether or not people sign up to the scheme. Just today—Hon Gerry Brownlee: Why means test it?GRANT ROBERTSON: Why means test it? Gerry Brownlee wants to means test KiwiSaver ladies and gentlemen. That is what he wants to do. There is only one political party that has tried means testing of superannuation and that is the National Party. That was Gerry Brownlee’s party. What did you think of it Mr Brownlee when National went for asset testing? What did you think of that?Hon Gerry Brownlee: I am really interested in what Andrew Little wants to do.GRANT ROBERTSON: What do you know? He does not want to answer—he does not want to answer—because it was his party that went down the path of asset testing. It was his party that wanted means testing for superannuation. I stand proudly for a party that has worked hard to give people security and dignity in retirement by introducing the KiwiSaver Act 2006 by starting the Cullen Superannuation Fund and by keeping superannuation universal. It is members on that side of the Chamber who have got something to answer for when it comes to cutting back—eight cuts to KiwiSaver asset testing on superannuation and Sir Robert Muldoon taking away a fund that would have been compulsory superannuation. That is your legacy Mr Brownlee. That is the legacy you should get up on your feet to try to defend.On this side of the Chamber we are proud of the KiwiSaver Act 2006. We are proud of the fact that we have given New Zealanders the kind of dignity in retirement that you and your cronies would deny them. That is what this bill is about. This bill is about taking away from ordinary working New Zealanders a little bit of an incentive to get into saving—500000 New Zealanders. That is what they are budgeting on—500000 New Zealanders. It is taking away that $1000 from them. That is the record of a party that does not support dignity in retirement for all New Zealanders that never liked the KiwiSaver scheme and that has undermined it from day one of getting into Government. This is just the latest step on that path—amending the KiwiSaver Act 2006 by pulling the rug out from underneath people taking away the very thing that allows those people from low-income backgrounds to get in. Just today I got an email in my in-box when I got back from Auckland to tell me—Paul Foster-Bell: Just the one.GRANT ROBERTSON: I will explain to you later what emails are Paul. I got this email from a constituent saying that they had wanted to join KiwiSaver they were waiting to join KiwiSaver and they had just got a full-time job that would allow them to do this but now it has been ripped away by a Government that simply does not care enough.JAN LOGIE (Green):I rise to take probably a fairly short call on clause 3 of the KiwiSaver Budget Measures Bill the amendment to the principal Act the KiwiSaver Act 2006.Hon Gerry Brownlee: Oh you’ll spin it out.JAN LOGIE: I may not Mr Brownlee. I may not spin it out. There is a valid point I would like to make in relation to this. This is just about amending the KiwiSaver Act 2006. As has been mentioned earlier it relates to the purpose of that primary Act which I also want to refer to. The purpose of the KiwiSaver Act is to encourage a long-term savings habit and asset accumulation by individuals who are not in a position to enjoy standards of living in retirement similar to those in pre-retirement. That is a key point I would like to address. By amending this Act we need to consider the purpose of the original Act and the role that the $1000 kick-start incentive plays in achieving that purpose.The advice that I am looking at from the Inland Revenue Department from 2011 when it was considering the removal of that kick-start programme was that “this could damage KiwiSaver’s attractiveness to new members. There is a strong psychological boost attached with such an early initial increase in a member’s funds and on balance the potential damage to public perception and to the initial attractiveness of KiwiSaver outweighs the diminishing value of fiscal savings made by reducing or removing the iconic kick-start payment.” So there we have just a few years ago advice directly from the Inland Revenue Department on evaluating the scheme and potential cost-benefit analyses of removing this exact provision of the kick-start contribution. The department is telling us pretty clearly that there is the potential to undermine the entire purpose of the Act. And here we are in Parliament passing this bill under urgency with no ability for the Inland Revenue Department to inform members of Parliament around whether it has potentially changed its mind since then—give it some benefit the Government—or not and there is no ability for the public either to contribute to that point.I feel compelled as well to mention the point around ethics in this provision. This is focused on individuals who are not in a position to enjoy standards of living in retirement similar to those in pre-retirement. I do feel compelled to mention because it has particular value in relation to the kick-start the increasing number of New Zealanders now for whom superannuation represents a step up rather than a step down in terms of their incomes. All too many people with disabilities who are locked out of the employment market or who for reasons of sickness are on a benefit are living below the poverty line. When they reach the age of retirement to them superannuation is just so much more generous than the conditions that they are living in on a daily basis. We have such low poverty in our older population relative to our younger population—a rate of 3 percent compared with over 20 percent in our children—that we do need to be looking at that issue and we do need to be looking at levels of debt in this country and savings is a key aspect of that.The most recent research that we have available to us shows that the top 10 percent in New Zealand own over 51 percent of the wealth and the bottom 20 percent of New Zealanders—and you know that is a fifth of our population 20 percent stating the obvious—have zero or little wealth and are often in negative. They are in debt. This $1000 this whole purpose of KiwiSaver is in some part to shift that round. It is actually just to say that as a society we are all better off the more equal we are. It is the role of Government when the market fails and actually I would just say in terms of helping us look after each other to recognise that we are all in this together. There is a role for Government and that relates to the purpose of this clause the bill and the purpose of the KiwiSaver Act 2006. Thank you.Hon DAVID CUNLIFFE (Labour—New Lynn):Clause 3 is relating this back to the principal Act which of course is the KiwiSaver Act 2006. In this short call I want to go back to why the KiwiSaver Act was put in place in the first place. These remarks are foreshadowed by the earlier call that I took on clause 2.There were always three separate and mutually reinforcing objectives around KiwiSaver. The Government seems to be ignoring two of them. The first one which is common ground is that KiwiSaver helps New Zealanders save. In particular it helps those who otherwise would have low savings rates. One of things that Labour abhors is that the removal of the kick-start contribution weakens the incentives which are particularly important for those who have the least and therefore actually thwarts that objective.The Inland Revenue Department study upon which this piece of legislation has been based is in our view a very narrow and very flawed piece of work for several reasons. Firstly it ignores the broader goals which I will discuss in a second. Secondly because it talks about leakage from a target group which is low-income low-saving New Zealanders it does not address the fact that there is a broader benefit for all New Zealanders saving. We would say the Government releasing that Inland Revenue Department study on the same day that it put the legislation into the House is really just political cover. We do not think that it has a high level of analytical weight that can be attached to it.What are the other two objectives beyond helping individual New Zealand families save? The first is actually touched upon briefly in the Government’s Fiscal Strategy Report released this week. On page B.29 it is a goal of the Government to reduce “… government debt through higher public savings [plus put] New Zealand in a better position to cope with the next economic shock or natural disaster. It helps to raise national savings maintain credibility with international lenders reduce finance costs and allow the internationally competitive sectors of the economy to grow.” It goes on to talk about the advantages of the New Zealand Superannuation Fund but interestingly enough does not mention KiwiSaver per se.So it is common ground between the two sides of the Chamber that we need to grow New Zealand’s savings. Members opposite are putting all of their eggs in the basket of public saving reducing the Crown’s debt. The problem with that argument is that it misses the fact that actually only 15 percent of New Zealand’s total debt is public and 85 percent of it—Brett Hudson: Borrow and spend. Nothing changes.Hon DAVID CUNLIFFE: These are facts. Listen to the facts. Eighty-five percent of it is private debt. If we are going to turn New Zealand round if we are going to become more financially self-sufficient this is the reason that the KiwiSaver Act 2006 was set up. Clause 3 hooks this amendment to that Act so it is entirely within scope I think to reprise the objectives of that Act.The key thing is to recognise that growing New Zealand’s total savings position must be driven off private savings and we must therefore have an effective KiwiSaver scheme as well as an effective New Zealand Superannuation Fund. If we do that we move to the third argument which is that we affect a whole lot of macroeconomic variables in a really positive way. What are they and why do they matter?Our savings deficit our gap between what we earn and what we spend by mathematical certainty is going to be the same as the difference in our current account between what we import and what we export in terms of capital. So our savings deficit will in the long run equal our current account deficit. New Zealand’s problem is that we do not pay our way in the world. That is just a fact and that is something that both sides of the House have been grappling with. In order to do that the purpose for which the 2006 Act was set up was to grow our savings position. KiwiSaver is one of the most important tools in the public tool box to do that. Without it we would be sunk. We must keep it strong.At the last election there was a competition between the policies of the two major parties in terms of how to grow New Zealand’s savings rate. I think it was the New Zealand Institute of Economic Research Business and Economic Research Ltd or both that did some comparative analysis between the two. What they showed was that Labour’s plan was going to grow national savings by about three times or four times the rate of change of National’s. That was before National took the kick-start component out of KiwiSaver. I come back to the point that my colleague Grant Robertson made earlier: this is not the first time—DAVID BENNETT (National—Hamilton East):It is great to be able to take a call on this part of the bill. It is pretty rich for Labour members to come in here today and spout on about KiwiSaver and the $1000 when at the same time they are telling those exact workers that they are not going to be able to retire at 65 and if they do retire at 65 they are going to lose more than $1000 in being income tested. It is all right for them to say that it makes people feel good to have $1000 in their hands when they are 21 but when they are 65 they will still have to be working in the freezing works on the farms and doing that hard labour because the Labour Party will not let them retire. That is the reality of what Labour is saying here today. As for that $1000 Labour is going to borrow that $1000 to put into the hands of people today.There is a report that came out from the Inland Revenue Department today and it showed that 38 percent of people who have gone into KiwiSaver have never made a contribution—38 percent of the people going into KiwiSaver do not put in anything into that programme. What does that show? That shows that the Labour Party is looking after its rich mates—it is looking after its rich mates who can afford to put their kids into KiwiSaver. Labour is looking after those people who actually do not do the work who are not in KiwiSaver who are not the people out there doing the hard yards in our country. It is looking after the people who use and abuse the system. Those are Labour people and that is what Labour supports. They are the 38 percent of people who are in KiwiSaver who have only put their money—Hon David Cunliffe: What a bunch of drivel.DAVID BENNETT: It is not dribble; that is the report.Hon David Cunliffe: Absolute drivel.DAVID BENNETT: It is not. Read the report. Go on to the New Zealand Herald website and read the report and you will see Mr Cunliffe that 38 percent of the people you are talking about are not the people whom we need to be involved in savings and getting ahead in this country.It is really rich for Labour members to come here and attack this bill when Labour does not even look after the people they are talking about. We are looking after those people. For the first time in 43 years we went out there and did something for those people. We did not do what the Labour Party is doing now—looking after its rich mates just to buy votes for the next election.Hon NANAIA MAHUTA (Labour—Hauraki-Waikato):Having listened to that contribution I felt compelled to get to my feet and talk about the KiwiSaver bill. That 38 percent that he was talking about is more than likely to be under-5-year olds—parents who opened up a KiwiSaver account so that they could have a prospect of their child having a nest egg when they get older. [Interruption] Oh my gosh! Where is he from? And the $1000 that he is taking away from them is from the future generation and those parents who had a hope that they might have a nest egg.In speaking to clause 3 of the bill it is really important to go back to the principal Act. It is important that we create a generation of savers. In fact if you go to a number of schools—and many of us will remember the days or some of us will remember the days when you had the old PostBank deposit book and you took a gold coin—Ron Mark: My squirrel account.Hon NANAIA MAHUTA: Yes your squirrel account. You took your gold coin and you were able to save and by the time you left primary school you had a few savings.Well those days are gone. In fact what we knew when KiwiSaver was initiated was that there was a generation that had not known what saving was all about until KiwiSaver came along. The $1000 kick-start helped those families who are in the middle and working hard earning two incomes and want the prospect of having something for their kids when they turn 18 and can earn and have a little bit of a savings history to be able to continue to save. I think that is a good idea. Do you not? If you were listening to the Government you would have people think that this $1000 is being taken away from the most vulnerable. The reality is the most vulnerable cannot save. But those hard-working families who do have two incomes and want the prospect of their children having a nest egg when they get older will suffer.Mr Bennett knows like I know having visited St Vincent de Paul that the working poor is becoming more of a prospect in Hamilton than ever before. These are the people who go to St Vincent de Paul and who do have an income. They are working. They still have to go to these services to get a food parcel. He is taking $1000 away from them.That is a shame because what we know is that it is more important now than ever before to ensure that people can save for their future because they cannot rely on universal superannuation. In fact people do not know from one minute to the next whether or not the Government will actually continue to put money into the superannuation fund. But here is the thing for good New Zealanders who are listening to this debate on a Saturday morning when the Government is putting through under urgency this policy to take away $1000. What is it saying to working New Zealanders? It is saying that it is going to pull the rug out from under them. The first bit of legislation that it put into the House under urgency was about the child hardship grant raising the abatement—The CHAIRPERSON (Lindsay Tisch): Order! [Interruption] Order! Clause 3.Hon NANAIA MAHUTA: —actually takes away from working families and that is the point of the kick-start payment. Removing the kick-start actually takes away from those families who are working and do want the prospect of being able to save for their children. When Mr Bennett talked about the 38 percent who were not putting anything into KiwiSaver I thought to myself what planet is he on? He is certainly not in touch with the real world.In fact I have met a number of parents who are delighted with the kick-start payment who have said that for the first time they can open up an account for their child and then just put a little bit away over time—a little bit at a time. Then by the time their children reach 5 by the time they reach 10 the parents can talk to their child about this little nest egg that is growing. By the time they reach 18 they can say to their child that it is their time. In fact many parents have said that they are hoping that their child will get a job at 14 just doing little things like selling feijoas on the side of the road or something like that. But whatever it is it is about parents trying to teach the next generation that saving for the future is really important. The National Government is taking away the $1000 contribution from working families who want the hope and the prospect of a nest egg for their children. It is a shame and it is a shame that the Government is doing it under urgency.JAMES SHAW (Green):I would just like to speak very briefly about clause 3 as well which amends the KiwiSaver Act 2006. Specifically we are arguing the purpose of the original Act. I also want to respond to David Bennett’s wilful misinterpretation of the data. He referred to the 38 percent of people who have not made a contribution since they opened their KiwiSaver account. National calls itself the party of aspiration. The 38 percent of people who have set up an account have done so because they aspire to one day earn enough to put money into the KiwiSaver account. The only reason they have not done so is that they do not earn enough money right now. The $1000 incentive has got them to open up that account and leave it open until the day that they aspire to earn enough money to put in it. So by taking away the incentive you are taking away any reason for them to open those accounts at all. So I would expect that you will see the number of accounts go down as a result of this policy.I have been asking this question over and over again during the course of this debate and I have not received a single response yet: what do you expect to happen to the rate of take-up of KiwiSaver once you have removed the incentive that 92 percent of people understand is there and available to them? Do you expect it to go up do you expect it to go down or do you expect it to stay the same? You have not responded to that question. When you take away the incentives you are going to be lowering the rate of take-up of the KiwiSaver programme thereby undermining the purpose of the original Act.Hon RUTH DYSON (Labour—Port Hills):Can I say to the member who has just resumed his seat James Shaw before I talk specifically to clause 3 that I think what he asked is a really important question because it does go to the heart of why this legislation is being introduced what the Government is hoping to achieve and obviously why we are doing it under urgency. I want to address my contribution in relation to clause 3 “Principal Act amended—This Act amends the KiwiSaver Act 2006” to three points. The first point is: what was the purpose of the principal Act? What was the point of the legislation as passed in 2006? The second point is: what is the purpose of the amendment that we are debating? The third point which again gets to the question that was just raised by my colleague from the Green Party is: why are we doing this under urgency?Unlike others who have referred to the legislation itself I referred back to the Hansard of the KiwiSaver Bill debate in 2006 and I found two really interesting points that I would like to draw to the attention of the Committee. The first point refers to some comments that Michael Cullen made when he introduced the legislation. He said: “The KiwiSaver Bill represents a landmark in social and economic legislation. Saving and investing is the foundation of the future wealth of our country and of us as individuals. KiwiSaver adds a new important element in the savings landscape providing a vehicle to encourage all working New Zealanders to set aside a portion of their earnings to fund their long-term income security.” That sounds pretty good to me.Mr Cullen went on to describe how it was the third in a set of measures that the Government of the time had introduced to restore integrity and security for older New Zealanders. The first measure was to restore the level of superannuation. I heard the Minister Gerry Brownlee crowing this morning about how National had put the level of superannuation up every year for the last 7 years. Well that is good. It is the law so I would hope that that is what the Government did actually. When we were in Government we made it the law because the previous National Government had cut the level of superannuation to a point where older New Zealanders just could not exist on what their level of superannuation was.The second tenet in the principal Act was obviously establishing the New Zealand Superannuation Fund a fund that I know has not received any contribution for years under the National Government. It is another key point in our social and economic security for the future and there have been no contributions under the National Government. There have been tax cuts for the wealthiest New Zealanders—The CHAIRPERSON (Lindsay Tisch): Order! Clause 3.Hon RUTH DYSON: —but nothing for the New Zealand Superannuation Fund. And obviously the KiwiSaver scheme as set up by the principal legislation was the third tenet.If I go to the votes on the primary legislation the parties that voted for it were the New Zealand Labour Party New Zealand First the Green Party United Future and Progressive. They all voted for the introduction of KiwiSaver in the principal legislation which we are discussing under clause 3. The parties that voted against the establishment of a savings scheme that was so vital to our social and economic future were the New Zealand National Party—shock; is everyone shocked to hear that—the Māori Party and ACT. Well that was in 2006. Not a lot has changed since that time except the numbers unfortunately. So those were the parties that voted for and against it. This legislation in my view goes absolutely against the point of the principal Act.Other contributions earlier in this debate have asked that very question: what is the status of an amendment to an Act that actually undermines the primary purpose of the principal Act? In my view what the KiwiSaver Budget Measures Bill does is to undermine the fundamental purpose of the principal Act. We call it an amendment in this debate—that is how it is described in clause 3 of the bill—but it takes away the very incentive that was at the heart of changing the savings culture in New Zealand and making it more possible for people to see the value of savings particularly people for whom saving is very hard. I am not—JAMI-LEE ROSS (Junior Whip—National):I move That the question be now put.The CHAIRPERSON (Lindsay Tisch): I am going to accept the closure motion. We have canvassed the very narrow provisions of this clause.A party votewas called for on the questionThat the question be now put.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Motion agreed to.A party votewas called for on the questionThat clause 3 be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Clause 3 agreed to.Clause 4 Section 226 amended (Crown contribution: kick-start contributions)A party votewas called for on the questionThat clause 4 be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Clause 4 agreed to.Clause 5 Section 226 repealed (Crown contribution: kick-start contributions)Dr DAVID CLARK (Labour—Dunedin North):Thank you for the opportunity to speak to clause 5. Labour has moved a number of amendments that I think are well worth considering and would actually be worth having some debate on. The first is in the name of Kris Faafoi and it refers to the ability for the kick-start payment of $1000 to continue to be accessed by babies essentially. This is designed to ensure that those with newborns are encouraged to take up this scheme so that a savings fund can be established for the child as they grow up with the aspiration that out of it they may be able to afford their first house or they may in some way be able to supplement themselves in retirement. However they do it it kicks off a savings habit and that of course is what the $1000 was intended to do.So that amendment in the name of Kris Faafoi a very good amendment would allow children up to the age of 6 months to be enrolled in the scheme and still be able to access that $1000 kick-start payment. The second amendment that has been moved is in the name of Jacinda Ardern. It proposes that people who are starting a new job should be allowed to access that $1000 kick-start payment.These are all as you will appreciate variations on parts of what is being cut. They are preserving different things according to the principal aim of the Act which is to encourage a savings habit. This amendment in the name of Jacinda Ardern makes it possible for people when they start a new job to receive the kick-start payment so they are off to a flying start in their savings regime. It will encourage them not to opt out because they will see the opportunity there to continue and grow their savings at the time they are thinking about those things—at the time they start a new job.The third amendment that is proposed is in the name of Annette King. It provides an option for people who have been in the same job for the whole time since the KiwiSaver scheme started—since 2006 perhaps or earlier—and who may well think to themselves having watched what has happened during the Budget that this kick-start thing is something that they do not want to pass by. They have been in the same job for a long time and if the Government takes away the right to get that kick-start $1000 payment for people who are starting a new job this amendment enables them to say: “Well actually now I am going to grab that opportunity. I am going to grab that opportunity because my retirement savings are important to me.”These are all measures that are designed in some way to ensure that people can access that $1000 so that the half a million people who we are told will miss out in the next 4 years are limited—so there will not be half a million people who will miss out; it will be fewer. These are sensible amendments from Labour and I think they are worthy of consideration if not lengthy debate. They are certainly worthy of consideration by this Committee and I think that members opposite should think about voting in support of some of these if they really believe in their heart of hearts that they want to increase savings in this country.JAMES SHAW (Green):I just wanted to follow on from David Clark’s contribution. The Green Party is also moving an amendment Supplementary Order Paper 81 to clause 5 of the KiwiSaver Budget Measures Bill which reads: “Replace clause 5 (page 2 lines 22 and 23) with: 5 Section 226 amended (Crown contribution: kick-start contributions)—In section 226(1) replace ‘is a member or must become a member as provided by section 15(1)(b) or 36(1)(b)’ with ‘is a member or must become a member as provided by section 15(1)(b) or 36(1)(b) and holds a community services card issued pursuant to the Health Entitlement Cards Regulations 1993’.” The intention here is to retain the $1000 kick-start for people who hold a community services card.If you look at the original intention of the primary Act it includes the language that the purpose of the original Act is to support “asset accumulation by individuals who are not in a position to enjoy standards of living and retirement similar to those in pre-retirement.” In other words what we are trying to do is to say that if the Government is committed to reducing the cost of the overall KiwiSaver programme by cutting the $1000 kick-start contribution then at the very least the amendment should not undermine the original purpose of the Act which is to support asset accumulation by individuals who are not in a position to enjoy those standards of living so the amendment to retain the $1000 kick-start for people who hold the community services card would enable the original purpose of the Act to continue to still be fulfilled.We chose the community services cards as the proxy for low income. We realise that there are others—there may be others that have more specificity to them—but part of this is to make it easy to administrate. So when someone is choosing to open a KiwiSaver if they are able to present their bank or KiwiSaver provider with a community services card then that is just very easy to administer as opposed to having to prove their income levels at the date at which they applied for the card and so on. We do not believe that this would add significant cost to the Crown because first so many people are already in KiwiSaver. There are about 600000 community services cardholders who are not already superannuitants. Many of those people will already be in KiwiSaver. Of the ones who are not in KiwiSaver some of them simply will not open an account because they do not believe that they have got the income to do so. But for those people who do then the incentive would remain in place. As we know the incentive scheme has worked extremely well so it would just ensure that those people retain some of that support.My colleague Jan Logie earlier referred to an Inland Revenue Department report which pointed out that 92 percent of the public have recognised the $1000 kick-start incentive—that they were aware of it and that was a good reason for them to sign up. There are real substantial issues here to do with embedding inequality because if you are essentially saying to people that KiwiSaver is really honestly a preserve of the middle and upper classes and for people who are on lower incomes it does not really matter and we do not really care about getting them into the programme then in fact not only does that undermine the original intention of the whole KiwiSaver programme to start with it also further embeds and deepens inequality in this country. When people are in different starting positions and then some of them have got a very attractive KiwiSaver scheme and the rest do not then by the time they get to retirement age those who are on low incomes will be absolutely destitute whereas the wealth of the middle and upper income people will have grown over the course of their life. So we think that this Supplementary Order Paper to retain the $1000 kick-start for community services cardholders is a way—not the only way; but it is a way—of trying to prevent that deepening inequality from happening.Hon Dr NICK SMITH (Minister for the Environment):I want to make just a brief contribution and to answer some of the questions the member James Shaw has raised. First of all there is a certain irony about debating a bill about savings when the very purpose of the KiwiSaver Budget Measures Bill is to help get the Government’s books back into the black. And all I hear consistent with every one of the 7 years we have been the Government is criticism from the Greens and from Labour as to why we are not spending. I am yet to hear a single member opposite give an idea as to how the Government might save money and get the country into the black. Members on the Government benches firmly support encouraging people to save. The Budget for next year provides for $643 million of Government support for saving. But there is a very important difference. Do we subsidise people opening accounts? Or do we subsidise people to save? There is a difference. What we are saying is that providing Government support for saving is something we support. Just opening a bank account actually does not get us far.Now can I specifically respond to the question from James Shaw. James Shaw asked a very pertinent question. He claimed that the number of people in KiwiSaver will decline over the next year. So I checked with the officials. There are currently 2.4 million people in KiwiSaver. Can I make another interesting point. When KiwiSaver was introduced in 2006 Dr Cullen said that “In the year 2015 we project there will be 700000 people in KiwiSaver.” In other words our Government has been successful in better embedding a savings culture with three times as many people in KiwiSaver than what even Dr Cullen projected. But here is the rub and here is the answer for Mr James Shaw. Currently there are 2.4 million people in KiwiSaver. How many are projected to be in KiwiSaver in 1 year’s time? One hundred thousand people more. One hundred thousand people more Mr Shaw will be in KiwiSaver in 1 year’s time because the Government is providing ongoing subsidies amounting to $521 every year for a person in KiwiSaver.I want to make one further point because I would love to get an answer from members on the Opposition benches. I use this quote—it is a word for word quote—“Is it right that a person over 65 on a full-time income should get this income supplement? There is a fairness question there. I cannot commit to keeping New Zealand superannuation universal.” That is word for word by Andrew Little. Does David Parker agree with that? Does Annette King agree with that?Hon Annette King: I raise a point of order Mr Chairperson. It was my understanding that in the Committee stage of a debate we ask the questions and he answers them.The CHAIRPERSON (Hon Chester Borrows): Not a point of order.Hon Dr NICK SMITH: The point of order by Annette King speaks volumes about the embarrassment on the faces of every one of those Labour members. Let me ask the question again. Do they agree with the statement from Mr Andrew Little: “I cannot commit to keeping New Zealand superannuation universal.”? Does Annette King agree with it? Does David Clark agree with it? Does the deputy leader agree with it? Their silence is stunning. The silence is stunning. Can a single Labour member put their hand up if they agree with Andrew Little? Can a single Labour member put their hand up if they agree with Andrew Little? Well can I come to my members. Is there a single member on National’s side who agrees and supports John Key’s statement? Could they put their hand up? Yes indeed. You see that is the difference. We are united. We know what we stand for. What we do not have is a single member of the Labour Party who will support the statement on superannuation from its own leader.GRANT ROBERTSON (Labour—Wellington Central):What an interesting contribution from Nick Smith. It is timely that the Minister mentioned who on that side of the Chamber agrees with John Key. I wonder whether members on that side of the Chamber would agree with John Key when he said the following: “The second issue that I raise is that if Michael Cullen thinks that 25 percent of New Zealanders will have a serious KiwiSaver account in 5 years’ time he is deluded” That was in 2006—in 2006. So hands up how many members on the National side of the Chamber agree with John Key. Come on. There are no hands up. They do not agree with John Key one bit.I have got another option for them. I have got another option. Members on that side of the Chamber either think that Michael Cullen was deluded that there would be 25 percent in KiwiSaver or agree with John Key when he said that Michael Cullen was dreaming about 25 percent. They are the two options. No one is putting their hand up. On that side of the Chamber the guilt and the shame is that by the time the KiwiSaver Act passed in 2006 there was one party left in this House opposing KiwiSaver—one party. Can you guess which one it was? Do you think it was the ACT Party? Was it the ACT Party?Hon Members: No.GRANT ROBERTSON: No. Was it the Māori Party?Hon Members: No.GRANT ROBERTSON: Was it New Zealand First?Hon Members: No.GRANT ROBERTSON: Was it the Greens?Hon Members: No.GRANT ROBERTSON: It was National. The only party left that was opposing KiwiSaver in 2006 was the National Party.That is what this is all about—that is what this is all about. The National Party has never liked this scheme which allows ordinary hard-working New Zealanders to get some extra dignity in retirement. It wanted to keep that only for its mates who could already afford it not a scheme that actually gives all hard-working New Zealanders the chance for that little bit extra in retirement. National asks: why not take away the incentive? Why should we not take away the incentive? I say: because the very people for whom that will make the biggest difference are those low-income New Zealanders those young New Zealanders who find it hard to begin saving.We can come back to John Key because he had an awful lot to say about the KiwiSaver Act 2006. I will also ask Government members whether they agree with the following statement John Key made about Michael Cullen in 2006 and the KiwiSaver Act: “If the Minister of Finance had not been so lazy he could have gone and had a look at what President Bush did.” That is always a good idea is it not? Go and have a look at what President Bush did. That went well! There are no hands up on the National Party side of the House. They do not support John Key on that one either.Here is another one. Here is another from John Key. He said: “Michael Cullen knows full well that when there is mortgage diversion”—Hon Dr Nick Smith: What year?GRANT ROBERTSON: 2006. Keep up Dr Smith. 2006. I am sorry Dr Smith does not remember that because at that exact moment John Key was trying to take over the leadership of the National Party and Dr Smith was doing Bill English’s numbers. That is why he does not remember. He was too busy doing Bill English’s numbers. Here is what John Key said: “Michael Cullen knows full well that when there is mortgage diversion”—Hon Dr Nick Smith: What year?GRANT ROBERTSON: —2006. Keep up Dr Smith.Hon Dr Nick Smith: Oh you can’t agree with what your leaders did yesterday.GRANT ROBERTSON: I am sorry that Dr Smith will not remember that because at that exact moment John Key was trying to take over the leadership of the National Party and he was doing Bill English’s numbers. That is why he does not remember. He was too busy doing Bill English’s numbers. So here is what John Key said: “Michael Cullen knows full well that when there is mortgage diversion a savings account is turned into a chequing account.” Rubbish! National members are not here today saying “Let’s get rid of that.” They are not here today saying “Let’s not have people borrow for their first home.” What they are doing is what they think they can get away with which is undermining the incentives to be in the scheme.The reason we are here under urgency the reason the National Government put this bill in as retrospective legislation is that this incentive works.That is why because it knows if it waited and the bill went through the normal process and there was a proper select committee process thousands of New Zealanders would sign up.Chris Bishop: Past tense—it worked.GRANT ROBERTSON: And just how bad would that be Chris Bishop if thousands of New Zealanders got to enjoy being part of a savings culture? He would rather cut them off at the knees. The National Party has always hated KiwiSaver and this is just another example.The CHAIRPERSON (Hon Chester Borrows): Order! Just a moment—I will take a call in a moment. I just want to make the point that the last two speakers Nick Smith and Grant Robertson strayed a heck of a long way around the park and have given each other a slap. It was one each way and now we are coming back to a more confined debate giving leeway for the fact that there is no select committee process and taking into account all of the things that I am sure there would be numerous points of order on if I failed to mention them in my preamble to the next call.JAN LOGIE (Green):I would like to make a few points in relation to the substantive clause of this bill.Hon Gerry Brownlee: Oh not briefly again!JAN LOGIE: I missed Mr Brownlee’s comment. I figure that is probably a good thing. I would like to just address Nick Smith’s comments though. He thought it was ironic that we seem to have so much concern on this side of the Chamber about debt when this was about trying to keep the Government’s books in the black. Well he may have noticed they are not in the black. They have not been in the black for quite a while—like ever.Hon Nanaia Mahuta: 7 years.JAN LOGIE: Oh gosh 7 years and you still have not managed it. Sorry Minister it is salt in the wounds I imagine. If we are talking about debt I would like to just point out to the Committee a little bit of a history lesson and I do think it is very relevant to this piece of legislation and what it is doing. Government debt per capita in 1990 was $10423. In 2008 it was $2408 and now in 2014 under this Government’s watch it is $13289. For a Government that is supposedly so concerned about its books and its levels of debt it has been overseeing a massive increase in the level of Government debt from a very low level when it came to power of only $2408 per person.I want to also call out both the main parties in this Chamber actually around the trend we have seen with household debt and with individual debt in this country which is specifically relevant to this bill. In 1992 the average household debt in this country was $33920. Now in 2015 the average household debt is $128050 and that has been inflation adjusted. We see here a pattern where in fact I would argue that Government debt per capita went from I think too high levels down to very low levels because it had been transferred to the individual. We are seeing that in the very high levels of personal debt through student loans; increasingly through speculation in housing; and through the Government’s lack of management of the housing market. There are now unsustainable levels of personal debt. Now we are also seeing under this Government escalating Government debt. So both sides of that picture are doing badly. The Government is not focused on getting into surplus. It is not focused on the well-being of our society as a whole. I do want to make a point here around income—Chris Bishop: Let the professor have a go.JAN LOGIE: Sorry? Let the professor have a go? Well we claim our knowledge in different ways in this party. I would like to talk just a little bit about intergenerational inequality in relation to this bill and to reference some common understandings of generational wealth and distribution.I am just thinking again about the situation we are in in New Zealand and the importance of saving schemes. After so much of the costs of participating in society have been passed on to individuals there is a common understanding that wealth distribution is strongly affected by life cycle. It makes sense that when you are younger you earn less and you have less wealth. There is an expectation that you will accumulate that over time as you pay off your student debts and that you have the ability to earn more and that you get your house and you pay it off. So you get to over that cycle increase your wealth. Well I just want to think about that. That is the traditional way it has been done. The reality now is that the average woman who has a university degree will be 50 before she pays off her student debt and we have the increasing unlikelihood of young people never being able to buy a house in this country. It is the abandoned generation.FLETCHER TABUTEAU (NZ First):This will be a short speech—[Interruption] Again I would like to take the opportunity to thank the National backbenchers. Specifically in relation to clause 5 which amends section 226 (3) New Zealand First has put forward in Supplementary Order Paper 86 the proposal that we replace “$1000” with “$500”. The reasoning behind that is those Government members and Ministers have stood before this Committee they have argued against their own logic and they have told us that they cannot afford it. They cannot afford it despite the fact that they will not acknowledge that they have taken $7 billion in revenue out of our income stream with tax cuts for the high-income earners. They cannot afford it despite the fact that they have grown Government debt from next to nothing when they came in to approximately $80 billion today—approximately $80 billion.What I am asking those members to do is to show New Zealanders some compassion. Government members would not agree that we give some New Zealanders some time. No we cannot give them time to adjust to these changes—that would be abhorrent! The logic behind their changes they argue was that $1000 is not a cost-effective incentive. They are saying: “Let’s take it away.” But they will not give New Zealanders time to sign up and use it. So they are countering their own argument. New Zealand First has said well OK if $1000 is too much to contribute to a New Zealander’s start-up into their lifelong saving habits then show a little bit of compassion. Show a little bit of understanding. Come down off that high horse and halve it—halve it. Make it $500. Give them something. Members on this side of the Chamber spoke about the motivational aspect of this number. It does make a difference. National please show some compassion.JAMES SHAW (Green):I just wanted to respond to the Minister Nick Smith who I am grateful actually responded to one of my questions. That has been a rare treat during the course of the debate—actually having a response to any of the questions that we have put. I just wanted to check that the Minister said that in a year’s time 100000 more people will have signed up to KiwiSaver—Hon Dr Nick Smith: Correct.JAMES SHAW: —because the member tax credit will be remaining in place. So that incentive still remains within the scheme which I understand. But the Inland Revenue Department report said that the $1000 kick-start contribution was the most effective incentive of the package of incentives within the scheme. I just wanted to refer to the regulatory impact statement which also said that if you were to for example halve the member tax credit then in the next financial year you would save something along the lines of $339 million whereas removing the kick-start saves $175 million. So just halving the member tax credit would actually save more money than removing the kick-start and the kick-start from all the evidence that we have seen so far is actually the more effective component in terms of getting people into the programme.I am just a bit concerned about some of the evidence that we have seen. I recognise that because we are in an urgency process and we are not able to go through the normal standards of scrutiny and hearing from experts some of the evidence is thin on the ground but some of the other things that the regulatory impact statement says give me some cause for concern including page 8. It says that “The analysis has focussed on fiscal savings from changes to KiwiSaver.” We have heard many times over the Government make its case for making fiscal savings for the Crown as opposed to responding to some of the concerns about the impact on New Zealanders. It goes on to say: “We have not undertaken a comprehensive analysis of the effects of these policy changes on other policy issues which have been discussed in the context of KiwiSaver changes in the past.” It says in paragraph 52: “We have not considered the extent to which a reduction in the generosity of the kick start and annual member tax credits will affect the future success (or otherwise) of the HomeStart policy.” In paragraph 55 it says: “it is highly unlikely that the target effectiveness can be materially improved if the target group remains as defined by the Act.” So in other words the principal purpose of the Act is being undermined by this piece of legislation.We get that this will save the Government money. We understand that and we understand the pressure that the Government is under and has put itself under to reduce the deficit and eventually to get the Government books back into the black. We get that but there are still some real questions about why the Government has chosen the particular mechanism it has in removing the kick-start rather than other routes that it might have chosen. We have not yet heard a response to the question of why it is that the Government is implementing this immediately as opposed to over a 6 or 12 or 18-month window to incentivise those who are currently not in the scheme to get into the scheme. We have not yet heard an answer to what the Government’s plan is to increase the savings rate once the incentive to do so is removed.We have not yet heard a response to the ANZ chief economist who said that removing the incentive will reduce the rate of take-up—that was actually my concern that the rate of take-up was going to be reduced. If the Government disagrees with the ANZ chief economist then what is the plan to maintain or increase take-up in the scheme in the future? We have not yet heard a plan for how we handle some of the intergenerational equity issues that my colleague Jan Logie was speaking to. And we have not yet heard a response to why the KiwiSaver is being cut now but the rest of the hardship package does not kick in until the next financial year—why there is a gap there. So there are still I am afraid a number of questions that we do not have answers to but I do thank the Minister for his substantive response earlier.The question was put that the amendment set out on Supplementary Order Paper 81 in the name of James Shaw to clause 5 be agreed to.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the amendment set out on Supplementary Order Paper 86 in the name of Fletcher Tabuteau to clause 5 be agreed to.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the following amendment in the name of Jacinda Ardern to clause 5 be agreed to:Replace this clause with the following new clause:5Section 226 amended (Crown contribution: kick-start contributions)In section 226(1) replace “before they reach the New Zealand superannuation qualification age” with “provided that person A is a person to whom automatic enrolment rules apply under section 10”.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the following amendment in the name of the Hon Annette King to clause 5 be agreed to:Replace this clause with the following new clause:5Section 226 amended (Crown contribution: kick-start contributions)In section 226(1) replace “before they reach the New Zealand superannuation qualification age” with “provided that person A is a person who has been continuously employed by the same business (as defined by section 11(2)) since 2 July 2007”.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the following amendment in the name of Kris Faafoi to clause 5 be agreed to:Replace this clause with the following new clause:5Section 226 amended (Crown contribution: kick-start contributions)In section 226(1) replace “before they reach the New Zealand superannuation qualification age” with “provided that person A is 6 months of age or younger when they become a member of a KiwiSaver scheme”.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.A party votewas called for on the questionThat clause 5 be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Clause 5 agreed to.New clause 5A Section 226 amended (Crown contribution: eligibility under 6 months of age)The question was put that the following amendment in the name of Kris Faafoi be agreed to:Insert the following clause after clause 4:5ASection 226 amended (Crown contribution: eligibility under 6 months of age)In section 226 insert the following subsection before subsection (1A):(1)The Crown must pay 1 contribution to the first KiwiSaver scheme of which a person is a member provided that person is 6 months of age or younger when they become a member of a KiwiSaver scheme.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.New clause 5BThe question was put that the following amendment in the name of the Hon Annette King be agreed to:Insert the following clause after clause 5A:5BSection 226 amended (Crown contribution: continuous employment since 2 July 2007)In section 226 insert the following subsection before subsection (1A):(1AA)The Crown must pay 1 contribution to the first KiwiSaver scheme of which a person is a member provided that person has been in continuous employment with the same business (as defined by section 11(2)) since 2 July 2007.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.New clause 5CThe question was put that the following amendment in the name of Jacinda Ardern be agreed to:Insert the following after clause 5B:5CSection 226 amended (Crown contribution: automatic enrolment)In section 226 insert the following subsection before subsection (1A):(1AAA)The Crown must pay 1 contribution to the first KiwiSaver scheme of which a person is a member provided that person is a person to whom automatic enrolment rules apply under section 10.In section 226(1) replace “before they reach the New Zealand superannuation qualification age” with “provided that person A is a person to whom automatic enrolment rules apply under section 10”.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.Clause 6The question was put that the following amendments in the name of the Hon Todd McClay be agreed to:In clause 6 in new section 240 replace the words before new paragraph (a) with:“Non-compliance with either financial markets legislation as defined in section 6(1) of the Financial Markets Conduct Act 2013 or the Fair Trading Act 1986 is ignored if the non-compliance results from the enactment of the KiwiSaver Budget Measures Act 2015 and either the non-compliance does not continue on or after 22 July 2015 or the non-compliance—”; andIn clause 6 in new section 240(a)(ii) replace “June” with “July”; andIn clause 6 in new section 240(b)(ii) replace “June” with “July”; andIn clause 6 in new section 240(c) replace “June” with “July”.A party votewas called for on the questionThat the amendments be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Amendments agreed to.A party votewas called for on the questionThat clause 6 be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Clause 6 agreed to.Clause 7A party votewas called for on the questionThat clause 7 be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Clause 7 agreed to.Bill reported with amendment.Report adopted.Third ReadingHon Dr NICK SMITH (Minister for the Environment)on behalf of theMinister of Revenue: I move That the KiwiSaver Budget Measures Bill be now read a third time. As KiwiSaver approaches its eighth birthday it is now time to let the scheme be more about people saving for their own retirement and less about Government top-ups. This bill therefore proposes to remove the incentive payment of $1000 paid by the Government to all new enrolees in the scheme and thereby improve the value for money of the scheme. In short we want the Government’s support to be not for opening an account but rather actually for people saving. This change took effect at 2 p.m. on the date the Budget was read on 21 May. People enrolled in the scheme before this will as a matter of fairness receive their $1000 kick-start contribution. There is always that 3-month wait period and that will still apply.There have been some pretty ridiculous comments from members opposite that somehow this bill should not have been put through with a Budget measure. That is about as sensible as saying that tax changes or increases in alcohol taxes or other such measures should not take effect. We all know what that would do. It would result in a sudden rush of people simply taking the opportunity of having forward knowledge.Dr David Clark: Hang on. The argument was this has no effect.Hon Dr NICK SMITH: The contribution from Dr Clark actually just shows how inadequate he is for Government. If you give people forward notice of rules changing then people simply take short-term advantage and that is not to anybody’s advantage. I sat in this Parliament through nine Budgets under Labour where such changes were made and put through as a Budget measure.The KiwiSaver Budget Measures Bill does not affect other aspects of the scheme and KiwiSaver members will continue to receive employer contributions and the Government-provided member tax credits of $521 per year. That is the Government is going to continue to subsidise KiwiSaver schemes to the order of $640 million each year. As always I am grateful for the efforts of those who have contributed towards the passage of this bill. I want to thank the officials for their work on the policy development. I thank the drafters. This is a bill that is about making choices in a Budget. There is a certain irony that members opposite always want to vote for measures like hardship help for children but they are not prepared to vote for the other changes that make those measures financially sustainable and that is why it is an important part of the Budget.The last point I wish to make in this debate is about the most telling part of the debate. In the last 48 hours there have been these very powerful nine words that will ripple shock through my electorate of Nelson amongst the 700000 receivers of national superannuation and I want to conclude with these words—the words of Andrew Little yesterday: “I cannot commit to keeping New Zealand superannuation universal.” Those simple nine words speak volumes about what the members opposite want to do to the security of the retirement arrangements for hundreds of thousands of New Zealanders.Grant Robertson: He voted for asset testing. He was there. He voted for it.Hon Dr NICK SMITH: I have to say to Mr Robertson that those nine words from Mr Little will guarantee me increased support in my Nelson electorate at the next election. I already have received emails from Grey Power members who are terrified by what those nine words mean and I just simply say to members opposite that when they are dealing with the issue of superannuation they should state very clearly whether they agree with Mr Little’s statement yesterday: “I cannot commit to keeping New Zealand superannuation universal.” That is an answer I am looking forward to hearing in this third reading debate.GRANT ROBERTSON (Labour—Wellington Central):There is one member sitting in the House right now who knows all about how it feels to stop superannuation from being universal and that member is Nick Smith. He was here in the 1990s putting on the surcharge and getting asset testing in place. If there is any member in this House who understands what it means to rip apart universal superannuation it is Nick Smith. That is also the record of the National Government in terms of this piece of legislation. Let us not let anyone watching misunderstand that when KiwiSaver went through Parliament in 2006 there were one or two parties that had some concerns about it at the first reading and the votes were a bit split. The Greens and New Zealand First supported Labour’s bill all the way through. By the time we got to the third reading of the KiwiSaver Bill one party was left opposing it.Hon Ruth Dyson: Who was that?GRANT ROBERTSON: The National Party. That was who was left opposing it and it has consistently undermined the KiwiSaver system—until today when we come here to debate this commitment from the National Party to take incentives to save away from New Zealanders.I went to a lot of electorate meetings during the 2014 election campaign. Wellington Central is an electorate where there are plenty of interested people who come out—Chris Bishop: There are two meetings a night.GRANT ROBERTSON: —that is right—week after week. I think we had about 25 electorate meetings and I listened intently every night to Paul Foster-Bell and occasionally when he was indisposed to Chris Bishop. I listened intently. James Shaw was there; he will back me up on this. At not one of those meetings was there a reference to the fact that this would be happening—that KiwiSaver would be undermined and the incentive taken away. Not once was that mentioned in the election campaign. Not once has it been mentioned in the 6 months that have occurred since then. The National Party in a desperate clawing bid to make next year’s surplus look like it exists has decided to do this because this measure today will save the Government $175 million next year. And what is the figure of the surplus? It is $176 million. So there is a $1 million difference. You have heard of the Swedish rounding that happens at the supermarket when they round up and down. Well this is the “English rounding” to get you to a surplus—a $1 million surplus after the $175 million has been counted from this.This is a broken promise. This is a broken promise alongside a series of other broken promises in the Budget—the surplus promise for example and the promise that there would be no new taxes to which we will come very shortly. Apparently there were to be no new taxes; now we have three—another broken promise. John Key stood up in this House and said that debt would be paid down this year. No it will not. [Interruption] In fact the Budget documents tell us Mr O’Connor that it will be 2019 before any debt is paid down. Debt will be $93 billion by 2019 as well. That is another broken promise and this bill is a broken promise.At this time in the economic cycle this is the thing that New Zealanders will come to understand. This is as good as it gets—3 percent growth this year down to 2.4 percent by the end of the forecast cycle. Dairy prices are not recovering. There is no sign of a plan to grow exports—they are flat-lining as well. This is as good as it gets and at the time when it is as good as it gets what does National do? It takes to KiwiSaver. That is its plan. There is no plan to grow the economy in this Budget. What we have got is a “political management” Budget rather than a Budget to grow the economy and if ever there was of a symbol of that it would be this bill—a bill that takes away from the future. It steals $1000 from future generations. If there was any looking to the future in this bill it would be about initiatives to increase savings.David Bennett: Oh more spending—more spending.GRANT ROBERTSON: Here we go. David Bennett says: “More spending.” This is $1000 to give people some dignity in retirement. Mr Bennett have you got KiwiSaver? He is the one member who does not. He is the one member over there who does not have KiwiSaver. The rest of them all took their $1000. I think Todd Barclay was about 2 years old when the bill went through. He got his $1000 but they want to deny that to the rest of New Zealanders.At the very peak of the economic cycle we have 3 percent growth. In 2006 we had 3 percent growth in New Zealand. We had a surplus of billions and unemployment at under 4 percent. Now with a growth rate of 3 percent we have a deficit and we have unemployment nudging up towards 6 percent. This is as good as it gets. It goes downhill from here and on the other side of the House there is no plan to grow the economy.Chris Hipkins: Look at “Benson and Hedges” sitting together.GRANT ROBERTSON: That is right; a great combination Mr Hipkins. The thing about KiwiSaver is that it has been an enormous success. In 2008 when National came into Government it had already worked out after opposing it in 2006 that it was an enormous success. So National members made the commitment that there would be no major changes. Well there have been eight. This is the eighth change. This is another broken promise in a series of broken promises. National said that there would be no major changes and that is because KiwiSaver has been a runaway success.Every member of this House will recognise that New Zealand’s savings rate over many generations has been poor. We have not been good savers. One of Michael Cullen’s many significant legacies to this country is that he took the initiative to turn that round and despite John Key’s standing up in Parliament in 2006 and saying that Michael Cullen was “dreaming deluded and in La-La Land” if he thought that a quarter of New Zealand would have KiwiSaver it has vastly exceeded expectations. It has vastly exceeded the doomsaying of John Key. That is why KiwiSaver has been successful.How unfair is it that if you were lucky enough to sign up to KiwiSaver on Wednesday you got the $1000 kick-start? Young families that I know of here in Wellington who have been really excited about signing their kids up just after they are born and getting them involved—if they were lucky enough to do that on Wednesday great but if it was Thursday then the kick-start was gone even though the legislation has not even passed yet. There were amendments put up by members on this side of the House to say to the National Party that it should at least give people a chance—how about extending it out for a year or even 6 months? That suggestion was turned down. It was turned down because fundamentally this $1000 kick-start has been wildly successful at encouraging people to join the scheme.It is the people who need the kick-start the most—those on low incomes—who will be the most affected by this. The truth is that the choice to become a saver is a difficult one when you are on a low income. We know that saving has got a huge long-term benefit for people. We know that it has got a huge long-term benefit for people but it is a big challenge when you are on a low income. So the $1000 kick-start is the thing that makes the difference. Actually someone told John Key this the day after the Budget. A young woman at a teen parent unit—I saw it on the television—said after she had met John Key that she wanted to get into that scheme but that she just did not have the money to do it and the $1000 has been taken away. That is exactly the person out of whose pocket the National Government is today ripping $1000.The other people are the younger generation. I think it is exciting that when young babies are born their parents say: “Let’s start the nest egg today.” That is great. That is called building a savings habit. Cameron Bagrie the chief economist at the ANZ does not often agree with the Labour Party but today he has come out and said that the reason why we have got the incentive is to actually start the habit of saving. The problem is that if you get to 18 or 20 and you have not got that account set up with that $1000 then there will be much less of a chance that you will carry on with it. National members can reflect on as they sit over there the fact that those are the two groups that they are taking the opportunity away from today. They are taking $1000 away from those low-income earners and those younger people. We have had a lot of preaching from that side of the House since their late conversion to wanting to do something about child poverty. Well here is something you could do: actually give people on low incomes the chance to get that $1000 and to get that savings habit under way. This bill undermines one of the great retirement savings initiatives of New Zealand and the National Government should be ashamed of it.DAVID BENNETT (National—Hamilton East):It is outrageous that that member Grant Robertson gets up and says these things when his leader wants to kick people in the guts when it comes to their superannuation. He does not want to give New Zealanders the ability to retire in dignity; he wants to take away their hard-earned retirement savings by taking away their ability to get universal superannuation in New Zealand.That member said that giving $1000 to anyone who signs up to a bank account gives them dignity in retirement. The previous speaker who will speak again said his reason for having the $1000 is to make them feel good. That is the economic rationale behind the Labour Party: to give $1000 to everybody who signs up to an account.The Inland Revenue Department has just put out a report on KiwiSaver. This report says that 38 percent of people who have signed up have never contributed since. Nanaia Mahuta says that is only the young people who have signed up for it. That cannot be the case because two-thirds of the people who should be in KiwiSaver—low-income New Zealanders who should be saving for their retirement—are not in KiwiSaver. The people who are in KiwiSaver are the middle and high-income earners whom Labour wants to give a thousand bucks to in order to give them dignity in retirement and to make them feel good.That is the Labour Party of old that is the Labor Party of Australia and that is the Labour Party that fails and is not good for New Zealanders or for savings going forward. The members are quiet because they know that that is the reality of what is going on. Their petty politics—they come into this room and try to sell to the New Zealand public that Labour is some kind of glorious party that would give them a thousand bucks. Well every time you give a thousand bucks to every New Zealander who signs up to an account you take $500 million off our accounts. When you do that you put New Zealand further into debt. That is the thing that the Labour Party is advocating for.New Zealanders need sensible economic management. If we are going to spend money in these times we should spend it on the people who need it for the first time in 43 years; we do not go out giving handouts to people who are the middle and higher income earners just to make them feel good and to give them dignity in their retirement.Dr DAVID CLARK (Labour—Dunedin North):Well that member who just took his seat David Bennett was in a lather but he has overlooked a large number of relevant points. He really really has misunderstood this bill. I guess that is what we have come to expect from him.Kris Faafoi: He hasn’t read it.Dr DAVID CLARK: He may not have read it. He certainly has not read on any behavioural economics as he just admitted then in his speech. What that member is going to have to face when he goes back to his electorate office are questions from hard-working New Zealanders who are trying to get ahead. The effect of this bill is that over 1700 people per year—over 1700 people per year—in his electorate of Hamilton East will miss out on that $1000 kick-start contribution. I expect a whole lot—Hon Nanaia Mahuta: How many?Dr DAVID CLARK: Over 1700 per year will miss out on the kick-start contribution in his electorate. I expect a few of them will come and ask him some hard questions. They will say: “Mr Bennett how come you and your National MP colleagues have taken this $1000 and then stopped it for everybody else after you?”. That is what the people in Hamilton will be saying.They will be saying that around the country. They will be saying it in Clutha-Southland. If they can track Todd Barclay down they will be saying: “Todd Barclay how come you took that $1000 kick-starter payment and now you’re shutting it off for 1700 people from our electorate every year for ever more?”. That is what they will be asking. They will be asking Mark Mitchell in Rodney: “How come you Mark Mitchell took away that $1000 payment for ever more even though you took it for yourself?”. In Rodney 1700 people per year will miss out and it will be no different in any other electorate. It will add up to 7000 people in every electorate in this country over the next 4 years who will miss out on this payment because of this Government’s refusal to tackle the long-term savings problem of New Zealand.The Government is all about getting to some kind of sham surplus today because it has mismanaged the economy so badly—so badly. There is a $1 million—sorry I wish it was $1 million! There is a $1 billion black hole that has opened up between the last Budget and this Budget. That is the mismanagement of this Government. It is short on vision and has failed to achieve its central election campaign promise.What was the Government’s central election campaign promise? Well do we need any reminding? The Government members said they would bring the books back into surplus this year. They have failed again. For the seventh Budget in a row the National Government has failed to achieve a surplus despite making that its central campaign promise. This is a Government that is failing on its promises and losing the trust of New Zealanders.New Zealanders were being promised a wage rise as well. The Government said that their wages would go up by $7000 over time. In the Budget we heard Bill English kick that can down the road for another 3 years. There is always jam for tomorrow—another broken promise. It reminds us of the promise not to increase GST. John Key said they would not increase GST. After that election he put it up to 15 percent. New Zealanders are counting the broken promises from this Government.Here is another broken promise: we will increase exports to 40 percent of GDP. Well they are down below 30 percent now and dropping and projected to drop further next year. The Government members are not getting this economy back on the right foot. They are mismanaging the economy and they are taking from the pockets of children—taking from the pockets of children—to pay for their economic mistakes today. They are robbing the future of the children to pay for their economic mistakes today. This is a Government that is out of ideas. It is out of touch. Those members might as well resign actually and give us an election sooner because they have no new ideas. They are failing to deliver on their promises. This measure is reducing savings at a time when we actually need an increase in savings. This is a time when we need long-term thinking not the “short-termism” that this Government is putting forward.The Government has failed to support the regions. It has failed to diversify the economy. It has failed to address the Auckland housing bubble. It has failed to develop the skills of New Zealand workers. And it is failing our economy more and more over time. This is a Government out of ideas and this is its big idea in this Budget: a new tax. Let us not forget that National campaigned on no new taxes and we have got three in this Budget alone. This is a Government that is so so out of touch that it thinks it can break those promises and arrogantly carry on and then pass this legislation under urgency not allowing New Zealanders to have a say on it.We heard the Financial Services Council come out today and say that this bill is like robbing the kids’ piggy bank to go down to the pub for a beer—robbing the kids’ piggy bank to go down to the pub for a beer. That is the kind of vision we have from this Government. Why will it not stand up and be counted? New Zealand is suffering as a consequence. This Budget is the seventh deficit in a row after nine surpluses from the Labour Government. This is economic mismanagement like we have never seen before. Those members should hang their heads in shame and they are and rightly so.CHRIS BISHOP (National):During the course of the debate over the last couple of days some very very silly things have been said by Labour members and members opposite. We had Andrew Little’s comment about how he cannot commit to keeping New Zealand superannuation universal. We have had Grant Robertson’s commitment to bring back the $1000 kick-start. But the one that takes the cake is the comment made by the member who just spoke which was that the Government should resign and we should have an early election. Really? I mean come on!After the worst Budget debate speech probably since Parliament started sitting in New Zealand ladies and gentlemen—after the worst Budget debate speech and a party in total disarray with David Cunliffe David Parker and Grant Robertson doing the numbers—do these guys opposite really want an early election? And after a Budget that raises benefit levels for the working poor and the poor in our society for the first time in 43 years—do these guys really want an early election? I do not think so. So that is going to take the cake in terms of silly things said by members opposite.It has been a very strange debate in the Parliament because what you have in the course of the debate on this KiwiSaver Budget Measures Bill is the Labour Party arguing for a form of middle-class welfare and arguing against a Budget that helps the most vulnerable in our society. It is some sort of weird parallel universe and what does it say about their priorities? What does it say about the sense of priority of the Labour members opposite when they are willing to defend something that is sure nice to have but not necessary? And they argue against a Budget that delivers support and help for those who most need it. It is a very good Budget which I and members on this side of the House are proud to support. It is a strange day in Parliament.Mr Clark keeps asserting that this Government is mismanaging the economy. Well actually something interesting happened in the month of April 2015. April 2015 marks the first month since April 1991 that more people have moved from Australia to New Zealand than the other way. So there are a hundred people a net gain in migrants who have come from Australia to New Zealand. And why is that? Members opposite will say the Australian economy is not doing so well; that is true relative to us. But it also highlights the importance of having a strong and fast-growing economy and that is what we have. So nothing could be further from the truth.This bill is another bill put forward by the Government in order to continue to strengthen the New Zealand economy and as part of a suite of measures as part of the Budget to continue the New Zealand economy growing strongly. I commend the bill to the House.JAMES SHAW (Green):I rise on behalf of the Green Party on this third reading of the KiwiSaver Budget Measures Bill. I am an Opposition member of Parliament but I do not like being oppositional for the sake of it. I do not believe in tribalism. But as a member of the Opposition I do believe that my role is to challenge the Government and to hold it to account. So during the course of this debate—I have actually tried to treat this as an actual debate where we actually try to find out what the Government is thinking—I have asked a number of questions in I think a fairly reasonable tone and I think that they are fairly reasonable questions. I do want to acknowledge that some of those questions have been responded to.I would like to start by just responding to some of those questions. One of the questions that I asked was why would you cut the kick-start for KiwiSaver now rather than cut the member tax credit or reduce the member tax credit when that would both save more money and keep in place the incentive that most people actually recognise. Nick Smith did respond to that. He said that we are doing it now because we want to incentivise people not just for opening an account but for actual savings which is a pretty reasonable response. I understand that. But if people are responding to opening an account because of the $1000 kick-start then what you can predict is that fewer people are actually going to be opening an account in the future. What we know is that there are a lot of people—aspirational people—who are not earning a great deal now but who hope to earn more in the future who have opened accounts because of the kick-start programme. The accounts may be dormant at the moment but these are people who want to earn more in the future and can see a pathway so that when they do they will have at least a little bit put away to start with.The second question that I asked was whether the Government considered leaving the kick-start in place for a period of time—say 6 12 or 18 months—to enable people who are not currently enrolled to have the opportunity to enrol or to enable people who are partially through the process of enrolling to have a chance to actually complete their enrolment. Again Minister Smith said we did not want a rush to take advantage of the programme. If we did not want people to take advantage of the programme we would not have set it up in the first place. That is the whole point of the incentive scheme—to get people to take advantage of the programme. So to me that argument holds no weight.Related to that why cut the KiwiSaver now but delay the rest of the Budget hardship package? In other words why take this away now and give people that gap where they are screwed from both ends? Somebody referred to this as middle-class welfare. But can I just say that that question was not answered by any speaker from the Government side at any point during this debate. That leads me to the other five questions that remain unanswered. As I said I think I have tried to ask pretty reasonable questions in the spirit of holding the Government to account and at the very least finding out what it is thinking. During the course of the debate no one—no one—has even attempted to try to respond to these questions so I will ask them again.New Zealand is 22nd out of 24 OECD countries for savings. Cutting the KiwiSaver incentive reduces the savings rate. What is the Government’s plan to increase savings? There is no plan. There does not seem to be a plan. We have not heard one yet. My next question is that the ANZ chief economist says that removing the KiwiSaver incentive will reduce the rate of take-up. What is the plan to maintain or increase the rate of take-up in KiwiSaver? I have not heard an answer to that question. There is no plan. Next question: how does reducing the KiwiSaver take-up rate impact intergenerational equity issues relating to today’s working parents essentially paying for three generations’ worth of costs? How does it deal with the change in the dependency ratio from 7:1 today to 2:1 in 30 years’ time? No one has responded to that question. Next question: the Government is reducing the short-term deficit by raiding New Zealand’s retirement scheme again. What is the plan for long-term—long-term—financial sustainability? Nobody has responded to that question.I know that it is a Saturday and we are under urgency and not all that many people watch Parliament TV. There have been a few people in the gallery—thank you for coming and watching. But it seems extraordinary to me that we could pass a piece of legislation of this much importance to this many New Zealanders about the long-term financial viability of the country and its residents and receive no answers to any of those questions. The Government is being completely unaccountable in passing this legislation. It is lazy to not be responding to these questions. It is arrogant to be relying on your numbers rather than attempting to respond to these questions. Like I said before I think that these are reasonable questions I have tried to ask them in a reasonable way and I think I have asked most of them about four or five times just in case anybody wanted to actually respond to them.There are only a couple of pieces of evidence—of actual evidence—that we have seen in the House today in relation to the bill. One is the regulatory impact statement. But in the regulatory impact statement it says in three or four different places that they did not consider any of the impacts of this legislation beyond the financial impact on the Government’s books. In other words we have no idea what this is going to do to New Zealand’s savings to the New Zealand population or anything other than the impact on the Government’s books. We have no idea what the impact is. The other piece of information that we have got is a 2011 report from Inland Revenue which said that to remove the incentive would gut the programme. So we have seen no positive arguments other than to get the Government’s books back into black—an admirable objective and I am fine with that notion but other than that we have seen no evidence relating to anything else in terms of the impact of this scheme. The only evidence we have seen is that it will have a negative impact. For all those reasons the Green Party cannot support this legislation. Thank you.FLETCHER TABUTEAU (NZ First):As a new member this term I cannot believe the audacity of this Government and its members. I just do not know what is left for this Government to do to meaningfully address our growing trade deficit for example. It is a Government of members who stand in front of the people of this country and tell us how important growing our export businesses are but then it will not stand up in front of the people of this country and tell them that real export figures are going backwards.I just do not know what is left for this Government to do that is meaningful to address the Government’s own growing debt. It is spiralling out of control. The Government tells us it is fiscally responsible and it has admonished this side of the House for being apparently irresponsible itself. But in its own books—its own books which it obviously does not open very often—its debt continues to spiral out of control. Those members dare not stand there and tell New Zealanders that our debt is $19000 or nearly $20000 per person—they cannot stand there and tell us that that is fiscally sound. Even in the time of Muldoon’s Think Big projects the per-person debt was half of that. These masters of fiscal management have overseen a growth in debt from next to nothing to $80 billion. They should not accuse this side of the House of distorting the truth. Someone is going to have to deal with this unsustainable debt and it will not be that Government.Business commentators have already described this Budget as piecemeal and reactive. If there is a plan behind this Budget if there is foresight and meaningful consideration given to the future of this country then the Prime Minister and his team have hidden that vision so incredibly well. Commentators went on to say that this Budget will do nothing to unite the business sector—that is the National Government’s Budget has nothing to unite the business sector.Regarding the KiwiSaver legislation itself the National Government has just shown us how callous it is. The logic that it uses is that the $1000 contribution is too costly an incentive. It is ignoring the tax that it took off its rich mates some time ago. It is ignoring the money that it may have saved from its welfare cuts in the 1990s.New Zealand First asked as a formal process in this House for the Government to hold off—do not pass this bill; do not make it a retrospective piece of legislation. If the $1000 contribution has no effect which is the argument behind this bill then why the urgency? Why not give our children a chance? Even the meanest estimate from the Government in the last couple of days during which it has tried to convince New Zealanders that they will be giving only that up is $25000 per person at retirement. A more reasonable estimate—and I speak to the Minister who questioned my numbers; I did adjust for tax and I did use reasonable numbers—is that the lost income for our retirees is between $117000 and $145000 per person at retirement based solely on the $1000 contribution alone. That is just an unbelievable loss to our future generations.With at least 500000 New Zealanders—but many would argue it could be 1 million New Zealanders—still to sign up the multiplication is basic. I will leave it for the backbench members over there to do the maths themselves but New Zealand First asked this Government to consider halving the kick-start contribution to $500 dollars. The $500 seemed like a compromise. The savings even at $1000 are so minuscule as to be redundant—they truly are. But $500 we asked for. Let us be reasonable. Do not take it away so that many of our children now are missing out because of the miserly and ill-conceived processes of this Government.The debate has been far-reaching and I think quite in-depth and we have spoken about the fairness. From one morning to one afternoon we now have a disparity in entitlement between a child who applied in the morning of the day of the Budget and a child who applied in the evening. It just does not make sense. There was no warning. There is no fairness. It is simply a retrospective piece of legislation and I think we all know—I think we have all seen—that that retrospective legislation is bad basically. It often does more harm than the good that we think it will do.I did not speak about it myself but I will take this opportunity now to speak of certainty—certainty for New Zealanders in their savings. That is a key element of any successful savings fund. The New Zealanders who wish to use it must have certainty but to cut away at it eight times continually over the years—whether you like it or not certainty is so important in order for New Zealanders to have faith in a savings scheme that they can believe in that they can use and that will supplement their retirement income into the future. This Government has taken that certainty away in so many ways with this Budget with this bill being just another example of that.I ask this Government not to be so miserly—let us not take it all away; let us give New Zealanders some time—but no. I do not think that at any stage in this debate there was any real engagement. Certainly no one was listening as no one on that side of the House seems to be listening now. It is a presumed outcome. Those members are being lazy they are not engaging and they are using their majority to simply pass poor legislation through under urgency with no engagement and no discussion with the people of New Zealand.No one on that side of the House has listened to logic. No one has listened to reasonable requests based on compassion. New Zealand First cannot support this bill.BRETT HUDSON (National):It is an absolute pleasure to rise in support of this bill in its third reading. A speaker on our side remarked earlier on today that it was almost like a parallel universe. What we see with this magnificent Budget introduced by this National-led Government is that this National-led Government is supporting those in most need with the first increases to real benefits in 43 years—43 years. In that time there have been two Labour administrations neither of which did the same thing. In terms of this this bill what Labour is doing instead is advocating for middle-class welfare. So we have National supporting those most in need by doing something real and Labour seeking to hand out money to people who by and large do not need it. That is a wonderful wonderful thing to see and I commend our leadership for its vision. I am fully supportive of this bill.I just wanted to respond to a couple of things that the Greens speaker Mr Shaw had to say. He basically said that the primary incentive for people to be in KiwiSaver is the $1000 the Government is giving. He basically said that people join KiwiSaver for that reason alone. That is not saving; it is simply Government expenditure. What we are doing is saying that instead of spending it that way we will reprioritise it to those who need it most. That is helping the people who are in the most need. That is making the best positive difference to New Zealand.Mr Shaw asked what was going to incentivise saving. Well that is easy. It is called growing the economy and creating more jobs and higher paying jobs and what we have been seeing over the term of this Government is average wages rising faster than inflation. So if you want to help people to save Mr Shaw get in behind our Business Growth Agenda. That way you will do something that is positive and will work. I commend this bill to the House.JAN LOGIE (Green):Just to respond to the point about growing the economy and that being the way to increase savings I would like to draw the member Brett Hudson’s attention to this little graph from the Parliamentary Library. [Interruption] Oh facts! We have facts in the debate—goodness! It shows that in the 1980s household savings were just around $700 per household in New Zealand. Then after this Government’s reforms in the 1990s they went down to a point of almost negative $1500 I think while you were so busy in your paradigm growing the economy.Then we just managed to get above zero again after the introduction of KiwiSaver. Although I have some issues with some of the impact of KiwiSaver on inequality the fact that it has improved average household savings is irrefutable. We have evidence from the Inland Revenue Department that tells us that the highly successful recognition for KiwiSaver is the $1000 kick-start payment—92 percent recognition. It is the most successful part of the programme.The projected increase in KiwiSaver membership is approximately 300000 over the next 4 years. There would be fiscal savings to be made from cutting that kick-start; however quoting the Inland Revenue Department from its 2011 regulatory impact statement: “this could damage KiwiSaver’s attractiveness to new members. There is a strong psychological boost attached with such an early initial increase in a member’s funds and on balance the potential damage to public perception and to the initial attractiveness of KiwiSaver outweighs the diminishing value of fiscal savings made by reducing or removing the iconic kick-start payment.” That is the advice. But of course we do not have the advice being presented. And the members on that side of the House do not have the advice because the regulatory impact statement did not ask those questions. The officials were not given the opportunity to provide that advice to the Government because this legislation happened at the last minute to try to get closer to that ever-elusive surplus.The only questions that were actually asked and the only advice given to this House on the impacts of this bill were on what it would do to the Government’s bottom line because actually it just cares about the public relations exercise. That is what this is about. This is not about the current account deficit. This is not about the distribution of wealth in this country. This is not even about people’s savings or anything to do with our society and the well-being of people. This is a public relations exercise.I want to remind the members on that side of the House that if an economy is not working for everyone it is not working. What you are putting at risk is something that has helped get our households back—some of them at least—into savings. This country has a massive issue with income inequality. You say that you care about that and that is why you are increasing benefit rates and that is well well overdue. But this country also has a very significant problem with wealth inequality. The top 1 percent in this country own 51.8 percent of the net wealth—that is as of the last time we had those figures. The bottom 20 percent have zero or little wealth and many of them are in debt.That is partially why this $1000 contribution is so critically important. It is not peripheral. This is not about the middle class because that $1000 contribution was the one thing that everyone could get even if they were on a low income and unable to contribute from out of their wages to the scheme because they wanted to ensure that their children could eat. I understand that you want to feed your kids before you put money in the savings for your retirement. I totally understand that. That is what this $1000 represents. This legislation is the ripping away of that. That is not about a redistribution of wealth or consideration for the well-being of our society as was suggested from that side of the House. It is the exact opposite. I really do take objection to the way that this has just been pushed through under urgency.The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I apologise to the member. I omitted to give her a warning bell but her time has expired.Hon RUTH DYSON (Labour—Port Hills):It is a very sad day for Parliament to be passing legislation that puts us back in terms of changing the social and financial security of older New Zealanders in the future—people who are just children or young people now. It has been a really bad day for the Government actually. It started off particularly badly when Todd McClay when reading his speech notes for the second reading said that he was speaking on behalf of the Minister of Finance. This legislation is so rushed that the Hon Todd McClay did not even know it was in his name. I think that is a first for this Parliament. It kept going downhill after that. The Hon Gerry Brownlee suddenly had a rush of blood to the head and he told David Bennett that he had had a rush of blood to the head and was going to take the next call. David Bennett had a rush of blood to his face. The tension was extraordinary as Gerry Brownlee took David Bennett’s call. They could have been advised to take some of his other calls later in the debate. I think it would have helped the National Party’s credibility.In 2008 John Key made a very serious and consistent promise to the New Zealand public and that was that there would not be significant changes to the KiwiSaver scheme despite National voting against it when it was originally introduced in 2006. That broken promise is now matched by the other broken promises about no new taxes or delivering a surplus. I do not know how new National Party members feel about going out—I am sure they had every honest intention—when it turns out that they have lied to people. How do they justify that? How do they say: “That’s OK. I will just go back to my electorate and forget what I said.”? People remember. I think that members of Parliament should have a conscience about what they committed to. If there is some genuine reason for them not being able to deliver a promise or heaven forbid breaking it they must have the courage of their convictions to go back to their constituency or to the people around where they live if they are a list MP and explain that to them.I do not think that one National backbencher will do that. They are just voting fodder. They are just being used as voting fodder. None of them seems to have had the courage to question or stand up to the people who made the decision. My understanding is that a very small number of Cabinet members made these decisions around this legislation and that is a very bad place for us to be.I just want to conclude by saying that helping the most vulnerable people in our society is a good thing but it does not ever need to be and it should not ever be at the cost of young savers just a couple of rungs up the ladder. That is what this KiwiSaver legislation does and that is why I am very proud to have my name on the Noes side and to be voting against this bill.ANDREW BAYLY (National—Hunua):I have listened diligently and studiously to all the arguments from the Opposition and the reality if you go back to first principles is that this is a piece of legislation that is really about helping families in need. This is about delivering $790 million of assistance to the people who really need it in New Zealand. That is why I believe that this bill is an appropriate thing to do. I commend the bill to the House.CHRIS HIPKINS (Labour—Rimutaka):I want to make one final contribution in this debate and one point in my final remarks on that. That is to the members opposite who have talked about the need to target assistance to those most in need. The point that I will make to them is this: the people most likely to be in KiwiSaver now are the people who are on middle and higher incomes. They are the ones who are most likely to have already benefited from the $1000 kick-start. The people who are now most likely to miss out on the $1000 kick-start are those on lower incomes who have not already signed in. A child from a middle-class family who has been signed up is going to get a better deal than someone who is on a minimum wage now and wants to sign up tomorrow. That is wrong. That is the unfairness.ALASTAIR SCOTT (National—Wairarapa):The point that Mr Hipkins makes is absolutely right. The beneficiaries or the winners of this current policy are the middle and upper-class high-income earners. The people we really want to help are those beneficiaries who are not participating in this scheme. That is why given a choice we prefer to dedicate a $790 million package $25 a week for each family with children on a benefit rather than just an opportunity to take $1000 from the taxpayer to put in their bank account to accumulate over a number of years without any contribution of savings at all. That is the choice.I am pleased to stand and support this bill because it demonstrates that we on this side are fiscally responsible whereas on the other side they have given no alternative. All other things being equal where are they going to find that $500 million that we have found? There are only two choices. They either borrow it or they tax. That is what they would have to do. They would have to borrow that $500 million or they would have to increase the taxes of middle New Zealand and that is why I do not support their proposal. That is why I commend this bill to the House.A party votewas called for on the questionThat the KiwiSaver Budget Measures Bill be now read a third time.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 56New Zealand Labour 32; Green Party 12; New Zealand First 12.Bill read a third time.RON MARK (NZ First):I raise a point of order Mr Speaker. I request under Standing Order 144 that a personal vote be held. Our reasons in New Zealand First for doing so are twofold: one this is the most controversial piece of legislation that is being passed under urgency in the House at this time; and secondly we continue to hear reports of MPs being seen off the premises who we believe should be here.JOANNE HAYES (Third Whip—National):No. All our members are on site. Thank you very much.Hon Members: How do we know?JOANNE HAYES: Because we have evidence of that. Thank you very much.Ron Mark: Mr Speaker—The ASSISTANT SPEAKER (Hon Trevor Mallard): Well I think we are in danger of getting outside a normal approach but I will hear from Ron Mark as long as it is relevant. I will warn the member that if there is a question of evidence of members whose votes he knows have been cast being off the premises the appropriate way of doing that is to raise it with the whip of the party. If there is a question of people’s votes being recorded incorrectly by a whip then the initial thing that the member should do is to raise that with the whip or the person who is casting the vote. It is just not appropriate to raise it with me.RON MARK (NZ First):I understand that. I would simply make a request in accordance with Standing Order 144 which states: “A personal vote may be held after a party vote if a member requests one …” and it goes on as you know “and the Speaker considers that the decision on the party vote is so close” and the rest is up to you. But it actually says that a personal vote may be held following a party vote if a member requests one. I am so requesting.The ASSISTANT SPEAKER (Hon Trevor Mallard): I have been around here long enough to remember this coming up and I may well have been involved in it myself. There is a ruling of Speaker Kidd which is 69/6 and it reads: “The fact that the House may on a party vote divide rather closely might well be a pattern on every vote throughout a session.” and I think that obviously there is a possibility of that applying at the moment. “It is clearly not intended by the Standing Orders that there should be a personal vote more often than not. Closeness on a party vote is not enough of itself for a personal vote unless there is something that might make a material difference. This might arise for example out of some elements of confusion.”I would just add to that that I have sat through the majority of the third reading on this bill. I have heard nothing from for example a minor party or any member that has indicated to me that a member’s intention was to vote in any way other than the way the votes have been cast by the whip. As I indicated to the member earlier if it is his understanding that members are not present who should be present that is something that should be taken up with the whips who are the persons responsible for that.CHRIS HIPKINS (Senior Whip—Labour):I raise a point of order Mr Speaker. I fully accept the ruling that you have made and that there will not be a personal vote on this. I wonder whether you might take up with the Speaker when he is available and with the other presiding officers a wider issue which is that the vote system that we have at the moment certainly relies on a degree of honesty. I keep very clear records the National Party keeps very clear records and I am sure all of the parties keep very clear records of who is in the building and who is not. I have also read the Speakers’ rulings and most of those relating to personal votes predate MMP when votes along party lines were not as common as they are now. In fact they are now the default and the other way personal votes are very rare. I wonder whether this may be something that presiding officers would now like to consider and come back to the House on—whether there are any circumstances under which the House may consider if you like an audit of whether in fact parties are voting with the numbers that they should.Although it is an honesty system and members are all trusted on it there does need to be now and then some check on that. As a whip I fully accept that from time to time the Government may wish to check that I am doing what I say I am doing and we may wish to do that. There is actually very limited provision it would appear under Speakers’ rulings and the Standing Orders for that to happen at the moment. That may be something that the Speaker and the other presiding officers or perhaps even the Standing Orders Committee may wish to consider given that now we are well into MMP and this is a new issue that has not really ever been tested.Hon GERRY BROWNLEE (Leader of the House):With all due respect to Mr Hipkins’ view we are 20 years into MMP. There has not been a case where a whip has been proven to have misled the House—Hon Annette King: We’ve never tested it.Hon GERRY BROWNLEE: Well I do not know what happens in the New Zealand First caucus; I have got no idea.The ASSISTANT SPEAKER (Hon Trevor Mallard): I just warn the Hon Annette King not to interject again.Hon GERRY BROWNLEE: What I can tell you is that Standing Order 144 is very specific about the role the Speaker has in determining whether or not there should be a personal vote and the points advanced by Mr Mark are not called on in the test that you have to apply.The ASSISTANT SPEAKER (Hon Trevor Mallard): James Shaw do you still want to make a comment?JAMES SHAW (Green):Yes Mr Speaker. You referred to Speaker Kidd’s earlier ruling about some element of confusion. If Mr Mark has been hearing stories that there are MPs off campus and the Government whip is saying that they are not then that to me seems like an element of confusion.The ASSISTANT SPEAKER (Hon Trevor Mallard): I do not think I need any more assistance. The rules in the House have been very clear. A whip’s assurances having been given are taken for people who are casting votes and that will continue to be the case. I will tell members that from my personal experience without naming the particular member I have myself on occasions gone down to a local tavern and hauled out someone who I knew did not have leave. People are very very careful when casting votes to make sure that they are properly cast.Border Processing (Arrivals and Departures) Levy BillFirst ReadingHon NATHAN GUY (Minister for Primary Industries):I move That the Border Processing (Arrivals and Departures) Levy Bill be now read a first time. I move that the Border Processing (Arrivals and Departures) Levy Bill be introduced to amend the Biosecurity Act 1993 and the Customs and Excise Act 1996 to create an obligation on arriving and departing air and sea passengers plus crew to pay a border clearance levy. The levy will fund the costs of border processing incurred by the Ministry for Primary Industries and the New Zealand Customs Service and ensure that border services are sustainable going forward.Our border staff work incredibly hard to prevent and stop threats at our border. The success of New Zealand as a trading nation depends on making sure these risks are controlled and managed so our economy can grow and prosper. As our trade and travel links have expanded over recent years not only have the numbers of travellers entering New Zealand increased but also the diversity of those travellers has grown. Today we have more travellers arriving and departing from more locations than ever before and commercial air and cruise operators are continuing to look at opening up new routes to New Zealand. This is good news for New Zealand but it also brings with it an increased risk at our border. Border clearance activities are driven directly by the volumes of travellers arriving at and departing our shores. This has been steadily increasing with international passenger numbers rising by 3.5 percent a year and this trend is set to continue and may even expand.The border clearance levy will help the Ministry for Primary Industries and the Customs Service futureproof border services as it allows the agencies to meet the demand of increasing traveller and also crew numbers. It is obvious that both agencies must be able to manage the growing risk of biosecurity incursions and harm from prohibited goods or persons and be able to put New Zealand on a sustainable platform for the future. We only have to look at recent incursions like the southern saltmarsh mosquito which cost $77 million to deal with over 12 years or didymo which cost $10 million in 2004 and the ongoing costs associated with didymo of around a million dollars a year and the Queensland fruit fly in Grey Lynn this year which is likely to cost around $17 million. This is why we have a multilayered biosecurity system that has continued to be strengthened.The Border Processing (Arrivals and Departures) Levy Bill makes important amendments to the Customs and Excise Act 1996 and the Biosecurity Act 1993. Amending these Acts means there will be a consistent approach to consultation implementation and administration of the levy. The Customs and Excise Act did not include a suitable provision to authorise a levy and the Biosecurity Act provides the ability for only a general levy-making provision. The overall effect of the bill is to impose the obligations to pay the levy and to provide that the detailed levy design be set out in levy orders after consultation.The detailed design will include for example when and how the levy is to be paid who is responsible for collecting the levy and the rate of the levy. It is likely that the cost for passengers arriving and departing New Zealand will be around $22 inclusive of GST—around $16 on arrival and up to $6 on departure—but further modelling and consultation with stakeholders and the wider public needs to be completed before the final amount is decided upon. Officials are preparing a discussion document outlining the proposed options which will be released for public feedback in June this year. It is proposed that the levy will take effect from 1 January 2016 and I expect it will be added to the price of tickets purchased on or after this date.The border clearance levy is just that—a levy. It is a payment by a specific group for a specific purpose—in this case border clearance functions and activities carried out in relation to the payers of the levy. Levy funds will go into a memorandum account and will be used only to pay for Ministry for Primary Industries and Customs Service border clearance functions. The fundamental principle behind the introduction of the border clearance levy is that it is fairer that the travellers who generate the need for these border clearance services and who benefit from them contribute to the cost of these activities.Many other countries have a passenger levy in place to cover these costs. At $22 the proposed border clearance levy will be set lower than in most other countries. Australia currently charges around NZ$58 and the UK’s long-haul passenger charge is almost around NZ$150. An additional charge of around $22 is unlikely to stop travellers coming to New Zealand. It is less than 1 percent of a long-haul international airfare which is a very small component of people’s overseas travel costs. Some biosecurity events could have a significant impact on tourism. In the UK during the foot and mouth disease events in 2001 the total tourism revenue dropped by almost £8 billion which if you equate that to today’s Kiwi dollars is around $15 billion.I am proud to bring this bill into the House because I have always said that biosecurity is my No. 1 priority as Minister. The primary industries are the backbone of the New Zealand economy and we must protect them from unwanted pests and diseases. The primary sector makes up around three-quarters of our merchandise exports. It is worth around $35 billion a year. It is the hard work of our farmers growers and fishers that helps us as a Government pay for things like schools roads and hospitals. We are fortunate that our isolation has helped protect us but we must always be vigilant and prepared for new and emerging risks. The introduction of this levy and the injection of almost $27 million from Budget 2015 into biosecurity will further strengthen the overall biosecurity system. It will go towards improving import health standards more detector dogs and more X-ray machines.Also in April this year I announced Biosecurity 2025 a project to refine our biosecurity strategy out for the next 10 years. This will be looking at how we can strengthen the overall biosecurity system to make it resilient in the future from the growing pressures of trade and the increase in tourism numbers as I have already mentioned. This bill is another important step in protecting our borders and I commend it to the House.Rino Tirikatene: Thank you Mr Speaker. [Interruption] I am pleased to be able to—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I have not even called the member yet mainly because I am getting some noise from Mr Bennett yet again. He is on a bit of a warning.RINO TIRIKATENE (Labour—Te Tai Tonga):I am pleased to be speaking in the first reading of the Border Processing (Arrivals and Departures) Levy Bill. Let me state at the outset that Labour is opposing this bill so be prepared for a long night ahead. We are opposing this bill because border processing is adequately funded from the Crown and there is no need to be imposing a travel tax on the good folks of New Zealand.Let us look at this. This is a travel tax that is going to be levied on every traveller every passenger families going on their trips and our important tourists whom we rely on coming into our country. It is a tax that will be put on everybody. For the privilege of leaving our shores folks will be paying an extra $22 for the round trip. The same applies to international visitors whom we want to welcome into our country. An extra tax is going to be put on them. This is one more tax that is being put on Kiwis and it is another broken promise—another broken promise from this Government.We have seen time and time again in this Budget the broken promises in terms of the imposition of taxes and this is yet another one. The Government is taxing Kiwis ordinary Kiwis who want to go on their trip overseas. It is taxing them when they go to see their loved ones. It is a broken promise. We may want to argue around the terminology. It is very clear—you might want to call it a border clearance levy but it is still a tax. It is a tax and even John Key cannot explain the difference. When John Key was asked he said: “Oh google it.” He did not even want to front up. But I tell you what—we did not need to google it. We just went to the Oxford Dictionary. And what does the Oxford Dictionary say? The definition of “levy” is a tax raised by levying. So whether it is a levy or a tax—“potayto” “potahto”; “tomayto” “tomahto”—they are all the same. They are all the same. Soccer football—they are both the same. This is yet another broken promise from this Government. The imposition of a tax is a broken promise.Let us spare a thought for the people in the New Zealand tourism industry because they are the ones who have been let down by this Government with this measure. They have had a casual Minister of Tourism who has just flip-flopped along trying to say: “Yes this is what I’m going to do for our wonderful tourism industry.” And what has he done here? He blindsided it. He blindsided the tourism industry. It had no idea this was coming. The Prime Minister was talking to the industry just a few days ago and it was completely blindsided by this.The irony is that the Prime Minister the casual Minister of Tourism has been advocating for and working with the industry to try to encourage major markets for our international visitors to bring down or eliminate their travel taxes. Yet now he is going against the work that has been going on in the New Zealand tourism industry in Australia and in the UK. He has done a complete about-face and he did not even have the courtesy to give a heads-up to the New Zealand tourism industry.Let us not forget that the tourism industry is the second-largest generator of foreign exchange earnings for our country—in excess of $10.4 billion. It brings in a lot and it knows that when the Prime Minister was asked about this he said that it will not make a blind bit of difference—not a blind bit of difference. How does he know that? Because just a few years ago he was trying to advocate on behalf of our industry to try to make sure that we can have a freer passage to bring down those travel tax costs for our visitors. So there you go—a flip-flopping casual Prime Minister. You know there is a Twitter handle going now. The Prime Minister flip-flops so much he has been called “Jandal John”—more flip-flops than Number One Shoes. That is what John Key is: “Jandal John”. If you look up that hashtag you can see all the flip-flops that this Prime Minister has done and there are plenty of them in this Budget. The tourism industry has been let down. The tourism industry has been incredibly let down.I want to move on and look at what this tax is going to be paying for. Of course we do want increased border protection bolstering our biosecurity systems. Everyone wants that. We like to see the little beagles at our airports and increased X-ray machinery. We like that.Hon Member: Who should pay for them?RINO TIRIKATENE: They are already paid for by the Crown. Crown funding has paid for that. And now the Government is passing that on to everyday Kiwis and everyone who wants to go on a flight overseas. If we look behind that what else will the tax be paying for? I want to mention four letters that you rarely hear about these days out of the Ministry for Primary Industries and the New Zealand Customs Service—JBMS the Joint Border Management System. Remember that? That was the great merging of the IT platforms between the Ministry for Primary Industries and the Customs Service.Hon Dr Jonathan Coleman: What does it stand for?RINO TIRIKATENE: Joint Border Management System—the JBMS. What we have seen is a failure of the Ministry for Primary Industries and the Customs Service to deliver on that system. It is 3 years too late and $30 million over budget and we still probably will not have it by the end of this year which is the due date. It has been put off it has been delayed it has been costly and it has been shrouded in secrecy. That is right. This Government has been trying to put a veil of secrecy over it because there is a major dispute. There is a major dispute going on with IBM the contractor. The Government has had crisis talks after crisis talks trying to work with IBM. A hundred million dollars has been tipped into this project and we still have not seen the delivery of a first tranche or anything. Risk and intelligence—what has been delivered under the Joint Border Management System for risk and intelligence? Nothing. Risk and intelligence are totally lacking.So what will this levy be paying for? What will people be paying this tax for? We need to know what the true cost will be because what we do not want to see is that this levy is just subsidising the Budget blowout of the Joint Border Management System. That is what this tax will be doing—subsidising the cost blowouts. We know that it is not just a cost recovery. It is not a simple cost recovery exercise because there is very broad discretion given to the Minister. Sure there is consultation that has to take place but at the end of the day it is at the very broad discretion of the Minister to set these levies.Once the taxes have been set there will be no end to what the greed of a Government and a Minister will show in terms of collecting revenue. It is a cash cow. Picking from travellers is an easy cash cow. Rest assured the Government will be using this to subsidise the big black hole—the $30 million black hole—we already have at the moment with the Joint Border Management System. That is the real scandal of this Government—that the people of New Zealand have invested $100 million into that system.Sure we have got a trade single window and people can import cargoes in terms of the freight industry but what about the core of that system? The core of that system was to modernise and have sophisticated new tools of risk and intelligence. What happens in that regard? What does the Ministry for Primary Industries and MAF Biosecurity New Zealand pull out of the Joint Border Management System? You never hear about it. It has been taken off the agenda because it is a disaster. It is an absolute disaster and this is just a cynical attempt by this Government to raise revenue to try to fill the huge black hole that has been created by that failed system. We are not going to be getting out of it. It is going to be getting worse and worse.This is a poor piece of legislation. It is another tax. We oppose it and we will oppose it all the way to midnight. Thank you.Hon NICKY WAGNER (Minister of Customs):I support this first reading of the Border Processing (Arrivals and Departures) Levy Bill simply because it will amend the Biosecurity Act 1993 and the Customs and Excise Act 1996 and will put in place a border clearance levy for arriving and departing passengers. I would just like to assure the member Rino Tirikatene that this money is only for cost recovery for border services and the money will be paid into a trust account ring-fenced only for border services.I would also like to point out to the member Rino Tirikatene that the Joint Border Management System is actually progressing very well that increasing numbers of exporters are using it that it has been well and truly supported by the industry and that we have just recently renewed—[Interruption]The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I apologise for interrupting the member but the member—[Interruption] Who was that?Hon Nathan Guy: Me.The ASSISTANT SPEAKER (Hon Trevor Mallard): Stand up and withdraw and apologise.Hon Nathan Guy: I withdraw and apologise.The ASSISTANT SPEAKER (Hon Trevor Mallard): I will now indicate to Rino Tirikatene that he must not wander around the Chamber interjecting. He can interject from his seat.Hon NICKY WAGNER: I just wanted to draw to the attention of the member Rino Tirikatene that the Joint Border Management System is doing very well that it is well supported by the export industries and that we have recently signed a renewed contract with IBM because it is doing an excellent job for us.Let me get back to the levy though. It is what this bill is all about. The levy will fund the costs of border processing—only border processing—incurred by the Ministry for Primary Industries and the New Zealand Customs Service. It will ensure that border services are sustainable. I think if we reflect that over recent months many of the Opposition members have been talking about increased security at our border and have been talking about increased biosecurity at our border I expect that members of the Opposition will be supporting this bill because this will make our border safer. As the Minister for Primary Industries has just said our success as a trading nation is about making sure that the risks at our borders are controlled and managed so that our economy can grow and prosper. As our travel and trade links expand and travellers entering New Zealand become more numerous and more diverse with them they bring increased risks. More passengers arriving and departing New Zealand from more locations means more risk—more risk to our security and to our biosecurity. The interesting thing here of course is that higher-risk passengers require higher levels of intervention which increases passenger clearing costs. If we cannot manage that growing risk the frequency of biosecurity incursions and harm from prohibited goods and persons will increase. New Zealanders do not want that.Demand for the Ministry for Primary Industries and customs border clearance activities has been steadily increasing over recent years. International passenger numbers have been rising at about 3.5 percent every year and forecasts are for even more than that. It is an increasing upward trend. What is more the numbers of people who are coming through our borders are increasingly international people. Whereas in the past large numbers of people coming through were New Zealanders now just over 40 percent of people coming through our borders are New Zealanders. The vast majority are international passengers. About 95 percent of the travellers cleared at the border are crew and passengers from commercial airlines. About 4 percent are crew and passengers from passenger ships—cruise liners and they are increasing—and the remaining 1 percent are from private aircrafts yachts cargo ships or the military.Up until now the New Zealand taxpayer has been covering the costs of all these services even though many of those travellers are not New Zealanders. In fact as I have just said significantly more are international travellers and many of them are coming on luxury cruises and on pleasure trips. It does not seem right to me that every New Zealander—man woman and child—is paying $23 whether they cross the border or not. That is a tax whereas this is a levy that the people requiring the use of the services and the people bringing the risk will be paying. The levy will be funded to maintain existing service levels and the current high level of risk management. Many other countries have a passenger levy. They have got it; it is international best practice now to do that. In our case ours will be about $20 give or take and it is really on the low side. What we are seeing is that overseas countries have much more. Australia has A$55 or NZ$58. The UK’s long-haul fee is £71 or about NZ$150 and Canada and the US are similar.This Border Processing (Arrivals and Departures) Levy Bill makes important amendments as we have said to the Customs and Excise Act 1996 and the Biosecurity Act 1993. The reason we have to do that is that the Customs and Excise Act does not currently have a suitable provision to authorise a levy and the Biosecurity Act provides for only general levy-making provision. Amending these Acts will make sure that we get a consistent approach to consultation implementation and administration of the levy.Carmel Sepuloni: Consultation?Hon NICKY WAGNER: Implementation and administration of the levy.The Border Processing (Arrivals and Departures) Levy Bill also includes provisions that allow Orders in Council to be made for the levy’s administration including the rate of the levy the basis on which it is set and how the levy is to be paid. The levy will take effect on 1 January 2016 and it will be applied to tickets purchased on or after that date. It is proposed that the border clearance levy will be set at different rates for arriving and departing passengers. That reflects the differences in clearance costs because I remind you this recovers only the clearing costs and what happens at the border. So this will reflect the differences in clearing costs between people arriving and people departing. The total costs for passengers arriving and departing will be about $20 inclusive of GST—about $16 on arrival and up to about $6 on departure—but this will be teased out during the consultation phase. The cost of processing arriving passengers is higher because there is no biosecurity screening at departure and the level of customs resources and intervention at departure is less.Stakeholders and the general public will get a chance to have their say about this levy about its design and about its implementation and the details will be consulted on. Officials are already preparing a discussion document that will outline proposed options and that will be released for public feedback in June.The intention is to make the border clearance levy simple and easy to collect. It is proposed that the existing payment systems are used to collect the levy. The airlines will make a monthly lump-sum payment to the Civil Aviation Authority and cruise ship operators will pay the Customs Service. The funds will then be allocated to the Customs Service by the Ministry for Primary Industries. For other travellers such as people on private yachts and airlines the levy will be collected from them directly as they enter and depart New Zealand. The border clearance levy is less than 1 percent of the international airfare so it is a very small component of people’s overall travel costs. The additional charge of about $20 is very unlikely to have any bearing on the traveller’s choice of destination.The people of New Zealand told us that they want a safe and secure border. This bill will protect New Zealanders and will protect our environment. I commend the bill to the House.Hon ANNETTE KING (Deputy Leader—Labour):This debate is about the Border Processing (Arrivals and Departures) Levy Bill. The first question I would ask this House is: when is a levy a tax? When is a tax a levy? And when is a tax not a tax? Well we found out today that we know when it is and when it is not: it is when the Prime Minister says so. That is when it is a tax and when it is a levy. [Interruption] For the member opposite sitting at the back who immediately interjected a tax is raised by a levy. This is a levy and it goes to a tax.This is a tax. Make no bones about it—this is a tax. For the listening public and the people in the gallery tonight here late in the day on this Saturday afternoon this Government is forcing through under urgency a new tax on New Zealanders. This debate is all about a brand new tax—never mentioned never canvassed. I have to say the old saying of “No taxation without some representation”—no representations were made to the Government to bring in this new tax. It is just a very sneaky little manoeuvre passed under urgency. That is why we will oppose it. We will oppose it because it was not a tax that was ever canvassed with the public of New Zealand. Did the National Party go to the electorate and say: “We are going to raise a new tax. We are going to put it on travellers arriving and departing—on New Zealanders and on foreigners.”? No it did not. This is a very sneaky sneaky little tax.I have to say I am particularly disappointed in the Minister of Tourism who happens to be the Prime Minister because he was at a tourism conference 2 or 3 days ago. Did he mention that he was going to bring in a tax on their industry? Their Minister—their own Minister—goes and speaks at a conference. “Jokey John” was there.Kelvin Davis: “Jandal John”.Hon ANNETTE KING: It was “Jandal John”. He was there. He was there with the jokes and the smiles and the laugh. Did he tell them that he was going to bring in a sneaky little tax and pass it under urgency on a Saturday afternoon? No he did not. He did not raise it and he never gave any—any—indication at all to a very very important constituency.The Nats want this debate out of the way as fast as possible because they know—they know. They came to us and they wanted us to agree with it and to get it out of the way as fast as possible for one reason: they are embarrassed. They are embarrassed because they are bringing in a new tax and it is being brought in by a Prime Minister who can perform gymnastics with the truth. He can do the double backflips on anything he likes and we have got plenty of examples. “No new taxes.” he said so he raised GST. “No new taxes.” so here tonight at 10 past 5 he sneaks in a border tax on New Zealanders and on foreigners. He breaks his promises like he breaks his eggs into the pan in the morning. He could not even deliver on the promise to give New Zealand a panda. That is how many promises he breaks.Yesterday Mr Key was asked what the difference was between a tax and a levy. When asked the difference between a tax and a levy the Prime Minister’s answer was: “Many”. When he was asked again he said: “Google it.” Then when asked a third time he said that he could answer it: “… but I’m not going to bother.” “I’m not going to bother.” and that is a quote. The Prime Minister could not bother to tell New Zealanders what this was all about whether it was a tax or a levy or why we were having it. He just could not be bothered. I have to say that having claimed that many times—like one of those biblical characters who did it three times—he said it was for biosecurity. He finally said it was for—[Interruption] That was Judas if you wanted to know. The Prime Minister said it was for biosecurity.Well let us look at the Government’s record on biosecurity and at the hopeless hapless Minister it has got who is the Minister for biosecurity. He has been hopeless in this position. He has let more insects and bugs into this country and put more things under threat than any other Minister in the history of this country. He cut the staff and he cut the funding and now he wants to replace it by putting a levy on New Zealanders. What a sham. If it were really about biosecurity Mr Minister why not increase the levy on the ports and on containers? That is where you find most of your biosecurity risk not the odd person who might inadvertently have an apple in their bag—in fact most of them are caught because they go past one of the sniffer dogs. It is in your containers and over your ports so why not increase that levy? Oh no there is no answer to that.This bill is a sneaky attempt to grab money from hard-working Kiwis who want a holiday. In its own documents the Government says the most hard hit will be those going on short-term trips across the Tasman. For New Zealanders probably the only trip that they can really afford is going across to Australia and so they are the ones who are going to be mainly hit. What has been the reaction once they found out that this sneaky little tax was going to be introduced into this House? Air New Zealand said it was very surprised. It said that it will add to the cost of the ticket. Then it asked a very good question and I hope that the Minister can answer this question. If it is really about biosecurity it asked what biosecurity or customs risk do New Zealanders who are leaving New Zealand pose? What is the biosecurity or customs risk that New Zealanders who are leaving pose?Hon Nathan Guy: That’s the immigration process.Hon ANNETTE KING: No. The big argument Minister is that it is for biosecurity. Your Minister Nicky Wagner who just sat down—she talked all about biosecurity. So tell me what is the risk in someone taking their bag and going to another country? What is the cost of a departure because this is imposed not only on people coming into New Zealand but also on departure? The airline industry which probably knows a little bit about people coming and going actually asked that question Minister. I hope tonight when you get into that chair—Hon Nathan Guy: I’ve answered it.Hon ANNETTE KING: Well you can sit in the chair and answer it properly instead of just yelling across the House. The airline industry wants to know why it is going to be charged on people leaving New Zealand.Let us see what the Board of Airline Representatives of New Zealand said. It said that the tax was “in breach of an understanding reached between the Government airlines and the tourism industry in 2003”. Did the members opposite know that there was such an understanding—that there was an understanding that has been in place since 2003? It was honoured for all the 5 years of a Labour Government but broken like its promises by this Government. It breached an understanding which means that its word is worth nothing—it is worth nothing—when an understanding is made. The Government announced this; it did not consult on it. It did not say: “We’re going to do this.” National has brought it in and it has breached an understanding between the Government the airlines and the tourism industry. You cannot trust those members.The airline representatives also said they were “disappointed that the Government itself would harm the tourism industry.” That is what they said. They are surprised that the Government itself would harm their industry—a $10.4 billion industry. Tourism New Zealand—what did it say? It said that taxes imposed in other countries had had an adverse effect on travel. Now let me go to the final point that I want to make. In December 2011 the British Government announced an increase in departure tax for air travellers to New Zealand. The Prime Minister went to Britain. He “slammed the decision” saying it would place “a significant burden on New Zealand businesses on families who travel”. He said that it was a “tax” and he said it was “discrimination on the basis of distance”. That was said by the Prime Minister in 2011. He opposed this passenger tax in Britain. He flew there at the taxpayer’s expense—he flew there at the taxpayer’s expense.Hon Nathan Guy: It’s $150.Hon ANNETTE KING: I do not care how much it is Mr Minister. It is the principle—the principle. The principle—it is a tax and our Prime Minister flew to Britain to oppose it. He flew there to oppose it. He got headlines in the media. He got on the front of the television news because he said it was discrimination. Well I will tell you Mr Minister what it is. It is a double standard and it is what we expect from the National Party. Those members make promises that they break on a daily basis. They say: “No new taxes.” and they put in new taxes—the biggest one of course being increased GST which hurts the people who have the least in this country. Then tonight they are sneaking in a tax that they never consulted on. They have no right to bring it in.IAN McKELVIE (National—Rangitīkei):Well the last speaker Annette King certainly showed up her leader. She got more words out in 10 minutes than he got out in 20. Unfortunately that speech was about as factual as his speech was the day before yesterday. I just need to point out a few facts in the process of supporting the two Ministers who have spoken before me on the Border Processing (Arrivals and Departures Levy) Bill. For a start a levy is a levy a rate is a rate and a tax is a tax and clearly the Labour Party has not worked that out. Secondly the Government is charged with running the country. The Labour Party has clearly forgotten that it had a turn at doing that a while ago and did not do much of a job of it.The issue we have got here is that we have a large number of people coming into this country demanding a service of this country and creating a threat to this country in that we need to protect our border at all costs. We now have some 5.2 million people coming here annually. Well over 55 to 60 percent of those people are foreign visitors coming to this country. We have seen from the fruit fly just very recently in Auckland that there is significant risk to New Zealand.I just want to make a couple of other points before I finish. Firstly the taxpayers of New Zealand have been paying for this service for a long time. The average taxpayer in my electorate never leaves this country. The interesting thing about this is that most of the people who use this service are people who can afford to pay for this service and consequently I think there is a very fair way of allocating a levy or a charge to achieve a result for this country that will be much better than what we have seen before. It gives us some security it gives us a permanency of payment and it alleviates the need for a large number of New Zealand taxpayers who never use or have an interest in this service to contribute to it.One other point I want to make in this debate is that this country is significantly tested around infrastructure by the large number of visitors we have to this country. I think it has been pointed that some 5.2 million people came to the country last year. In my electorate I have a couple of little towns Sanson and Bulls. Some 14000 vehicles a day go through those towns. Those local ratepayers or taxpayers have to pay every bit of that bill. I think this is just another case of exactly that sort of thing going on. I have a great deal of pleasure in supporting this bill. Thank you.The ASSISTANT SPEAKER (Lindsay Tisch): I call James Shaw. Before the member starts with the barracking across the cross benches it is very difficult to hear. So please give some courtesy to James Shaw.JAMES SHAW (Green):We seem to be starting this bill where we left off with the Telecommunications (Development Levy) Amendment Bill with some rather cunning linguistics. When is a tax a tax? When is it a levy? When is a levy a tax? When is it a rate? “What’s in a name? That which we call a rose by any other name would smell as sweet;”. That is where we started yesterday with the telecommunications legislation—was it a tax was it a levy? Actually who cares? Who cares what the language of it is. It is revenue that the Government needs to charge to cover its costs.The Green Party has never been particularly afraid of this notion. When the Government wanted to reduce and did reduce the top income tax rate and reduced the Government’s revenue by about a billion dollars a year which has led to record deficits and an inability to cover its expenses we argued against that. It is OK. Sometimes you have to raise taxes in order to cover your costs and the Government is doing that. It likes to pretend that it is not by calling it something that it is not. But actually we know it for what it is. We commend the Government for raising the revenue that it needs to raise in order to cover the costs of running the country. That is completely fine. Bill English has raised or extended any number of taxes. The Government has raised GST it has raised the petrol tax it has removed the paper boy levy and it has put a tax I think on private jets. Yesterday we extended an existing tax which is the telecommunications development tax—ah levy rate.Hon Members: Ha ha!JAMES SHAW: I am sorry. I am just pulling your ponytail. Whether it is a matter of double standards or broken promises that is OK. It is a National Government. We expect that.Let us talk about the substance of what this is about which is to raise revenue to cover the costs of biosecurity and customs. The purpose of this bill is to introduce international passenger levies which will be used to fund the costs of biosecurity and border control relating to imported pests diseases illegal drugs and contraband. The measure is expected to raise about $100 million a year. These are costs relating only to international passengers not to goods and freight which are already covered by other border levies taxes and rates.The Green Party is supporting this bill. We think that it makes sense for a number of different reasons. First of all it takes a cost of the industry essentially of the tourism industry that has previously been externalised to the New Zealand taxpayer and it internalises that cost back into the industry. That cost has been borne by the public at large through general taxation previously. The benefit of course comes back to the economy through international tourism and so on but this is a much more direct and transparent way of making that cost apparent. Also given that a significant number of the people who will be charged this tax levy and rate are foreign tourists to New Zealand we are managing to raise additional revenue from people who are visiting this country as opposed to the New Zealand taxpayers.Secondly we have and I have criticised the Government for a habit of corporate welfarism in the past which is to use general taxation to hand out to industry players in general. Both with the telecommunications development levy and this one this is a much more direct and accountable way of raising these revenues and internalising those costs that are otherwise externalised. So we think it actually increases transparency and accountability to do it this way.Another reason we are supporting it is that it ties revenue to actual numbers and actual costs. So as passenger numbers increase or decrease the amount of revenue will track directly to that and therefore costs will expand and contract based on actual passenger numbers whereas there is some inefficiency if you do it just from general taxation. The costs are borne by travellers in this case like I said many of whom are international guests to the country and all of whom are generally people who can absorb this cost. As one of the Ministers who spoke previously to the bill said this will account for less than 1 percent of the total cost. If you are paying $1000 to come and visit New Zealand another $36 on top is not actually going to make that much difference. Most other countries have airport taxes in place. I lived in the United Kingdom for most of my career most of my adult life and the airport taxes there—to go in and out of Heathrow will cost you something in the order of NZ$142 and in Australia it is about $58. So our $36 in and out charge is actually pretty reasonable.The Green Party has in the past called for the use of airport taxes to fund the Department of Conservation estate. Given that the vast majority of international travellers to New Zealand are people who are coming to look at the conservation estate and to take advantage of it that would be a direct way of helping to fund the cost of the tourism industry on the conservation estate. Also the cost of promoting essentially the conservation estate is borne in large part by a number of local authorities. There is some room to expand this in the future. Given that the levy that has been suggested here of around $36 is a pretty low rate there does seem to be some room in the future to bring that up to the median rate of airport taxes around the world which could be used for those other purposes as well. So it sets a precedent to create some other opportunities in the future.I understand that the industry has a number of concerns and again because we are sitting under urgency we are unable to have those voices represented either for or against the bill through the select committee process. That is unfortunate as with all bills under urgency. Horticulture New Zealand has said that it is for this because obviously it is deeply concerned about biosecurity incursions. Because biosecurity funding was cut some years ago by this Government there have been an increasing number of incursions. The cost to the economy of that is really substantial. So what this bill does is it restores some of the funding that was previously cut and I can understand why Horticulture New Zealand would be keen on strengthening our biosecurity.Air New Zealand Auckland Airport and New Zealand Airports Association are obviously not in favour of this bill and I can understand why. They have some concerns that it will affect our international competitiveness. It would be great if this was not an urgency debate and if we did have a select committee process where we could hear some evidence for and against that. I understand the industry concerns there. There are passengers who are price sensitive. My gut feeling is that a tax of less than 1 percent of the cost of travel is something that passengers can cope with and that it will not significantly affect our international competitiveness. Flight Centre has come out and said that it is pretty ambivalent about it. Its concern would be if the people who are being charged were not getting the benefit of this. So it has some concerns as well. I just wanted to represent those concerns in the absence of a select committee process.Having said all of that we do have a couple of concerns one of which is that the cost of this is both biosecurity and customs and some of it is revenue. It is $100 million of revenue estimated. Some of this revenue is going to go to upgrade our border security and customs including new technology X-ray machines and so on. We have some caution around the use of this money for new technologies that may invade personal privacy and we would like to hear from the Government side where that money is going and what kinds of new technologies it is looking at expanding that into. The upside is that I understand they are bringing back beagles. Everyone loves a beagle. We are going to see some puppies back at Auckland Airport which is great. Also there are some concerns about the extent to which the biosecurity money is simply topping up what was previously cut as opposed to actually extending the biosecurity regime as well. So we just want to hear a bit more of that sort of information.Having said that we do not like the fact that this bill is going through under urgency. We cannot see why it is an urgency bill. There does not seem to be anything particularly urgent about it but then there has not been anything particularly urgent about any of the bills that have come through over the last few days. We are not happy about that.We do have some concerns about privacy and about the use of the money for biosecurity. We do want the voice of industry to be represented if it has concerns that it does not feel have been adequately represented. But for all of the other reasons I stated we will be supporting this bill in the House. Thank you.RICHARD PROSSER (NZ First):I am very pleased to rise on behalf of New Zealand First to take a call in the first reading of the Border Processing (Arrivals and Departures) Levy Bill. This is a bill that New Zealand First would very much like to be able to support. At the moment we do not—or rather we cannot—support it because we have some questions and some concerns that are yet to be addressed and answered. I certainly hope that as the bill passes through the stages of urgency a Minister or Ministers or Government members take the opportunity to address these concerns and give us some answers. I notice that the Minister of Customs has already filled in a couple of details that I was not previously aware of so that helps to fill in the gaps. Yesterday the Rt Hon Winston Peters referred to this bill as the “Holiday Tax Bill” and that is one of our primary concerns. We are very concerned that in fact this may be nothing other than a holiday tax bill and I would like the Minister or someone else to reassure us that it is not.New Zealand First has called long and loud and often for better resourcing for biosecurity. We understand just how vitally important biosecurity is for the primary sector. We know full well how important the primary sector is to the entire economy and to our way of life. There is an awful lot riding on it and for that reason we have often and loudly called for better resourcing for biosecurity. If indeed this bill does constitute better resourcing if it does mean more money if it will mean more boots on the ground and if it will mean more sniffer dogs and more X-ray machines then those are good things that we will support wholeheartedly.I am a little bit concerned that Minister Wagner talked about cost recovery. That sort of raises a bit of a flag for me that perhaps this is not additional money; perhaps it is just shifting the revenue stream from one source to another. That is one of our concerns. If the Ministers can demonstrate how this levy is the best way to achieve an increase in resourcing for biosecurity and do so convincingly then we will be supportive of that as a move. But as I said at the moment we do not because there are still too many questions unanswered. There is too little in the way of detail and explanation in the bill itself and in the Government’s supporting material—its publicity material. There are some elements of that that are kind of ambiguous. There is material in the departmental disclosure statement for example that seems to be at odds with some of the Government’s publicity material and it would give us great confidence if the Government was prepared to address these matters as we go through the stages and hopefully persuade us that our concerns are not founded.I say that because if it does not then there is actually no other way in which this bill is able to be examined or explained because this bill like the others we have been debating since the Budget is being pushed through under urgency so there is no select committee process. There is no opportunity for the public to make submissions and no opportunity for industry for the primary sector to make submissions and no opportunity for anybody who is going to be affected to ask questions and to have input. That is the nature of urgency. When we move into urgency and pass legislation under urgency what we are essentially doing is suspending the normal constitutional processes of this House and of the country. It is not something that we believe should be done lightly or indeed often.But it does seem—certainly in the short number of years I have been in this House—to be becoming something that this Government is tending to do more and more often with greater frequency. Also it seems to me anyway that there is less and less in the way of justification. The day before yesterday when the Leader of the House was advising us why this bill would go through under urgency he said: “The Border Processing (Arrivals and Departures) Levy Bill is being introduced because demand for border clearance services is increasing due to the number of airline and cruise ship passengers—”Grant Robertson: What? Over the weekend?RICHARD PROSSER: —yes—“arriving in and departing from New Zealand. This is expected to grow by some 3.5 percent annually for the foreseeable future and we simply need to have the users of the services that we provide to protect our borders paying for them. This bill requires Customs and Excise Act and Biosecurity Act changes because they do not currently provide the facility to collect that levy. Urgency is necessary to allow for a period of consultation on the design”—meaning the design of the levy—“post the passing of the bill which is the process that needs to be used. Thank you.”So according to Mr Brownlee urgency is needed because this is the process that needs to be used. So it is “just because”. Well “just because” is hardly an explanation for why the nation’s normal constitutional procedures are being sidelined. This is really a case of the Government saying to the Parliament: “Just sign this blank cheque and we’ll fill in the details later. Trust us. You don’t need to know.” So we have to ask why and we would really like some explanation and some clarification around that.This is only a levy-setting bill or a tax bill or a bill that authorises a fee or a rate—some money being paid. All it is is a bill that authorises a levy. We are not going to war. We are not declaring a republic. We are not changing the flag. I promise you we are not changing the flag—believe you me that ain’t happening—and we are not responding to some sort of natural disaster. We are applying a fee to passengers arriving and passengers departing and that is all. I fail to see how anything to do with setting a fee can be so crucial that we have to rush it through under urgency and dispense with normal procedure. But we will of course. The bill will go through with our support or not because the Government has the numbers. The ACT Party—all of him—will happily bend over in any direction the Government wants because he does not want to bite the hand that feeds him and United Future will also be compliant. That is just the way he has become. I recall a politician a member of this House from long ago who used to refuse on principle to support any legislation that was going through under urgency. That man was Peter Dunne. I wonder what ever became of him.So this bill will go through and we will have the opportunity to ask the Minister and the Government some questions about it. We will seek to have a number of matters clarified and if our concerns can be satisfied then I say to the Ministers that we are capable of having our minds changed by way of sound reasoning and we may well yet consider giving our support to the bill. Thank you.STUART SMITH (National—Kaikōura):In response to the previous speaker’s questions around costs 55 percent of the visitors who come to New Zealand are visitors from offshore and therefore the tax or the—[Interruption] It is not a tax; it is a levy and the levy will cover the costs and take the load off our taxpayers as it should. I commend the bill to the House.The ASSISTANT SPEAKER (Lindsay Tisch): I understand that this is a split call.Iain Lees-Galloway: I understand that too Mr Speaker.The ASSISTANT SPEAKER (Lindsay Tisch): OK. Iain Lees-Galloway—5 minutes.IAIN LEES-GALLOWAY (Labour—Palmerston North):Finally we have confirmation from the member Stuart Smith that this is indeed a new tax. It is appropriate—Hon Member: One honest National Party member.IAIN LEES-GALLOWAY: Yes we have found the honest National MP—he will not go far. We have sat through this Budget legislation over the last 3 days and many of us have been in the House for a lot of that time. The culmination of the legislation that has been passed through this House demonstrates to New Zealand that this is a Budget of broken promises and sneaky taxes.It is so appropriate that this bill is the finale because this is a bill that passes not only a broken promise but also a sneaky tax. You may be wondering how it does that in light of National’s promise at the last election. The sign I am holding says: “No new taxes”. Read my lips—no new taxes. That is what the National Party members promised to the people of New Zealand at the last election—no new taxes—yet that is exactly what they have done. They have brought legislation to this House in this Budget and introduced a bevy of sneaky little taxes because they cannot find a way into surplus.I will give them points for sincerity though because it says at the top here: “A strong economy means” and then “no new taxes”. So fair enough—they cannot build a strong economy. They have not got the faintest idea how to build a strong economy so that is why we have ended up with a bevy of sneaky little taxes and broken promises. This legislation is all about broken promises and sneaky taxes.I am very concerned about the inflation rate on this tax. When Nicky Wagner and Nathan Guy announced it just a couple of days ago it was going to be around $16 for people coming into the country and $6 to leave—Hon Nicky Wagner: No no.IAIN LEES-GALLOWAY: Do not disagree with me Nicky Wagner because it came from your press release. If you think I am wrong check with the communications team to make sure that your messages are getting through. So she said it would be about $16; today it is $20 or thereabouts. Nicky Wagner is looking confused. Read the Hansard of your own speech Nicky Wagner because this is what you said. It is already $20. That is a 25 percent increase in just a couple of days.This tax is going up faster than Auckland house prices and that is a scary thought. But hey maybe it is not a tax. Maybe Stuart Smith was wrong—no he was not. He is right. He is right—it is a tax. But if we accept for just a second National’s line that it is actually a levy that does not instil an awful lot of confidence because we know what National does with levies. What does it do with the ACC levies? It keeps them artificially high so that it can try to get the books back into surplus. So maybe the fact that it has gone from $16 2 days ago to $20 today to goodness knows what when it is actually implemented is actually about the Government’s plan to build up and overcharge on yet another levy so that it can try to get the books into surplus.We know what this is. It is a departure tax. I want to advise the Government members that we used to have a departure tax at Palmerston North Airport and the people hated it. The people absolutely hated it. They are going to hate this and they are going to see right through it. They are going to know what this is. This is just another broken promise and another sneaky tax from this sneaky National Government.The ASSISTANT SPEAKER (Lindsay Tisch): I call Steffan Browning—5 minutes.STEFFAN BROWNING (Green):We will be supporting this bill. We see that this sort of user-pays method to fund some aspects of biosecurity and customs processing is appropriate. But this levy is no magic bullet.Iain Lees-Galloway: It’s a tax.STEFFAN BROWNING: It is a levy. It is a tax. It is a whatever. It is a source of income for these processes at the border. It is just a fraction of what is needed for biosecurity. We will be speaking obviously at another time on the total budget for biosecurity. The Government has added—supposedly added—only about $25 million to biosecurity and that is a very very concerning thing. This is just another revenue source. The $100 million that is anticipated in 2017-18 is only a source to basically cover the limited amount that is being used already out of other revenue streams. Biosecurity at the border needs a lot—a lot—more money.I have put it to the Minister for Primary Industries that even if you used 50 percent of what you are going to get from this new income stream and added it to existing biosecurity money it will still not be enough for biosecurity. Think of the fruit fly. How did it get in this last time? Previously up in Whangarei we thought it was probably by a yacht and then another time another yacht possibly. Are these people going to get taxed? Is someone going to be tapping them on the shoulder to pay their levy? I hope so.Hon Nicky Wagner: They are as they come in as they clear customs.STEFFAN BROWNING: Yes so is the Customs Service going to be there for these stray yachts—waifs and strays—as they come in to inspect them properly and to gather their tax? I hope so because they need to be paying their part of it.However then we had the Auckland incursions the more recent ones. What has that cost so far? And it is not over yet. We have to wait until spring to see whether there is a re-emergence because it was not nipped in the bud quick enough. Worse these Queensland fruit flies actually got in here and were able to sit in New Zealand and breed for at least one generation and by the look of it there was more than one generation of breeding in New Zealand because we did not nip it in the bud. Is this levy/tax going to do the job? No it is not. It is just going to make sure that some of those people who could have been responsible are going to be paying their way.Back in the mid-1990s even when HortResearch looked at the potential cost of the Mediterranean fruit fly—a good proxy for the Queensland fruit fly—the cost for the Bay of Plenty should it get going there was $820 million and a cost basically of 3500 jobs. In the Hawke’s Bay it was $390 million with over 3000 jobs lost and in the Nelson area it was $265 million with close to 2000 jobs lost. It is critical that we do biosecurity to the nth degree and do way way better than we are doing at the moment.I would actually like to pat the Minister Nathan Guy on the back. I have been watching biosecurity very closely well before I was in Parliament and right through to this time. Unfortunately in 2008 when National got in there were significant cuts to biosecurity in this country. There was an immediate loss of almost 60 jobs and I think a year or so later there were another 200 jobs down the gurgler in biosecurity. Importantly many of these were on the front line. What we have been seeing is an incremental increase and repair to that. I will speak further on this in a later speech. Thank you.TODD BARCLAY (National—Clutha-Southland):I support this bill.DAVID SHEARER (Labour—Mt Albert):That was an excellent speech—an excellent speech. This is a tax. We know it is a tax. Government members might pronounce it “levy” but it is spelt t-a-x—tax. That is what it is that is what the Oxford Dictionary says it is and that is what it really is. Why does the Government not just front up and admit it? The reason it does not want to front up and admit it is that at the last election the National Party promised not to put up taxes. It also promised to get us back into surplus. The whole murky tangle of web is all around this. This is about trying to narrow down the deficit by putting through these sneaky taxes and cutting our KiwiSaver kick-start contribution. Those are the things that we see so transparently that the Government is doing in order to get us back into surplus. The National Party said no new taxes; this is a tax.Why is it that we are sitting here on Saturday night putting through a bill under urgency when there is nothing on the Order Paper? The Order Paper is empty. In a few weeks’ time Gerry Brownlee will stand up at the beginning of Parliament and say: “There is nothing to do today.” because there actually is not very much to do. Why are we sitting here under urgency? The only reason is that we do not want to give New Zealanders the opportunity to sit down and debate this. Why would New Zealanders want to be coming in front of a select committee? Because they would point out to the Government in front of the media day after day after day that this is a tax. It is not a levy; it is a tax.There is no secret as to why this Government needs to lift its game when it comes to biosecurity—not if you live in the Mt Albert electorate which I live in. It is currently infested with Queensland fruit fly. Maybe some of the money that it raises can be used to compensate the fruitgrowers and the shopkeepers in my electorate because they have suffered by most calculations of the supermarkets there 50 percent in terms of lost revenue from the sale of fruit and vegetables. They have been infested because this Government has taken its eye off biosecurity. There is nothing more important to the economy of this country than biosecurity. Steffan Browning said it before and I totally agree with him but he got his numbers a little wrong. It was 91 front-line staff who were cut in 2009—91. We stopped X-raying a lot of bags. We cut back on the number of dogs that were checking baggage coming into our airports. And the result is that we have had two outbreaks of Queensland fruit fly and one of them is still alive and active. That is a desperate and wanting policy and that is why this Government has to step up and really put some money behind it.But that is not the end of the problem—that is not the end of the problem. The other part of it which my colleague Rino Tirikatene pointed out is the JBMS. That is a shocker. The JBMS is the Joint Border Management System. It was supposed to revolutionise everything coming into New Zealand. Well it has failed. In 2010 it was on the books costing $75 million. In 2013 it had jumped to $90 million. In 2014 it was up to $104 million and it is still not doing what IBM which is the main contractor said it was going to be able to do. I would like to ask Nicky Wagner when she has a chance later on in the Committee stage to stand up and say: “No we are definitely not taking IBM to court.”—we are not taking IBM to court—because there is a very big rumour around town that IBM is under the gun and is going to be taken to court. This smells and tastes like Novopay and that is another reason why this Government has to bring out another tax—another tax—to try to cover the books.This is a disgrace. The biosecurity has let in more pests in the last 2 years than in any other time in our history and the Joint Border Management System and the customs system is falling over and costing this country millions. This is a tax a tax a tax and let us not forget it. Thank you.BARBARA KURIGER (National—Taranaki - King Country):I am in favour of this bill. Thank you.A party votewas called for on the questionThat the Border Processing (Arrivals and Departures) Levy Bill be now read a first time.Ayes 73New Zealand National 59; Green Party 10; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 40New Zealand Labour 28; New Zealand First 12.Bill read a first time.Second ReadingHon NATHAN GUY (Minister for Primary Industries):I move that the Border Processing (Arrivals and Departures) Levy Act be now read a second time.The ASSISTANT SPEAKER (Lindsay Tisch): It is a levy bill not an Act.Hon NATHAN GUY: I move That the Border Processing (Arrivals and Departures) Levy Bill be now read a second time. As I outlined to the House earlier this levy will fund the costs of border processing incurred by the Ministry for Primary Industries and the New Zealand Customs Service and ensure that border services are sustainable.The Ministry for Primary Industries and the Customs Service together spend around $100 million a year on border clearance for passengers and crew. In the past these costs have been met by taxpayers. It is worth noting that around 55 percent of arriving and departing passengers come from overseas and therefore do not contribute directly to the costs of our border services. The Government considers it is fairer for these costs to fall on passengers travelling internationally.Our borders are dealing with increasing volumes. Arriving air-passenger volumes have grown by more than 18 percent from 4.4 million in 2009 to 5.2 million in 2014 and are expected to continue to increase by around 3.5 percent per year. The levy will help ensure our border processes stay fit for purpose into the future.It is likely that the total costs for all passengers arriving in and departing from New Zealand will be around $22 inclusive of GST but further modelling—[Interruption]—in consultation with stakeholders if members opposite would listen and with the New Zealand public needs to be completed before the total amount is confirmed.Officials are preparing a discussion document outlining the proposed options which will be released for public feedback in June. The levy is proposed to take effect on 1 January 2016 and will be applied to tickets purchased on or after that date. Around 95 percent of travellers cleared at the border arrive on commercial airlines about 4 percent come on cruise ships and the remaining 1 percent come on private aircraft yachts cargo ships etc.This announcement is part of a range of measures in Budget 2015 to improve security and services at the border involving immigration customs and biosecurity. The Ministry for Primary Industries and the Customs Service have already been working closely together to make improvements at the border sharing their facilities cross-warranting of staff enhanced profiling targeting of incoming passengers and the use of automated systems such as SmartGate.The introduction of the Border Processing (Arrivals and Departures) Levy Bill will put border services on a sustainable footing by allowing funding to increase as passenger numbers rise which is fairer and it will be more responsive to managing the risks at the border as well as providing quality services. I commend this bill to the House.RINO TIRIKATENE (Labour—Te Tai Tonga):Kia ora Mr Assistant Speaker. I am pleased to speak at the second reading of the Border Processing (Arrivals and Departures) Levy Bill. Ordinarily a second reading takes place after the bill has been referred to select committee and has received public submissions and viewpoints from the industry and from all around affected persons. That is the path that this bill should be taking but unfortunately here we are on Saturday approaching 6 o’clock and we are now into the second reading of a bill that this Government has admitted is a tax. I would like to acknowledge Mr Smith for telling the truth and acknowledging that this levy is a tax. So thank you Mr Smith for that. I am sure you will progress really well amongst your team. Good luck to you.This is a tax and unfortunately it is a slap in the face for New Zealand’s tourism industry. It is the second-largest foreign-exchange earner for our country: over $10 billion in earnings is generated by the tourism industry. What was the tourism industry told about this? What was the tourism told about this—absolutely nothing. And who is its Minister the Minister of Tourism? That is right “Jandal John”—“Jandal John” flip-flopping all the time. Just a couple of years ago he was trying to advocate to bring down these taxes so we could actually have open transfer and facilitation of tourism travel. But no what has he done? He has absolutely thumbed his nose at the industry and absolutely gone contrary to all of the work that it has been doing. It has been outlined in the 2025 strategy of the New Zealand tourism industry. A lot of work has been going on in terms of promoting freer flow of tourists and what we are seeing is the opposite. This bill will actually be doing the opposite. It is just an attempt by this Government to collect more revenue by targeting travellers—ordinary Kiwis ordinary folks and all of our international visitors who want to make a trip to New Zealand.But there is a cost to this. There is the assumption that yes we have got a free flow of visitors but if you look at the trans-Tasman market for tourists there are a million empty seats on those flights every year. It is a highly priced competitive short-haul flow of aircraft and so it puts a lot of pressure on the travel agents the airline industry and the like.Sitting suspended from 6 p.m. to 7 p.m.RINO TIRIKATENE: As I was saying before the dinner break the tourism industry has identified the actual benefits from lowering or having no travel taxes imposed. It has been working very closely with our Australian counterparts. There are a million vacant seats—unused seats—on those routes and the tourism industry research said that there could possibly be a 13 percent yield in benefits from maintaining or having lower or no travel taxes imposed. But what has this Government done? It has actually done the complete opposite and we are now imposing our own travel tax.The other point I want to make is around what the proceeds from this travel tax will be going towards. As we know they are going towards protecting our borders and biosecurity. Basically this is an admission from this Government that its border management has been underperforming. This measure is an admission of that and what we have seen are the incursions of fruit flies and other nasty organisms that pose a real threat to our primary industries especially. This should not be taken lightly. It is a very very serious matter our biosecurity system. I know that the Ministry for Primary Industries has various levels of protection I guess that we use. But this is an admission that the Government has been underperforming because you know you are in trouble when you have to call your fisheries officers out to try to chase a fruit fly or look after a sick pig. You know you are in trouble when you are doing that. Our dedicated and highly trained fish cops have been diverted by biosecurity matters.Kris Faafoi: Coast gets plundered.RINO TIRIKATENE: Absolutely and then the coast gets plundered. So that is an admission from this Government that it has underperformed in this area. It is a shame though. The Crown has funded our biosecurity system and our services and it should continue to do so. There is no need. It is hurting our tourism industry and it remains to be seen whether there is a reduction in visitor numbers as a result of the imposition of this tax.The other point I want to move on to now goes back to the Joint Border Management System the JBMS. That is right that $100 million lemon which has not even been delivered yet. The full functionality has not been delivered and it is still kept a secret. If this travel tax is imposed I think that the travellers—the people who are leaving our shores and our tourists—have a right to know what their levy spend is actually going on. The Minister has given an assurance with regards to the Joint Border Management System that there is nothing to see and everything is all OK. Well if that is the case then why keep it secret? I believe that if Kiwis are paying this tax which is there to protect our borders and there is a joint system that has cost $100 million then Kiwis need to know what they are paying for. There has been a failure to deliver on the Joint Border Management System. For cargo users of the Joint Border Management System there is a user-pays charge. They know what they are paying for. Well what is the passenger component? What is the passenger component of the Joint Border Management System? What is that passenger component because travellers have the right to know? They do have the right to know.If passengers are paying a levy for greater enhanced sophisticated risk analysis of their movements well then it is very fair that the public of New Zealand especially who have paid over $100 million so far have a right to know what they are actually getting. Enlighten us Minister. Enlighten the country as to what it is because what are the risk and intelligence tools that the Joint Border Management System is delivering? We want to know because the system still has not been delivered yet. It is 3 years too late. It still has not been delivered. We have been told that the delivery date is going to be December this year but now it is getting put back. We are getting signals that it can be put back again. The Joint Border Management System is actually the engine room or it is supposed to be. The computer systems between the Ministry for Primary Industries and the Customs Service are joined up so all of the passenger screenings and the biosecurity risk analysis are driven by the Joint Border Management System. If the travel tax is going towards that then we need to know what the passenger component is. Hopefully the Minister will enlighten us later on because that is a very serious issue of public interest given the huge price tag on this system which no one seems to know what it is doing and you never hear anything about it.Hon Nicky Wagner: It’s because it’s working so well.RINO TIRIKATENE: Well it is not working so well. If it was working so well why are you keeping it secret? Why are you keeping it secret Minister?Hon Nicky Wagner: Success is no news.RINO TIRIKATENE: Well no. This Minister has been negligent in suppressing the details. The public of New Zealand deserve an answer particularly now that all travellers who will be crossing our borders will be paying a levy that will be subjected to the Joint Border Management System. They are paying for it so they have a right to know what they are getting for their spend. So we are looking forward to your elucidation on that point. We know that this is just another tax we know it is a broken promise from this Government and we continue to oppose this bill.Hon NICKY WAGNER (Minister of Customs):The New Zealand public told us they wanted a safe border. They want to make sure that it is secure against illegal people and illegal goods—that is drugs firearms and objectionable material—and they want us to manage biosecurity risks such as fruit fly and foot-and-mouth disease and that is what this levy will do. This levy in the Border Processing (Arrivals and Departures) Levy Bill will amend the Biosecurity Act and the Customs and Excise Act and it will impose a border clearance levy for arriving and departing passengers.I want to make it very clear that this levy is only cost recovery. It will be put into a trust account. It will have nothing to do with the Joint Border Management System because the Joint Border Management System deals with goods. This is to do with passengers and the Joint Border Management System deals with goods and Joint Border Management System goods have always had a levy. Goods have had a levy since the early 1990s so this is exactly the programme that we are going to introduce for passengers as well.I want to start by answering Mrs King’s question: what is the difference between a levy and a tax and why is it absolutely consistent that the Prime Minister has attacked the UK carbon tax and is absolutely supportive of this cost recovery levy? New Zealand’s cost recovery levy is about $20 maybe $22 and that reflects the cost that the New Zealand taxpayer is subsidising for every single passenger who comes across our border. The UK tax is about $150 and although $20 of it may be used for a border levy the rest of it is a carbon tax and it was designed to be a carbon tax. It is a carbon tax on distance a carbon tax on air miles flown for long-haul passengers. Of course that is calculated on the number of miles and that is particularly tough on a country like New Zealand on the opposite side of the world.At the moment if you look at the status quo in New Zealand it is a lose-lose for New Zealanders. Every New Zealander is paying for other people to come across our border. Then on top of that when New Zealanders go to another country they have to pay to go across others’ borders. So not only are we paying for our own borders but we are also paying for everybody else’s borders. That is lose-lose. This change will mean that it is best international practice and it will bring New Zealand into a place that is much more satisfactory for New Zealanders.I would also like to explain to Mr Lees-Galloway about the cost of this. It is all to do with addition. What our press release said was that it is going to cost $16 at arrival. The levy is $16 at arrival and $6 at departure. The reason for that is that there is much more work at arrivals than there is at departure because we deal with biosecurity at arrivals rather than at departure. But instead of it being inflationary as he seems to think it is actually going to be deflationary because I think it is probably going to end up at about $20. We believe it is $20 well-spent for New Zealanders to protect our borders. Just let me make it very clear. This is in comparison with Australia which is $58 and the UK which is $150.Let us now have a little bit of a chat about the Joint Border Management System. I would like to answer Mr Shearer’s queries and Mr Tirikatene’s questions. The Joint Border Management System is working well. I will make it clear again. It manages goods not passengers. Goods have always paid a cost levy. So this levy actually brings passengers in line with goods. I am really pleased to be able to announce a really good news story. Right now we are able to tell you that the Joint Border Management System has just reached 2 million transactions. I did put out a press release about this time last year when we got to 500000. But we have now got to 2 million transactions.Stuart Smith: Wow 2 million.Hon NICKY WAGNER: Fantastic. And on top of that exporters now have the ability the tools to be able to register online themselves. In the past it used to take 24 hours to register online. They can now do it within minutes. That is a fantastic improvement for the Joint Border Management System. I would also like to tell you that every week more companies are transferring to WCO Data Model 3 which is the new data protocol. This is cutting-edge latest technology latest data protocol and every week more and more of our transactions through the Joint Border Management System are moving that way.I would just like to make the point that the Customs Service is 175 years old this year. It is the oldest department—175 years. We are also dealing with cutting-edge technology cutting-edge IT and I think it just goes to show that you can teach old dogs new tricks.Also I would like to make a comment for the member Steffan Browning. He was concerned about private yachts. This levy will be in place for private yachts private aircraft and anybody who comes across our borders. As it is now every yacht and every aircraft that comes into New Zealand goes through the customs process for arrival and departure and we will collect the levy at that time. So he needs to understand that we will be doing a good job.Finally I want to get back to Rino Tirikatene again. I just want to tell him that we are not taking biosecurity or security at our border lightly. He seems to think we take it lightly. He probably has not realised that we have actually put $30 million in this Budget on top of this levy to beef up what we are doing at the border. So in the meantime this $30 million is going in this Budget. I also want to tell him that nobody seems to believe that this will make a difference to tourists’ behaviour. This cost is less than 1 percent for a long-haul flight and it is only one of thousands of variables that people have when they travel. For example how much does it cost you to get to the airport? What do you eat at the airport? What do you buy duty-free? What do you spend on entertainment on the plane? What do you spend in your country? The interesting thing is that I had a look at some research that said that in the last month the average Australian visitor to New Zealand lost more than $20 just on the exchange rate between Australia and New Zealand. So this is not going to make a difference. In fact I have a quote from a well-respected tourist leader who says “It won’t make a blind bit of difference.”I just want to summarise why this levy is so important for New Zealand and why New Zealanders should be pleased to see it. First of all it is flexible and futureproof. As the numbers of passengers and travellers increase across our borders the resources will be there to manage them. As we get more and they are more risky we will be able to make sure that we keep our borders safe. It is also fairer. I have explained that at the moment every New Zealander every Tom Dick and Harry is paying $23 in their tax to subsidise international people coming across our borders—people who are on a luxury cruise people who are coming to play golf in New Zealand. So why should the Whangarei panel beater or the solo parent in Christchurch pay for these people to come across our borders? What we have got now because the rest of the world is putting on these levies is a lose-lose for all New Zealanders.I just want to make one little reflection before I go. Before I was an MP I did not used to like paying tax. I think it was because Labour was in power and I did not trust the way it spent the money. But now I do understand where the money is going I know that it is spent wisely and I do not feel so bad about our tax. Most New Zealanders want their tax money to go to something useful. They want it perhaps to go to poorer families. They want it to go to hip operations. They want it to go to education. People like their taxes to go to something useful not to subsidise international passengers. So this levy is good for New Zealand it is good for New Zealanders and I commend this bill to the House.GRANT ROBERTSON (Labour—Wellington Central):There is hope for Stuart Smith because before the dinner break he got up and he told New Zealand what we all know: tonight we are debating a new tax that National brought in. We on this side of the House were discussing over dinner what a tragic end this was to Stuart Smith’s political career—so short burnt bright and out on one night. But Nicky Wagner has saved him. Stuart Smith could be the next Nicky Wagner—that is what we are finding out tonight—because she has just told us that the promise has been broken: “No new taxes.” That was the promise and Nicky Wagner has just told us right now that it is a tax. Every single New Zealander knows that Nicky Wagner.John Key went on the television last night and invited New Zealanders to google the difference between “tax” and “levy”. So I have done that and I can tell you that a tax is a compulsory contribution to State revenue levied by the Government on workers’ income and business profits or added to the cost of some goods services and transactions—something that we understand a tax to be. If we google “a levy” we see it is “a tax” or in fact both—the verb to impose a tax and the act of levying a tax. In fact some dictionaries go on to say “Use the word ‘levy’ as you would use the word ‘tax’.” So there we go—it is all there right here for you. We are happy to table it for you John. It is one with pictures so you will be fine; you will be good with that.So what we now have is a levy that is a tax and a tax that is a levy except that the Prime Minister does not think that they are the same. We are through the looking glass. This is what Humpty Dumpty told us: “When I use a word it means just what I choose it to mean—neither more nor less.” John Key is through the looking glass with Humpty Dumpty breaking the promise breaking the—Hon Craig Foss: Come on give us some poetry.GRANT ROBERTSON: Poetry? You would not know a poem if you fell over it Mr Foss.This is a broken promise. That is what this is. It is not just a broken promise to the voters of New Zealand who were told at the election by all the National candidates over there that there would be no new taxes; it is a broken promise to the airline industry. The board and airline representatives have made it quite clear that “National’s new tax”—they understand that—“breaches the understanding reached in 2003. Airlines already met the full costs of aviation safety and in return the Government met the costs of Customs. Under the deal the Government was to bear the costs of agricultural screening which is deemed to be for the benefit of the primary industries.” It is a broken promise to New Zealanders; a broken promise to the airline industry.But of course we all know that John Key is a straight-talking guy. If he went to a conference of a sector that was going to be deeply affected by something that was happening in the Budget—oh I do not know—2 days after his speech he might mention it to them. John Key goes to the Tourism Industry Association conference last week and it slips his mind. Obviously there are a lot of things on his mind but he fails to even mention it.Carmel Sepuloni: Slippery mind—that is why.GRANT ROBERTSON: That is right—because he is indeed Carmel Sepuloni very very slippery. It is a sneaky tax it is a broken promise and that is all that New Zealanders will see it as.But it gets worse. As we look through the department disclosure statement—and I hate to break this to the Minister Nicky Wagner who got up to give us the numbers before; we had 16 20 and 22. Do I have any advance on 22—no apparently not according to the Minister. When we look at the department disclosure statement it says as it goes through about the model of the levy: “[All of] this work will inform the final levy design including the level of the levy.” So the level of the levy—which is a tax—will still now be part of the consultation process.This is a bizarre situation. Here we are at 20 past 7 on a Saturday night apparently urgently passing this legislation to enable the imposition of this tax and the final design of the tax—the level of the tax—is not even going to be worked out. It is off for consultation. It is like going to the city council to get a building consent and saying “We are pretty sure the house is going to have some walls and we might put a roof on it and there could be a floor but look we’ll work it out later. Just give us the consent now.” That is what the National Party is doing tonight. There are all sorts of questions about whom it will apply to and will there be exemptions?Here is a question for the National members: will there be exemptions? Will it apply to every person who crosses the border? There is silence—absolute silence. They have not got a clue whether this tax will apply to every person who comes across the border. Here is a question for you: would it have applied to Prince Harry? No one—no one; they have not got a clue. They do not know what this is about. They have come to this House with an ill-thought-out tax—Carmel Sepuloni: Will it apply to Gerry Brownlee?GRANT ROBERTSON: Will it apply to Gerry Brownlee? He will sneak through so it will not apply to him. Actually someone called Gerry—his phone is on the desk so I am not sure what happened there. He may have been a bit angry earlier on and ripped it off. Ring up Gerry Brownlee and find out whether this tax will apply to him. At the moment what we are being asked to pass in this Parliament is a piece of legislation to impose a tax that the Government does not know how much it is going to be to whom it will apply how much it is going to cost to administer and exactly who is going to administer it. It is a shambles.Chris Hipkins: But it is very urgent.GRANT ROBERTSON: It is extremely urgent but it is a complete shambles and it is a total broken promise which symbolises everything about this Budget—a tax on travellers that is a broken promise a property tax about which Bill English said today that he did not even know whether it would work; he is not too sure about that. These are broken promises and a shambolic Budget. On this side of the House in a second reading debate we really should be debating now the contributions of all of the people who submitted at the select committee—the tourism industry the airline industry travellers—and we do not have their voices here today. For all of those reasons we cannot support this bill.IAN McKELVIE (National—Rangitīkei):I will be very brief. I commiserate with Mr Smith; I would not want to be on Grant Robertson’s dinner plate.Two very quick points: the levy will not put an impost on those who cannot afford to pay it. It is worth remembering that. The second point about this is that the levy also affords further protection to the income streams of rural and provincial New Zealand thus boosting the potential for rural and provincial New Zealand to participate in or make a contribution to the Government’s growth targets. I have great pleasure in commending this bill to the House.STEFFAN BROWNING (Green):I rise to speak in the second reading of the Border Processing (Arrivals and Departures) Levy Bill. Following on from what the Labour members were saying this shows a sad lack of process. We might be supporting the bill but we think there is a very sad lack of process. We agree that there should have been submissions to a select committee which would have added a much better context.As we heard importers might want to see a little bit of a fairer balance between their fees and the tourism industry the fees on these people who will be coming in. I am wondering which one actually deserves to pay the most. We are hearing that it will be $16 probably—probably but we do not know about the exemptions. It will be $16 out maybe $6 in and possibly $22—we do not know. For every importation an importer pays $13.15 from 1 July or depending on another level $17.37. It is pretty similar money. I am just wondering if we had submissions and we had some very solid depth to this we would understand which one was the riskier which one should pay to get the balance right if we are talking about biosecurity alone. I would like to know that.I would like to know—probably from the Cabinet papers that we have not seen or the other papers that we have not seen yet—in terms of the real costings where the risk lies and what the cost-benefit ratios of each would be. Under what sort of consultation will that happen? Consultation will not be that thorough and it will not have that opportunity from our previous experience.I started on a story before about where the Minister is going with biosecurity. He said that it was his most important area. I believe him actually. I think he is doing quite well in that area but he will never do well enough if he is using 2008 figures when National came into power and did these big cuts. It would appear that the Minister Nathan Guy has got us back in dollar terms to 2008. But 2008 was not good enough either. Before that in the previous Labour Government we had didymo the varroa mite and a lot more. But our risks appear to be increasing. Of course we have more tourists and we have more trade and we need to go a lot lot further.The Minister has done some catching up. I want to know from the Minister what his real numbers are at the moment in terms of staff and in terms of dogs. Some of the time he talks about new staff and new dogs but we are still not up to those 2008 numbers and the question is whether this Budget or this bill will help exceed those numbers and ultimately exceed them significantly. Good on the Minister.It is a real shame about the incursions that we got and are still getting because of the huge knock backs that happened following 2008. There is a whole range of different pests and diseases that have come in in recent times and that have not been managed very well. Theileria is one that possibly came in with cattle; it may have come in with some other animal. Where is the tax for that one? Did Psa come in pollen? Did it come in a matchbox in somebody’s luggage? Was varroa on a bee in a matchbox in someone’s luggage? Didymo was probably on some fisherman tourist’s spongy boots I would expect. Kauri dieback was probably brought in on machinery but we do not know for sure. How did the Hadda beetle come in? We assume that the great white butterfly at Port Nelson came from the port; we assume it did not come with a tourist but we do not know. And what about Psyllid. All these have had massive costs to this economy and to this country.A number of them are still here with significant costs. They have come in because of inadequate biosecurity controls. Not only that will this fund address the next stage—the clean ups the dealing with those incursions? I doubt it.They are finally getting on to the great white butterfly thanks to the Minister possibly listening to the Greens and others. The Department of Conservation was actually the one that really got it moving because the Ministry for Primary Industries did not but ultimately between them it appears they may have got control. But at what huge cost was that and what was the threat to both biodiversity and also the agricultural economy? The Theileria which I mentioned before is here for ever. How did this Government manage that? Absolutely woefully. MAF Biosecurity is underfunded. I do not think MAF Biosecurity staff are bad. I do not think they are incapable. I just think there are far too few of them and they keep getting mucked around and being told to do a new strategy. I think we are on the third new strategy within a decade—the third new strategy.And then some of the pathways work that looks to be actually meaningful in getting there is getting some funding knocked off it. That Theileria is huge: it will be costing us hundreds of millions of dollars in the near years—what it has cost and what it will carry on costing in lost production. There is major lost production: the loss of cows being able to carry embryos to conceive other ones dying ill thrift lack of production—a massive cost. Varroa is still costing us and will continue to cost us. These things also mean we end up using pesticides that we do not need to be using in this country—if we were to stop these things at the border or clean up absolutely immediately.I mentioned the fruit fly earlier and that clean up. I visited the Auckland area several times to see how they were doing this and how they were managing this fruit fly incursion. I believe that they did not have adequate advice. Again the staff are pretty good and I have met with some of them and had a briefing and understand what their logic was. They did not open up to enable further advice to do a better quicker job and as I heard from one of our fellow members over here before the cost was something like 50 percent of turnover for some of the businesses. I watched the changes in that and eventually we got some better systems in and businesses were able to trade a little bit more freely. But there are still impositions on business in that area and no doubt there will be a lot more in spring again until we get the all clear. So the Greens will support this but we want to see a lot more than this going into biosecurity and customs clearance. Thank you.RICHARD PROSSER (NZ First):I am very pleased to rise to take a call in the second reading of the Border Processing (Arrivals and Departures) Levy Bill as it scurries its way urgently through the House. In the absence of a select committee process—or any other mechanism of public scrutiny come to that—it appears that all we have left as a means for ascertaining the reasons behind this bill and for getting some kinds of answers out of the Government is this process of urgency. I have to say that I am a little hurt that Minister Wagner addressed everyone’s questions except mine. I am not taking it personally; it is just that I want to know why. Maybe they were questions that the Minister felt she could not answer. Maybe they cut too deeply to the heart of the matter. But anyway I am sure that the Minister will take the opportunity to address the concerns that we have as a party.The first question I have is that we have been given an indication that this levy—fee tax whatever we want to call it—is going to be added on to the cost of tickets and that will be tickets that are sold here going outwards and tickets that are purchased overseas coming inwards. What I want to know from the Government is: at what stage of the GST process does this levy get applied? Does this levy get applied before GST is added or after? Is it in fact going to have GST on it as well and is it going to be another tax upon a tax in the same way that GST on rates is a tax on a tax? This is another case of what happens in terms of unintended consequences—or perhaps actually they are intended consequences—when due process is done away with and things happen in a hurry and there is not the time for reflection and contemplation and consideration and questions being asked and answered. Maybe this is one of these things that will just get sorted out later. If the Government does not want to make it a tax upon a tax and add GST on to the levy well then there is going to have to be a whole lot more administration involved and that is going to raise the cost as well so the value of the levy itself is going to fall—unless of course it does not mind adding a tax on a tax but this we will find out I suppose at some stage in the future.What is really starting to coalesce as being the centre point I guess of our difficulty with this bill is that we do not know whether this levy is intended to be additional funding for biosecurity or whether it is actually intended to just replace existing funding. Mr McKelvie in his long rambling speech of about 30 seconds I think it was spoke of a boost to biosecurity funding. But the Minister has consistently talked about cost recovery. Well it is one or the other. You know it is either an additional source of funding or it is a switch in funding from one source to another. I have a horrible suspicion—and it is growing on me all the time—that this levy which is touted as being a boost and an increase for biosecurity is in fact smoke and mirrors and that actually funding allocated to biosecurity will be flatlined and it is just the source of it that will change.When you drill down through the mud of the Government’s Budget figures it seems that all the appropriations relating to what used to be Vote Biosecurity and now appears to go by a number of different names are either flat or slightly reduced. There is a one-off capital injection to fund new X-ray machines—we see that. Whether that is actually funded by the levy or the tax or not remains to be seen. There is a mention of some additional staff but that comes in some of the Government’s publicity material and not actually in the bill itself. Again there is no clear indication as to whether the ongoing funding for these things—for the additional staff and for the X-ray machines—will be coming solely from the levy or partly from the levy or whether the existing baseline funding from general taxation will continue or not and the levy will be on top. This we actually need to know.Last year I think it was we passed the Airports (Cost Recovery for Processing of International Travellers) Bill. Airports where that levy applies will not also have the new levy. That to my mind adds weight to the idea that this levy—or tax as is being suggested—is intended to be the primary source of funding for border inspection activities and not an additional source. Cargo inspection as we know—containers and freight coming in—is already funded through levies and fees. But we also know that only about one in four or only about 25 percent of incoming shipping containers are actually inspected. I would like to see increases in this levy as well if indeed the passenger funding is to be additional to existing revenue.The Customs Service website advertises inspection fees for containers for the importation of personal household effects of $330 for a 20-foot container up to $480 for a 40-foot container plus fumigation if necessary. That is for the likes of people migrating to New Zealand or New Zealanders who have been away coming home—their personal effects and so forth. So we know that all these containers are inspected because that fee is charged and paid and there is a devanning process. But the great majority of containers general freight are not inspected. There is an audit process where some are taken out or there will be a period of time or—Mr DEPUTY SPEAKER: Passenger levy.RICHARD PROSSER: Thank you Mr Deputy Speaker. They are not inspected there are not enough inspectors and I am wondering whether any of this levy is to be directed to that sort of thing. We would actually like to see the levy extended for that. That is a large barn door that has been left open.Our other primary concern is whether or not this levy is simply in fact a holiday tax. It gets back to my earlier questions around whether or not this is an additional stream of funding or a replacement stream of funding. I do not believe that the travelling public would mind too much about paying $16 on top of their air tickets to come into the country if that was going to contribute to additional safety in terms of making sure that New Zealand does not get diseases like foot-and-mouth and so forth. We would certainly expect and the New Zealand travelling public would certainly expect that overseas travellers would pay that as well. The primary sector certainly expects that anyone any person who is a source of potential risk will pay their fair share. It is fairness and the relative fairness of who is expected to pay what that is at the heart of this matter. So we would like some clarity around that.It is puzzling as to why we would be charging a $6 levy for people to leave the country. I know that the Minister has explained that this is to add to or cover the costs of customs for people on the way out. Customs and biosecurity as we know are two different things. But again it makes me suspicious that if we are going to charge a levy on passengers leaving the country paying $6 towards the cost of running the Customs Service that to me says very loud and clear that actually this is a replacement source of revenue not an additional source of revenue.Hon Nicky Wagner: This puts $4.7 million on for departures.RICHARD PROSSER: Well I would love the Minister to stand up in the Committee stage and spell this out quite clearly. I want an assurance from the Minister that this levy is going to be on top of existing baseline taxation funding for biosecurity and customs not instead of. There is just too much ambiguity about it. The way the Government is spinning this thing as being great and marvellous and wonderful and additional—maybe I am a naturally suspicious person but it seems to me as if what we are going to wind up with at the end of this whole process is the same amount of money coming from a different place and not actually an increase.Actually most of the bill is concerned with who collects the money and what trust accounts it goes in and what records need to be kept and what penalties will apply if these rules and conditions are broken. It actually does not say anything at all about what the money will be spent on other than Government statements around funding for biosecurity which itself is a welcome thing. The explanatory note states: “The objective of this Bill is to ensure that funding arrangements for MPI and Customs are sustainable and the costs associated with the delivery of those activities are borne by those who directly benefit from the activities or give rise to the risks.” I mean costs being borne by those who directly benefit—Hon Nicky Wagner: That’s what a levy is.RICHARD PROSSER: Well in terms of customs Minister I do not understand that because arguably the only direct beneficiary from a customs inspection would be the Customs Service itself. Although the entire nation benefits from biosecurity inspections the primary sector could arguably be called the primary beneficiary from biosecurity but it is not being targeted by the levy at all. I am not saying that it should carry more of the cost—the primary sector pays tax and tax currently pays for biosecurity—but it is a direct beneficiary and yet this levy appears to be targeting a group that is not a direct beneficiary which again is confusing.The descriptions in the bill itself talk about functions—OK I guess “functions” can mean anything. We would like a bit of that spelt out a bit more clearly. I have another question: do cruise ship passengers get to pay the exit and entry levies four times over if for example their cruise ship stops in Auckland and in Wellington and in Lyttelton and at Port Chalmers? Because if the ship goes outside the 12 mile limit arguably the passenger has left New Zealand and then come back in again and gone out and come back in and gone out and come back in. Do they get stung with a fee every time they leave and every time they arrive again? Why have we not been told these things?Again there is no mention of whether or not this additional or altered source of funding is going to be used to reinstate 100 percent screening of all incoming passengers’ luggage mail and freight. This is something we are quite hot on. It is something that will actually make a material difference. Rearranging the beans into different-sized heaps before you count them does not actually increase the number of beans. Again we have—Hon Member: What does Jack think?RICHARD PROSSER: —questions that are—Jack and the Beanstalk—Mr DEPUTY SPEAKER: I am sorry to interrupt the member but his time has expired.STUART SMITH (National—Kaikōura):It is with great pleasure that I commend the Border Processing (Arrivals and Departures) Levy Bill to the House. Thank you.Mr DEPUTY SPEAKER: I call James Shaw—5 minutes.JAMES SHAW (Green):I have got a couple of questions that I would like a response from the Government side about one of which is the question of the money. There were three press releases relating to the levy and there is a question about whether this replaces existing money or whether it is actually new money. One of the press releases was talking about how biosecurity funding will be boosted by $24.9 million over 4 years plus $2 million of capital funding. A second press release talked about how the Customs Service would receive a $4.7 million operating funding increase. The general release about the airport tax said that the Ministry for Primary Industries and Customs Service currently spend about $100 million a year and that the airport tax is expected to raise about $100 million a year. That would imply that the new airport tax would raise an equivalent amount to what is currently being spent.I just wanted to check with the Government. The $24.9 million boost over 4 years and then the $2 million capital funding for biosecurity—does that come out of the $100 million—Hon Nicky Wagner: No.JAMES SHAW: —or is it additional? And the same with the $4.7 million—is that out of the $100 million or is that actually new money?Hon Nicky Wagner: New money.JAMES SHAW: OK.And then the second question was around the Customs Service press release. This is relating to the privacy concern that we flagged in my first reading speech. I just wanted to read it and then get a response. “ ‘The officers will use the targeting techniques that Customs currently applies to arriving international passengers to identify departing passengers of interest who are unknown to security agencies or not on an international watch list’ Ms Wagner says. ‘Customs officers will take appropriate action at the border before a person of interest leaves the country. This could include stopping them for questioning or alerting other authorities in New Zealand or abroad. Extended-risk screening for departures will complement the existing automated and face-to-face passport checks and the alert system already in place and will provide an additional source of intelligence. The aim is to counter potential terrorist activity maintain New Zealand’s low risk status and contribute to international efforts to combat terrorism’ Ms Wagner says.”From a Green Party perspective we have a pretty strong civil liberties kind of strain in the Green Party and some of that language there flags some concerns. So I would like it if at some point during the course of the debate the Minister would not mind just saying a little bit more about that and describing any new technologies or any risks analyses that have been done on what the implications are for personal privacy and security.And then the one I guess that everybody is waiting for. In the Ministry for Primary Industries release it does mention that it will be “Expanding our biosecurity detector dog capacity”—I am speaking to particular constituents here obviously—“to manage risk at the border.” The Government has made a great deal about the number of people who are returning home from Australia. I just wanted to check whether those dogs are going to be beagles or alsatians because I think beagles will be a great deal more attractive and bring more people back home.Hon Nicky Wagner: Labs. Customs likes labs.JAMES SHAW: OK. Thank you.Mr DEPUTY SPEAKER: I call Kris Faafoi—5 minutes.KRIS FAAFOI (Labour—Mana):Thank you very much for the opportunity to speak briefly to the Border Processing (Arrivals and Departures) Levy Bill. I believe that the questions just posed by the Green member of Parliament James Shaw are good ones. The time of this Parliament would not be being taken up asking these questions if this piece of legislation had followed the normal process. If we had the select committee process this piece of legislation would have gone to either the Primary Production Committee or perhaps the Foreign Affairs Defence and Trade Committee and these really basic questions could have been answered. But no we are here at 11 minutes to 8 on a Saturday night.I know that some of the members across the other side of the House do not want to be here but it is their own fault. It is their own fault because this did not have to be rushed through this Parliament under urgency. Some of the very basic questions that Mr Shaw is asking could have been answered. The process has been completely backwards and that is plain to see in the departmental disclosure report where a simple question was asked: “Were any regulatory impact statements provided to inform the policy decisions that led to this Bill?”. Usually that is something that is basic and is on the table for us so we can get answers to some of these simple questions that Mr Shaw has asked that Mr Prosser has asked that members from the Labour Party have asked. But the answer to that question is no.It is quite surprising that we have got to this stage—we are into the second reading of this bill—and a departmental report says: “A Regulatory Impact Statement (RIS) was not prepared in support of the decision to implement the policy. However the regulatory impact of imposing a levy”—that is the Government’s spin—“and alternative options was set out … in the Cabinet paper proposing its introduction. A consultation RIS will be prepared and submitted for consideration by Cabinet when approval is sought in late May”—in about a week or so well after this piece of legislation is going to be passed. You know this is just not good enough. If this Government wants to introduce a new tax a travel tax on New Zealanders put it through the wringer through the scrutiny of a select committee. But no it did not warn anyone. It said there would be no new taxes. So to try to get away and sweep this under the carpet the Government puts this legislation under urgency at 10 to 8 while it thinks people are watching the Hurricanes beat the Blues.I will come to a conclusion soon but I would just like to also make a plea to members on my side of the House: take it easy on Stuart Smith. He is a new member to the House it is his first urgency he is a bit tired he has had a hard week he let his guard down and he got caught out telling the truth. Let us forgive him. Let us forgive him for that because he only confirmed what we already know: this is not a levy; in fact it is a tax. It is not the first time that the Government has used this urgency to bring in another tax. The telecommunications development levy was also a tax and this is also a tax. Let us forgive Stuart Smith. Forgive him. But we cannot forgive Nicky Wagner. She is the Minister. She is the Minister and she let it out also that this is a tax. A tax is a tax is a tax.The Prime Minister says that this tax will not make a blind bit of difference but I do not think that is necessarily the case because what did the Tourism Export Council’s chief executive Lesley Immink I think it is—I hope I have pronounced that correctly—say a couple of days after the Prime Minister spoke to its conference? She said: “Clear surprise is the first reaction that there was no discussion with either the inbound or outbound tourism agencies in New Zealand and the implications for the traveller.” Mr Key went along and spoke to them but did not bother telling them. What is the go there?Mr Chair the Prime Minister also posed a pretty simple question—Mr Speaker sorry. I have got the jitters from the Committee stage sorry Mr Speaker. The Prime Minister posed a pretty simple question. Is it a levy or is it a tax? He said: “Go google it.” We googled it. It is a tax—end of story.Hon CRAIG FOSS (Minister for Small Business):An additional $100 million to protect the biosecurity of New Zealand—an extra $100 million to protect the economy of this country—and ladies and gentlemen Labour is voting against it. Labour is voting against an additional extra $100 million to protect jobs in the region and to protect our economy. Do Labour members agree that the increase in the numbers of visitors to our country means that biosecurity risks are ever increasing? Do they agree with that? I certainly hope so because the Labour Party policy on biosecurity says exactly that.This levy will help to boost the capability of the biosecurity system to identify offshore threats to the many and varied production sectors across primary industries such as porcine reproductive and respiratory syndrome and foot-and-mouth disease. This additional $100 million will protect our nation our country our jobs our regions and our biosecurity. That is what that will achieve.Labour members are actually voting against their own policy which is on their own website. I actually think that originally they were going to vote for this. I do worry deeply. Thank you to the Greens for their support even though they had many questions. My only concern about this is that perhaps we have done something a little bit wrong because we have got support from the Greens. But maybe just maybe this is the new beginning. Congratulations—perhaps I am a bit early—on this new sensible approach of the Greens in dealing with sensible policies from this fine National Government. Is this the beginning of the blue-green revolution Mr Shaw? Perhaps it might well be.Jobs in the regions jobs across New Zealand—it just shows how out of touch Labour is with the regions. It is voting against an additional $100 million to protect biosecurity to protect our land-based industries and to protect jobs. Labour is no longer the party of the workers; National has always been. Once again this additional $100 million to protect regional jobs is a fine worker-friendly and job-friendly policy of this fine National Government. I commend this fine bill to the House.CHRIS HIPKINS (Labour—Rimutaka):About the only impact that speech by Craig Foss made on this particular debate was to destroy James Shaw’s chances of becoming the next co-leader of the National Party—of the Green Party. He could well become the next co-leader of the National Party too.Craig Foss rants and raves about the extra $100 million to protect biosecurity that this new tax that National is introducing is going to raise. What he did not say was that the National Government cut funding from biosecurity in the first place. This new tax it is introducing is to restore cuts that it made before and to restore funding for things that were previously funded out of general taxation. Now it is introducing extra taxes to pay for something that it cut previously. That is what this Government is all about.I want to talk about this picture of course. “No new taxes” John Key and Bill English went around the country promising New Zealanders at the last election. But actually there was another part of this that is very important. Look at the little bubble above that. It says “A strong economy means no new taxes.” So which bit did they break? Which promise did they break?Rino Tirikatene: All of them.CHRIS HIPKINS: All of them probably—both of them. National is delivering a new tax so it has clearly broken that promise. “A strong economy”—it has not delivered on that one either. It has broken that promise too. This is a Government that is breaking all of its pre-election promises. “No new taxes”—that is not true. This is the third of three new taxes introduced in this Budget alone. It is National’s first Budget since the election and it is the first set of broken promises. Of course we know National Party members cannot be trusted at their word. Let us just go back to just on a year ago when John Key flew to the UK—at the taxpayers’ expense without paying this tax on the way in or the way out—to encourage them to remove the taxes that they have on Kiwi passengers going in and out of the UK.Hon Annette King: He called them taxes.CHRIS HIPKINS: He called them taxes. “Prime Minister and tourism Minister John Key has welcomed the British Government’s decision to reduce taxes for passenger flights to New Zealand. ‘I have consistently advocated for such a change’ John Key said ‘which will benefit travelling New Zealanders and encourage more tourists to come to New Zealand.’ ”So only a year ago John Key was arguing that another Government should be reducing its taxes to encourage people to come to New Zealand. And how has he responded in kind? By whacking our own taxes up on them in this year’s Budget. Of course we do not know how much that is going to be. Of course the tax changes that were made in the UK which were welcomed by the New Zealand Government reduced the cost to the travelling public of about $50. We do not know how much this levy is going to be. First we were told it was only going to be about $16. Then we were told it was only going to be about $20. Then we were told it was only going to be only about $22. That is all in the space of a couple of hours. I tell you what the longer this debate goes—it will get to fifty bucks before midnight at the rate that the Government is going on that side of the House.When the Government said that there were going to be no new taxes why did it not tell New Zealanders that there were a whole lot of riders on that? It was just going to try to call them something else and pretend they were not actually taxes. The Government can dress it up as a “levy” but it is actually a tax. As for the reassurances that “Oh this is a levy. It is going to be ring-fenced. It is going to go into a fund. It is not about ensuring that the Government gets back into surplus. There are no implications for that whatsoever.” that is of course what people in Governments have been arguing for years about ACC and yet the Government has kept ACC levies high—artificially high—in order to try to create the illusion of a Government surplus when we know that it is not going to be able to deliver one. It is certainly not going to deliver one this year and it is highly unlikely it is going to be able to deliver one next year because we know that Treasury has said that unless the price of milk rebounds the surplus next year is in doubt as well.So we get the Government saying that this is not a new tax. We know the Oxford English Dictionary describes a levy as a “tax raised by levying”—a tax raised by levying. So it is a little bit like John Key’s promise that he was not going to increase GST. He will probably argue that was not a tax either but he increased GST despite making a specific promise down the barrel of the camera that he was not going to raise GST and he did exactly that. So who is this new levy going to apply to? Is it going to apply to everybody travelling across the border in New Zealand? Will there be any exemptions? What about the people who barge their way through security without going through the appropriate channels? Will this apply to Gerry Brownlee? Gerry Brownlee bypasses security. Pick up the phone that he has broken off the desk and give him a call. Will Gerry Brownlee pay this particular levy? Will all of the people coming to New Zealand pay this levy? How can the current Government be trusted to give factual information on that?This is yet another broken promise by this National Government and it is barely beginning this term in Government. New Zealanders can expect many more broken promises from the National Government and I am sure that is what we are going to see because this Government really has no major plan or vision for the future of this country. It is tinkering around the edges. It is dealing with little bits here and there but it is not dealing with the big issues that are actually going to result in New Zealanders earning better incomes having better jobs being able to afford houses and having a higher standard of living. That is not what the Government is dealing with and trying to deliver in this Budget because it does not know how. It has not got any new ideas it does not have a vision for the brighter future that it has promised New Zealanders and even if it did have the goal of delivering its brighter future it just has no idea how to do it.BARBARA KURIGER (National—Taranaki - King Country):I commend this Border Processing (Arrivals and Departures) Levy Bill to the House. Thank you.RICHARD PROSSER (NZ First):I raise a point of order Mr Speaker. I have reason to believe that the previous speaker read her speech from her notes in contravention of the Standing Orders.Mr DEPUTY SPEAKER: Humorous but not a point of order.A party votewas called for on the questionThat the Border Processing (Arrivals and Departures) Levy Bill be now read a second time.Ayes 72New Zealand National 59; Green Party 9; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 33New Zealand Labour 21; New Zealand First 12.Bill read a second time.In CommitteeJAMI-LEE ROSS (Junior Whip—National):I seek leave for all questions in this debate to be considered as one question.The CHAIRPERSON (Hon Trevor Mallard): I will put the leave in the terms that have been put—all debates as one question. Is there any objection? There is no objection. So we now have all of the debates as one question.Parts 1 and 2 and clauses 1 and 2Hon ANNETTE KING (Deputy Leader—Labour):This of course is now a wide-ranging debate because we can cover absolutely everything that is in the bill in one job lot. The first thing that I wanted to say to the members opposite is we are voting against this bill because it is a nasty sneaky little tax that has been brought into this House with no consultation with the very industry bodies that are affected by it. That is not good policy-making.I want to go back to trust because in 2003 the Government in conjunction with the airline industry and the tourism industry decided on an agreement. It was agreed that the airline industry would be responsible for aviation safety because it benefited airlines and passengers and the Government would pay for customs and for agricultural screening because it was of benefit to the public and to primary industries.The first question to the Minister in the chair is: did he go and consult with the industries that were part of that agreement that was made in 2003? Did he go and speak to the airline industry and to the tourism industry before he had work done on this bill before this bill was brought before this Parliament? When did that consultation take place? Did he say to those in the industry: “I am going to break an agreement that was made in 2003.” an agreement that the industry would pay for the aviation safety costs and that the Government would pay for agriculture and customs costs? I want to know if the Minister did not consult what right he has got to come into this Parliament and override an agreement that was made between the Government the airlines and also the tourism industry. You see when you treat such agreements in such a cavalier way there cannot be trust in a Government. You cannot believe what it is going to do and what it is going to say. So Minister when did that consultation—if there was any consultation—take place? Were they warned that you wanted to bring in a tax that was going to have to be added to the fares of the passengers travelling?The next question I want to ask the Minister is: why was there no regulatory impact statement prepared for this bill? We have got the department’s disclosure statement. It is dated 10 May and it shows that it was done 11 days before the Budget. It also shows that no review or evaluation had been done on this policy. There is no regulatory impact statement but it does say that there is going to be consultation around a regulatory impact statement later on. Why Minister is there not a regulatory impact statement on the Table of this House so that the members of this Parliament could look at the musings that went on when you were deciding to put a tax on New Zealanders which will be paid by New Zealanders but one that I do not believe was ever consulted on with the industries? When will we receive this public consultation document?We are told that there is going to be a public consultation document with a final design in October 2015 so when is it going to be available for perhaps this House to have a look at—well at least for the industry to have a look at? Maybe the public would want to have a look at it because after all they are given no input into this bill at all. There are no submissions on this bill. It was just slam bam here it is—another tax. There was no ability to be able to have a say on it at all. So Minister the consultation document or the regulatory impact analysis—when will that be available to sit on the floor of this House and when will we get to debate that?What we are seeing here is a Government that wants us to pass under urgency tonight legislation without the detail and I am surprised that the Green Party would be voting for something that it does not know the detail of. Those members are putting their trust in a Government that has already welshed on a deal with the airline industry and the tourism industry. Why would any party put its trust in a Government that has not honoured an agreement that has been in place since 2003? We were all told: “Just trust the Government. It is going to give us the details later on.” We are not even sure that it will be the levy that we are being told about tonight. It may or may not be $22. I suspect that as they work on the detail and the design of this maybe there are a few other things that will creep in—“Oh no we didn’t mean $22. It has just gone up to $27. No no maybe it’s $35.” Why should we trust a Government that could not honour an agreement that it made?I would like to see the Regulations Review Committee look at the design of these taxes after the Government has finalised what they are going to be. I would like that committee to see whether in fact this is a levy or a tax that is actually doing what they say it is going to do and the right amount of money has been taxed and levied against New Zealanders. I think we ought to insist that the Regulations Review Committee look at this. This is setting a levy tax. We have had no consultation with the public. We do not know whether it actually does cover the costs. We are told that by 2016-17 we are going to have $80 million gathered from it and we are told it goes into a trust account and therefore cannot be used for anything else. Well as we said what happened to ACC? What happened to ACC? That is a dedicated levy that goes to an organisation that can spend on virtually what it likes. Why should we believe the Government when it comes to this?I believe that this Government has been incredibly sneaky with this bill. It has brought it in without talking to the industry. The Government’s own Prime Minister who is the Minister of Tourism was two-faced to his own industry. He went to a conference and he did not tell them he was going to do this. Was it on your advice Minister that he did not tell them this is what was going to happen?I would like the Minister to now get on his feet and explain to this Committee whether the Government consulted with the industry before it did this. Has the Government discussed with the industry the agreement that was made in 2003? When are we going to get to look at what is going to be the design and the shape of this so-called tax levy? When is this House going to be able to scrutinise that? Is the Minister prepared for it to go to the Regulations Review Committee to see whether it can determine that this is a tax that has been properly imposed on New Zealanders? None of that has been answered tonight. I agree with Mr Prosser. There is so much missing that any party would be idiots to vote for this on trust from this Government.JACINDA ARDERN (Labour):I rise to take just a short call on the Border Processing (Arrivals and Departures) Levy Bill. We heard a lot during the first and second reading speeches that obviously from the Government’s perspective this was such an important issue for it that it wanted to put in place this levy to ensure that there was adequate funding to provide protections at our border controls. My question would be: how have we done that until now? Up until now how have we ensured that we have adequate border protections? We have done it without this levy/tax until this moment in time. This idea that this demonstrates what a priority it is for the Government really defies belief. It has been a priority of Governments in the past without a levy. That is not a justification for introducing something like this.My second question is that surely if this was as important as the Government claims then we would have more detail in this bill than we do right now. If it was such a priority why have we got this shallow framework of a bill rather than the detail that we would usually have in this Chamber when considering such legislation? So I really question whether it is the priority that the Government claims.I also wanted to come to clause 5 which inserts new section 140AA. That provides that every traveller who arrives in New Zealand on or after 1 January 2016 is liable to pay a levy. So that is basically the part that says the individual liability is on the traveller. I heard one of the speakers on the other side of the Chamber claim that another rationale for us having to introduce this levy is that we have got more passengers coming here. We have got more passengers; therefore we should make those individual passengers pick up this tax or levy. But the question that arose for me when hearing that is that actually the risk has always been there. Regardless of the size of the population coming into your country the risk has always existed.Nicky Wagner is shaking her head. I have just one reference to make to you—Grey Lynn fruit fly. That came in before a levy; that came in with the number of passengers we happened to have coming through at that time. Your risk exists around whether or not you have got proper processes in place to stop that from happening in the first place. If this bill is an admission that to date we have not had proper processes in place because we have not been able to fund them that is a different story. But I have not heard that admission from the Government yet. My argument is that it is not about scale; it is about whether or not you are properly resourcing your people to do the job.We have long had a concern on this side of the Chamber that we have not been properly resourcing our border control staff to carry out the functions we require of them otherwise why would we have had such a massive economic threat to our horticultural sector such as we have seen in the past couple of months? We cannot afford something like the fruit fly. It is the Queensland fruit fly; I called it the Grey Lynn fruit fly. It is the Queensland fruit fly which has found a new cosy environment in Grey Lynn. People have recently asked me whether or not we have got rid of that problem. The answer is no. Things have gone very quiet. That is only because the fruit fly is in hibernation. It is absolutely still a risk to our economy as a whole and one that was a massive wake-up call. We should not be reliant solely on introducing at the last minute these kinds of measures as being the mechanism for ensuring we have proper border controls in biosecurity.We know there has been a loss of experience in the Ministry for Primary Industries. We know that that has been a problem across the board. It has been something that Labour has continually raised and we raise it again here tonight.The second issue I want to raise is really covered by Part 2 of the bill and that is the amount of auditing that is going to have to go on and the amount of scrutiny over whether or not the levy is being recorded properly. Who is going to follow up on that? Is that another job? How much red tape and bureaucracy is being created by this bill? What will the costs of enforcement and that auditing be? I think it is a fine question to ask of the Government which purports to be a Government against red tape. It certainly introduces a lot of it. What is the cost of enforcing this bill? It is hard to know because of all the lack of detail but we certainly see that there are auditing requirements. Everyone is required to keep statements accounts and records. Who is going to enforce that? Those are some questions. I would love to hear answers from the Minister in the chair Nathan Guy if he would like to respond to me. Thank you.JAMES SHAW (Green):I would like to start by addressing some of the points raised by Craig Foss. He was saying that Labour is voting against $100 million of extra funding which does seem to contradict the press release that was put out saying that the current spend at the border is about $100 million and that this new tax would raise about $100 million. Is he saying that in fact costs are going to inflate to $200 million and that this new tax covers $100 million of that? I am assuming that he misspoke as he did about a number of things during his speech and that this is in fact just covering the additional $100 million that is currently being spent.Secondly related to that as I understand it the $4.7 million operating funding that is going to the Customs Service the $24.9 million over 4 years going to Biosecurity New Zealand and the $2 million capital funding going to Biosecurity New Zealand is on top of the $100 million that is currently being spent. Does that mean therefore that the $100 million revenue that is expected to be raised by this new tax will not actually cover the full costs? The current costs are about $100 million and then if we add that $30 million - odd that means that the spend will go up to just over $130 million and the tax is expected to raise $100 million. So I just wanted to clarify whether this new tax is expected to cover all expenses or just current expenses. Where is the additional funding coming from if it is not?Thirdly I just wanted to gently remind the Labour Party and Annette King—she says that Labour will not be voting with the Government on the bill tonight—that a few weeks back Labour voted with the Government on the Remuneration Authority (Members of Parliament Remuneration) Amendment Act. This is legislation that contained a fairly complex piece of algebra that literally no one who voted for it understood and members completely took it on faith that it would do roughly what the Government said it would despite the Government not actually being able to provide any kind of information about it actually doing what it was intended to do. So this kind of thing it seems happens a fair bit around here but thank you for the point.I wanted to speak particularly—given that we are taking this bill as one question—to clause 1 the title clause: “This Act is the Border Processing (Arrivals and Departures) Levy Act 2015.” Just to pick up a theme from earlier we might want to consider some other options because the dictionary definition of a “tax” is a “compulsory payment to Government to raise revenue levied on income property or goods and services”—and the service may include entering or leaving the country and getting your underwear patted down while you are doing it depending on whether you see that as a service. Some other words that we might want to use here in addition to “tax” or “levy” are “tariff” “toll” “excise” “duty” “fee” “imposition” “impost” “exaction” “assessment” “tithe” or “payment”—the point being I think that the argument about whether to call it a levy or a tax is frankly redundant. In broad category terms it is a tax and we should move on to whether we think this is of any substance.In terms of the argument about no new taxes and whether this is a broken promise and so on I think it is a fair one to have if the Government said going into an election that it would raise no new taxes and then it raised new taxes. Then you could argue that it won the election on false pretences along with things like running a surplus and so on. But the attacks on the Government for raising this additional form of revenue do buy into the narrative that a Government raising revenue to cover its costs is somehow a bad thing. Actually it is not all the time. There are times when we need to do this to cover our costs and as I said in an earlier speech when the Government cut the tax rate for high-income earners it actually meant that revenue was going to be running below costs for many years to come when it could have actually been running a surplus ever since. So in terms of—[Bell rung]The CHAIRPERSON (Hon Trevor Mallard): James Shaw.JAMES SHAW: I will not take too much of your time Mr Chair. I will just complete the thought on the narrative around whether taxes are good or bad or anything else. The reason the Greens are supporting this one is that we feel it is actually a good one because it locates the cost with the users. It is transparent and it increases accountability because rather than being funded out of general taxation it means that the revenue can rise and fall along with passenger numbers. So the cost is directly related to the activity and it means that transparency around this is greater. So if we are going to be raising new taxes to us this looks like a good one and so we will continue to support it.Aside from the process issues which are shocking—generally the Greens are against pushing things through under urgency that are not urgent and this does not seem in any way urgent—we are in favour of this bill. We have not seen any real substantial arguments as to why we should not pursue this course of action. But we do want some answers to those questions about whether this is $100 million worth of new funding or additional funding and then if the new funding that was announced in those press releases is on top of that $100 million whether that means that this tax itself is not covering the full cost of border security the Customs Service and biosecurity. Thank you.RICHARD PROSSER (NZ First):I want to pick up where my colleague Mr Shaw has left off. I was not going to wade into the debate about whether this measure is a levy or a tax because actually I think it is irrelevant and as Labour members and others have gone into in quite some detail when you look in the various dictionaries online and otherwise and google them it seems that the one is the other and the other is the one. So what it is called does not actually matter. It is significant though if we look at the departmental disclosure statement at page 9. Part 4.2 about significant legislative features asks “Does this Bill create or amend a power to impose a fee levy or charge in the nature of a tax?” and the answer given is no. The explanation is that “The levy is not proposed to be greater than cost recovery and there will be a clear relation to the costs of the functions performed. The funds collected will be held in a Trust Account to be used solely for funding the cost of the levied services. Given this officials consider the levy is not in the nature of a tax.”So whether it is regarded as a tax or a levy—and there is obviously some difference in the mind of the Government or at least in the minds of the officials who drafted this particular statement—it raises a question that goes back to a theme that I have raised in earlier stages of this debate. When we say that the funds collected will be held in a trust account if we by a little stretch presume that the consolidated account for example is a trust account—because in a manner it is—to be used solely for funding the cost of the levied services one would presume or I guess one could be forgiven for presuming that the purpose of a Government raising tax at all or raising revenue at all through whatever means would be to fund the cost of levied services. In other words the things that the Government does it has to raise money for and I do not see that there is a difference in that regard between money being raised for a purpose specific to government and money being raised by a Government specific to a purpose.What it does get back to—and this is the point I have been making and the one that Mr Shaw picked up on as well—is whether or not the $100 million that this levy tax fee or whatever is intended to raise is going to be additional to baseline funding for biosecurity as it currently exists or not. This is fundamental to our support or lack of it for this bill. If we are talking about $100 million extra going on top of what we currently spend on biosecurity we are all for that and that will swing us around. We will come in behind it and say: “Good on you Minister.” The Minister has made a point over his time as the Minister for Primary Industries of saying that biosecurity is his No. 1 priority. We absolutely support him on that and in fairness I think he is genuine in that. He may struggle at times I think to extract a sufficient degree of priority out of his Cabinet colleagues for the primary sector because their focus may be on other areas but I think he is genuine in wanting to improve the level of biosecurity. We may disagree on the methodology by which that is achieved and the processes he intends to go through but doubling the budget for biosecurity would make an enormous difference to whether or not New Zealand First could support this bill. I think it really does require some absolute clarity as to whether or not this levy—it is a new levy—is going to provide an additional stream of funding for biosecurity or whether it is going to replace the current stream of funding for biosecurity.Again I come back to the point the Minister of Customs made earlier when talking about cost recovery whereas Minister Foss and Mr McKelvie have talked about boosts. Either it is a boost or it is a cost recovery. It is one or the other. So we are talking about either another $100 million or the same $100 million coming from somewhere else. That is really quite crucial.Hon Annette King: Extra.RICHARD PROSSER: I know yes. People have said “extra” and other people have said “cost recovery”. So it is one or the other. I wonder whether perhaps then—if we want to go back to the title of the bill—we could say that it should be called the “Border Processing (Arrivals and Departures) Additional Levy Bill”. That would clarify it completely saying whether this is additional funding or not.I also want to ask another question and I am certainly hoping that some Government members are going to rise and take calls in this stage of the debate. Perhaps they are just leaving it for the Minister or Ministers at the end. If this measure is simply cost recovery and we look at some of the perhaps fringe pathways through which people and goods and so forth come into New Zealand we know that about 95 percent of incoming passengers are airline passengers about 4 percent are cruise ship passengers and the other 1 percent are yachts private jets military personnel and so forth—and never mind that there are diplomatic visitors and so forth guests of the Government who we already know from prior Government statements will be exempt because it is not appropriate to charge guests of the Government money to come in. But if we are talking solely about cost recovery then I cannot see that it is feasible in any way to imagine that for $16 a person it warrants sending an inspector up to say Ōpua in the Bay of Islands to inspect the crew of a yacht coming in. It cannot materially or physically be possible to adequately inspect a number of people coming in on a yacht and that yacht itself at $16 a head. So that in itself begs the question: if the levy is not sufficient for these sorts of things is it going to be topped up from general Government funding? And if that is going to be the case is that going to be across the board? Can we please have some clarification from the Minister or from one of the Government members as to whether or not that is going to be the case. Thank you.Hon NATHAN GUY (Minister for Primary Industries):This is a great opportunity to take a call on this very important bill that we are debating this evening. Thank you very much for the contributions that I have heard this afternoon and this evening in the first and second readings and now in the Committee stage.It is interesting to put some balance into this because there has been quite a focus from the left about how this is going to really harm the tourism industry. I think they have not done their research well enough. It is interesting that some of the comments that I have read are that the tourism industry in 2013 indicated that it was not opposed to a border levy. This issue has been around for quite a period of time—in fact Labour even considered it when it was in Government. What is also interesting is that the Flight Centre Managing Director Chris Greive said: “So long as there are real benefits for our customers and the additional fees are spent on ensuring the customer experience is as best it can be through keeping border processes updated and investing in improvements then we would not see these new charges as a negative.”Hon Annette King: Did you consult them?Hon NATHAN GUY: So I did not hear that from Annette King. I did not hear that. All I heard was rhetoric from Annette King. There is no balance in Labour’s argument this evening.What is also missing in its rhetoric are other public comments—other public comments that I have seen that Annette King might be interested in. The chairman of Kiwifruit Vine Health says it is both logical and sensible to implement a passenger surcharge that will go a long way to futureproof the cost of New Zealand’s biosecurity system currently borne by New Zealand taxpayers. That was from Kiwifruit Vine Health chairman Peter Ombler. Annette King did not make any comments about that.I also want to quote the Dairy Companies Association of New Zealand which thanked “the Government for its commitment to responding to the changes which are altering New Zealand’s biosecurity risk profile … DCANZ is encouraging the public to see this levy within the bigger picture of biosecurity for New Zealand … Biosecurity is not just concern for primary industry; the introduction of didymo ‘rock snot’ has permanently altered many waterways and affected recreation activities.” So it is interesting that the Dairy Companies Association of New Zealand is straight away not only talking about biosecurity but moving into biodiversity and the fact that if we do not strengthen our borders with an increase of volume and risk then our tourism industry is going to be affected. Annette King has not acknowledged that in 2001 when the UK had foot-and-mouth disease it affected their tourism industry by about NZ$15 billion.What is also interesting are other comments I want to bring to the attention of the Committee from Horticulture New Zealand. What the Horticulture New Zealand president said was: “The good thing about this levy is that as the number of visitors increases so will the revenue it generates to cover the increased cost of processing passengers and the risk they represent.” The Horticulture New Zealand president goes on to say that the suggested levy “is still a long way off the $58 charged by Australia a country with similar biosecurity requirements to our own”. So on the one hand we have the primary industry saying: “Good on the Government for bringing this in.” and actually one of them is saying it should be even higher. We also have a departmental disclosure statement on the Table tonight which some members have referred to that says that the impacts on visitors are going to be low. Yes we have got a regulatory impact statement that is going to go out with the discussion document and that will answer Annette King’s questions. That document we propose to be out in June.Also Annette King has raised—I am not sure whether it is mythical or not—this 2003 agreement. I have asked my officials to have a look and see what they can find on this agreement. They cannot actually find anything official about this agreement. What I would say is that time has moved on from 2003. Our visitor numbers are growing. Our risk profile is also increasing. This is about fairness. This is about 2015. This is about passenger numbers forecast to grow at 4 percent a year for the next 6 years. This is about focusing on risk passengers. Also can I clear up another point that has been made—Hon Annette King: And they bring nothing to New Zealand. No benefit to New Zealand—$10 billion.Hon NATHAN GUY: If Annette King would give me a moment I will try to clear it up for her. She might be interested. This is about a levy. Over the next 3 years or so it is going to generate about $100 million to $105 million for biosecurity run by the Ministry for Primary Industries and the Customs Service. Currently that is funded by the taxpayer. We believe it is fairer that those who are utilising those services—55 percent of those are foreigners—should pay for the use of those services. As our volumes increase by what I have said—estimated to be 4 percent maybe 5 percent a year looking out—that money will come in with that passenger. So to put it another way as more people come into New Zealand from overseas the funding will follow them. That means that our services will be able to continually improve and be bolstered.Can I clear up another point for Mr Shaw who has made I think a very good contribution to the debate this afternoon and this evening. Mr Shaw gets it. He gets it. He realises that this levy is about strengthening the biosecurity system. Mr Shaw gets it because he knows that if we have a biosecurity incursion it affects our tourism industry. Mr Shaw also gets the fact that it could have an impact on biodiversity.Mr Shaw has raised another comment that I want to clarify and that is about the money that has been allocated in Budget 2015 for the Customs Service and the Ministry for Primary Industries which equals about $30 million. That is going to be focused in the next 4 years on further strengthening the biosecurity and customs systems. That is extra money that I have been able to get out of the Government from the taxpayer to further strengthen the biosecurity system. That is going to be focused on more detector dogs more X-ray machines more audits of our import health standards and more visits to offshore countries where we bring produce and trade from to check that they are following and adhering to the import health standards. So this is more money. This is a significant investment in the biosecurity system.My challenge to New Zealand First which wants to run around the regions of New Zealand and say that it is the regional party is to get on board with this legislation—get on board and support it. The primary industries Mr Prosser are backing this. The primary industries realise that more needs to be done. They realise that this is about fairness. So as volumes grow the money will increase. That means more of a focus on the biosecurity passenger system.The other important thing in this debate is to realise that this money goes into a trust account—a memorandum account. It must be spent—it must be spent—through the Ministry for Primary Industries Biosecurity New Zealand and the Customs Service on the passenger pathway. That is an important point to make this evening in the debate.So in conclusion I support this bill. It is about fairness. It is about a growing volume of passengers coming across our border. It is about a risk profile that is changing. It is about the Ministry for Primary Industries and the Customs Service being more responsive. It is about protecting our primary industries. That actually by the way enhances tourism because a lot of tourists come to New Zealand to enjoy our biodiversity to enjoy the great outdoors and to enjoy what New Zealand has to offer.KELVIN DAVIS (Labour—Te Tai Tokerau):I would like to thank the Minister in the chair the Hon Nathan Guy for that because we do get it. We do get that this is about our biosecurity and about protecting our agricultural interests but there are a few things that we do not get. One of the things we do not get is why there were cuts to biosecurity 4 or 5 years ago and why 54 biosecurity staff members were cut 4 or 5 years ago. This is just a replacement—this tax. And it is a tax and let me tell you why I know it is a tax aside from the OxfordDictionary as well as the Collins English Dictionary saying a tax is a levy and a levy is a tax. I also checked the Māori dictionary and the Māori dictionary says that a levy is a tax and if us Māori say it well then it must be true. So what we do not understand is why there were cuts 5 years ago and why this is now happening and why all of a sudden it is really important that we get more in tax to replace those services that were lost.I have a few questions and they stem from some of the comments made by the National Party members during the second reading. One was from Ian McKelvie. He said: “the levy will not put an impost on those who cannot afford to pay it.” I am not sure what that means. If people cannot afford to pay it then of course it is going to be an impost. So I would like the National Party to explain exactly what that was meant to mean.Another question I have is how much this will cost to administer. If it is going to cost $6 to fly out of New Zealand how much of that $6 is actually going to go into the administration of it? If I can just go to the police vetting legislation that the Law and Order Committee is talking about one of the concerns of submitters about the $7 fee for police vetting is that most of that $7 is actually going to be used to administer the fee. That is a question I have for the Minister. Exactly how much of that $6 fee to go out of New Zealand is going to be used up in administration? If the biosecurity threat comes from tourists coming into New Zealand then why do you not just exempt New Zealanders who are flying out? New Zealanders flying out of New Zealand do not pose a biosecurity threat to New Zealand. Sure when they come back in I can understand that they may bring in an apple or something such as my wife did when she came back from Australia one day and it cost us $400.I also have got a few questions based around section 140AB “Contents of border processing levy order”. It is around the word “may”. It says: “A levy order under section 140AA may”—it “may” so it is not saying “it will”. It is just saying it may “prescribe different rates of levy”—or it may not—“on any differential basis for different persons or different classes of persons:”. That is really unclear—first of all that it says “may” and not “will” or “should” or “must”. It says it “may”. But what is a different class of person? I am really not quite sure what that means and I would like the Minister to explain that. For “different persons” why would one person be prescribed different rates over the other? It says it may “prescribe a maximum rate or maximum rates of levy:”—so may or may not? That is still unclear.The bill says it will “provide subject to such conditions as may be prescribed for extensions of time for the payment of levy:”. Will there be extensions of time for the payment of this levy or not? What is going to happen to people if they need to have an extension of time? That is unclear. It will “provide for the payment of additional or increased levy in the event of late payment or non-payment:”. So will there be increased levies if there is non-payment of the levy or the tax? It may “provide for circumstances in which levy paid may be refunded:”. What are those circumstances for which the levy may be refunded? We have got no idea. It is very unclear as to what the circumstances may be that the levy would be refunded and to whom and under what conditions. It would be good for the Minister to explain that to the Committee. The bill may “require that levy funds payable be held on trust in separate accounts.”—it may “require that levy funds payable be held on trust in separate accounts.”I would like to know the answers to those questions. I would like to have those issues cleared up. This word “may” or “must”—it says “may” in the legislation; should it be “must” or not? So those are just a few questions just to add to the debate that I would like the Minister to clarify for the Committee. Kia ora.RINO TIRIKATENE (Labour—Te Tai Tonga):I would just like to add further comments in addition to Mr Davis’ because the amendments to the Biosecurity Act grant a very wide and broad discretion to the Minister to set the levy—the rate and the conditions around that levy. It is a very very broad discretion and there is no legislative guidance around considerations that he must take into account. At the end of the day the Minister can effectively set whatever he wants in terms of the rate. There is no control on that discretion and that is why it is really dangerous to impose a tax through legislation under urgency in these situations.As an example I would just like to seek the Minister’s clarification around. As part of his discretion it says here in clause 5(4) of the Biosecurity Amendment Bill (No 2) that the Minister “must consult persons who the Minister believes are representative of interests likely to be affected substantially by” the levy order. That is completely up to the Minister—who he “believes” has interests that are substantially affected. I am just wondering whether the Minister could advise which groups would be substantially affected because in my mind a major group that will be substantially affected will be inbound visitors—tourists. How is the Minister to consult with them? Is he going to stand at the airport in the arrivals lounge and have a survey or have a chat have a kōrero? Because they will be substantially affected by this.It is very unclear but it is a very very broad discretion that is granted to the Minister. This is a tax. It is not good practice for this Parliament to be granting broad power to a Minister to be able to impose these rates and these conditions really as he sees fit. I would like to ask the Minister how he intends to consult these substantially affected groups. Who are these substantially affected groups? How does he intend to do that? I know that Government members have already talked about advising on the rates and the levies because it is true that the actual end number is unknown. We do not know the cost that will be imposed on travellers. There has been talk about $16 $22 $32 but you must also add to that other departure taxes that are also payable by travellers. There are a range of costs that are all factored in a range of taxes that need to be considered. That is why there is just such a broad discretion given to the Minister that it is really beyond the scope.I am also really unsure about some of the drafting in these bills and the consequences of some of the provisions. Because if I look at the Customs and Excise Amendment Bill (No 2) there is the provision here that—you have got two methods by which the Crown can currently recover the processing costs. There is the Airports (Cost Recovery for Processing of International Travellers) Act and that legislation I believe allows the Crown to collect from the airport companies the cost to the Crown of setting up biosecurity customs and other services including the services that are envisaged by this bill. So the Crown can collect the cost there from the airport companies. It is also talking about collecting the same costs from travellers. I know that the Government is wanting to do an exclusion say that airports that are currently under the former Act will be excluded from this piece of legislation. But it will lead to confusion.The easiest way I can think about it is this. Hypothetically a person departs from Christchurch International Airport. Christchurch International Airport pays the Crown the costs of recovering and doing the biosecurity screening under the Airports (Cost Recovery for Processing of International Travellers) Act and it is subject to that Act. So what does that mean? Does that mean that every traveller who is leaving from Christchurch will not pay the travel tax? If that is the case how will you administer that? How will you be able to administer all the differential rates that will apply for the two different regimes that will be at play? In one case you will have an airport company paying to the Crown the costs to process and in this present case you will have the traveller paying the Crown the cost for them to be processed. So there are real practical issues that I see arising out of the application of this legislation and they are why this legislation should be referred to a select committee and it should be subject to greater scrutiny from all the relevant parties that will be interacting with this legislation.As we have heard the Minister has not consulted with the tourism industry or the airline industry. Of course you are going to have the primary industries sector clapping its hands at this legislation. Who would not? This is really good for biosecurity and we all want strong robust biosecurity systems—absolutely. Of course the primary industries sector would say that but it misses the point in terms of there being no regulatory impact statement. There are real practical issues here that I see that could pose some real difficulties in the application of this law. I would just like to ask the Minister how he intends to deal with all of these matters.Could I ask this: what are the chances of bringing this legislation to some sort of select committee so that some proper scrutiny and amendments could be made? Because what I do not want to see is the passage of this legislation and then as has occurred with some Crown minerals legislation just recently passed—here we were at Parliament and the Government was back 3 weeks later saying: “Oh we need to make some amendments to it.” That is a very real possibility just on my cursory glance at the legislation as it stands at the moment. That is a plea that I would make to the Minister. Let us refer this legislation to some sort of select committee review process so we can really look closely at it. Otherwise once it is passed into law what will we have to do again? We will have to come back in a few weeks’ time and put through some more legislation to try to fix it up. That is a waste of Parliament’s time and it is not good lawmaking.STEFFAN BROWNING (Green):Earlier we heard from the Minister for Small Business and Minister of Statistics and he is also the Associate Minister of Immigration and the Associate Minister of Transport so he should know about this stuff. He was very very adamant and strident and was yelling across the Chamber that this was $100 million more for biosecurity. I agree with Richard Prosser that that would be fantastic. On top of the Budget Minister Guy you said there would be about $25 million of new money but the Hon Craig Foss says there will be $100 million of new money. You have gone some way to try to tidy that for him I think because I think he has got it wrong. I would love to hear that there is $100 million on top of what was being spent in the last budgetary year. You can nod or shake or whatever. Is there $100 million more on top of past spending on biosecurity? I do not think there is is there? No answer.Hon Member: Do you want an answer?STEFFAN BROWNING: I hope I will get an answer. Just a simple question: is there $100 million more—as the Hon Craig Foss said and insisted on multiple times—over and above what we have had?The other question I have because any more money for biosecurity is good money is: why is there a drop for business for their importation for their biosecurity system entry levy? It is not big but there is a drop. If I look up the Customs Service at the moment it is $17.63 and it is just going down either to $13.15 per importation or $17.37. It is not a big drop for that part—the $17.37—but it is for the $13.15.The question as well is comparison. So I go to Aussie soon and when I come back I will have a suitcase or whatever. These guys are bringing in how many containers for that? One container 20 containers or whatever—I know there are some other fees for them; they are not big either. So is the Minister going to be able to go and say: “We’ve looked out for you in business we’ve actually dropped your fee and we’ve put it on to the tourists coming in.”? I think—and we are supporting the bill—that is right for the tourists but I do not think there should be any reduction anywhere in terms of levies and biosecurity so I would be very keen to see that tidied up or clarified. But it is there; I have got it from what has gone through in the Order in Council and what the current fees are. I am also interested in as we have heard from others the exemptions. What about the exemptions? Who is going to be exempted—who why when what and what for? “Different classes of persons”—what are they?Leaving that—I hope for some clarification around that—I was very pleased to hear the Minister say that there was going to be some money specifically around import health standards. We have got the imported pork now and 52 percent of pork that is consumed in New Zealand is imported. We know that the pork industry—because the Biosecurity Act is wanting and does not have precaution in a meaningful way in it—lost through multiple courts and spent millions in the process of trying to defend its sector from a slack import health standard. They are the particular questions I would like answered.It is good that there is more money going to the import health standard. It did not seem a hang of a lot but there is some. We really do need answers to why businesses that are importing potentially multiple containers are going to have a levy that is very very similar to an individual with a suitcase. I want that individual with a suitcase to have 100 percent X-rays and it looks like you are doing that and are headed that way. I want to see more dogs coming in. I want to see more money. So are we going to have $100 million of new money on top of old money or is it that $25 million to $30 million - ish of new money only in the past Budget? Thank you.A party votewas called for on the questionThat Part 1 be agreed to.Ayes 72New Zealand National 59; Green Party 9; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 33New Zealand Labour 21; New Zealand First 12.Part 1 agreed to.The question was put that the following amendments in the name of the Hon Nathan Guy to clause 12 be agreed to:in clause 12 new section 288H(2) (page 8) delete “or declaration”;in clause 12 new section 288H(3) (pages 8 and 9) delete “or declaration” in each place.A party votewas called for on the questionThat the amendments be agreed to.Ayes 84New Zealand National 59; Green Party 9; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 21New Zealand Labour 21.Amendments agreed to.A party votewas called for on the questionThat Part 2 as amended be agreed to.Ayes 84New Zealand National 59; Green Party 9; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 21New Zealand Labour 21.Part 2 as amended agreed to.A party votewas called for on the questionThat clause 1 be agreed to.Ayes 84New Zealand National 59; Green Party 9; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 21New Zealand Labour 21.Clause 1 agreed to.A party votewas called for on the questionThat clause 2 be agreed to.Ayes 84New Zealand National 59; Green Party 9; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 21New Zealand Labour 21.Clause 2 agreed to.The CHAIRPERSON (Hon Trevor Mallard): I will point out it is unusual for the party that is declared the winner of a vote to ask for a party vote on the question but it is not outside the rules.The Committee divided the bill into the Biosecurity Amendment Bill (No 2) and the Customs and Excise Amendment Bill (No 2)pursuant to Supplementary Order Paper 79.Bill reported with amendment.Report adopted.Biosecurity Amendment Bill (No 2)Customs and Excise Amendment Bill (No 2)Third ReadingsHon NATHAN GUY (Minister for Primary Industries):I move That the Biosecurity Amendment Bill (No 2) and the Customs and Excise Amendment Bill (No 2) be now read a third time. We have had a very robust debate this afternoon and this evening and I thank the contribution from the House.Primary sector leaders as I have mentioned this afternoon and this evening in the House are welcoming it and some are even calling for a higher levy similar to Australia’s. I know that some tourism commentators are saying it will reduce the actual tourist numbers coming into New Zealand but I doubt that their concerns will actually materialise into too much when we look at those forward projections of tourism growing at about 3 to 4 percent a year potentially more over the next 4 to 6 years.These tourists who come to New Zealand come to enjoy in part the great outdoors. Our biodiversity relies on a very strong biosecurity system to avoid pests and diseases entering New Zealand. We have had numerous examples where they have entered and didymo of course is one that is pretty topical and that has affected many rivers in New Zealand. Of course that does not go down well with our clean green image that we like to promote our country on. The fundamental principle behind the introduction of the border clearance levy is that it is fairer that travellers who generate the need for these border clearance services contribute to the cost of these activities. Over half of the cost of the levy will fall on foreign tourists which the Government feels is appropriate. The levy will put border services on a sustainable footing by allowing funding to increase as passenger numbers rise. This is fairer. It is more responsive to managing the risk at the border and our officials at the border will continue to provide quality services.There is still much to do before we implement this on 1 January 2016: a public consultation period submissions to be analysed deciding on how the levy is to be collected what the final rate will be then striking a levy order and beginning to educate travellers before we move into 1 January next year.In summary I am very proud of this legislation. I am very proud of the contribution that the National Government has made in Budget 2015 to strengthening biosecurity and also of the contribution that has been made from customs in Budget 2015. The levy makes sense. It is about fairness and also importantly it is about a contribution for everyone who wants to be involved in biosecurity to get on board and engage in the Biosecurity 2025 strategy which is out there soon and is to be widely consulted on. So there is a lot happening in this space and that is why it will continue to be my No. 1 priority as Minister. I commend this legislation to the House.RINO TIRIKATENE (Labour—Te Tai Tonga):I am pleased to speak in the final readings of this legislation which has now been divided into two. We are disappointed on this side of the House because these bills impose a tax and that is very clear. It has been established throughout the debate. It has been acknowledged by members on the other side—two members on the other side. This is the imposition of a tax—a new tax—and we are doing it under urgency. We are doing it in a rushed manner with no public consultation no scrutiny no engagement with affected parties and there is no reason for that because the Minister has just acknowledged that he is about to conduct public consultation on what the levy fee should be and all the conditions that he might impose around it.Ultimately it will be his decision as to what he recommends and what travellers will actually be charged but why go through this process in such a rushed manner now when he is already intending to go through a consultation process virtually immediately? I think it is just all around the wrong way. It is poor governance from this Government—sorry it has been a very long day Mr Deputy Speaker; ha ha! It is poor from this Government and yet again it is another broken promise as we have established. And it has been acknowledged on both sides of this House that this is a tax. The Government promised no new taxes and it has flip-flopped on that and here we are.Here it is imposing a tax that will hurt ordinary travellers. Every Kiwi who wants to travel—who wants to leave our fine shores and go on a holiday and go and visit loved ones—will be struck with this charge. Likewise our important tourism industry—all our international visitors who bring a huge contribution to our country—will face an additional charge. We do not really know the impacts but we know that in other jurisdictions there is a reduction in air traffic numbers and the like through the imposition of such levies. That is why our tourism industry has fought it so hard.On the flip side of course we want strong biosecurity systems. That is a given given the nature of our economy and our reliance on the primary sector. It is no surprise then that the primary sector industries are all applauding this tax. They are not having to foot the bill; travellers will foot the bill. But it need not be the case because the services that have been provided through biosecurity screening and the like have always been supplied by the Government through the taxpayers as a whole. That should continue to be the case. Unfortunately what we are seeing is this arrogant Government pushing ahead imposing a tax and breaking the promises that it has made to the nation.We are also concerned about the impact and the application of the legislation. It is hastily drafted. We do not really know whether it will do everything that it is intended to do. There could be unintended consequences—it has been rushed through that fast. We do not really want to be back here in a few weeks’ time trying to fix it up by putting through another piece of legislation. But that is what happens when you do things under urgency.Lastly I want to take Minister Wagner up on her offer to show me around the Joint Border Management System.Hon Nicky Wagner: Ah! Good. I’ll take you for a visit. We’ll go and have a look.RINO TIRIKATENE: Yes yes indeed. The Joint Border Management System—the $100 million lemon. We are still waiting to see the full functionality of that IT project. We are still waiting to see it. The due dates keep getting pushed out. The price tag keeps going up and up and up and we do not know the full extent of the functionality.We do not really know what benefits it is actually providing to the Ministry of Primary Industries. How does it help biosecurity screening for passengers? What happens? Yes it is great that there are 2 million entries into a Trade Single Window but what happens beyond that? Where is all the sophisticated risk and intelligence screening? That was the core purpose of the Joint Border Management System. That is what it was intended to do. Then to also retire the legacy systems—those old 20-year-plus computer systems which are still chugging away. Our whole primary industries are resting on these old 20-year-old IT systems which are still having to carry the load because we do not know what the Joint Border Management System has produced.And why do we not know? Because it is shrouded in secrecy. The Minister will not tell us what is going on. The Minister has been in dispute with IBM. They have had to renegotiate the contract they have had to reset the milestones they have had to reprice everything they have had to go cap in hand asking for more money and we still do not know what they have delivered. So Minister Wagner I would really like to take up that opportunity to visit because I want to know what the Joint Border Management System is what has actually been delivered what is behind the velvet curtain and is it actually doing what it was intended to do when we have paid an investment of over $100 million into it? By all accounts it is just another Novopay that you want to keep under a shroud of secrecy to hide behind lawyers and the like and dress it up with a whole bunch of gobbledegook technology language. We want to know exactly what we will get for that $100 million-plus investment whether it will actually be delivered on the due date or keep getting pushed out and whether the price tag will keep expanding.Those are my concluding remarks. We do oppose this bill. We oppose the imposition of this tax. We oppose the fact that this Government has yet again misled the country and gone against the undertakings that it has given to the public and now travellers from far and wide and anyone who wants to go on a trip will soon be facing another hefty increase to their travel costs. That is a very unfortunate circumstance. Thank you.Hon NICKY WAGNER (Minister of Customs):It is with enormous pleasure that I rise to support these bills that will establish the border processing levy. I want to start by acknowledging the questions from the member Rino Tirikatene and say yes I am very happy take you to see the Joint Border Management System to see how successful it is and how well it is working. At the same time I am very happy to offer you a free complimentary full body search if you would like to take that up.New Zealanders have told us that they want a safe border. This levy will cover the costs of managing our border efficiently and well. It will cover the costs and only the costs of managing our borders. It is to protect us against illegal travellers and the illegal goods that they carry with them—drugs firearms or objectionable material. It is to protect us against biosecurity risks—things like fruit fly and didymo and of course the biggest threat of all to our economy foot-and-mouth disease. I think it is really interesting and I would like to point out to Mr Prosser that yes good biosecurity will protect our agricultural industries but it also protects our tourism industry. As we have heard when they had the foot-and-mouth outbreak in the UK it cost nearly £8 billion—which is about NZ$15 million—in terms of travel and tourism costs.I do want to add to the Hon Nathan Guy’s discussion in terms of the regions. The regions are the places that provide our agricultural exports. The regions are often where the people who operate our tourism industry live. So if we want to look after our regions we need to impose this levy at the border. I just want to say: let us forget about the semantics—tax or levy levy or tax. Forget about the semantics—this payment is all about cost recovery and only cost recovery at the border. And it is about choice remembering that only 42 percent of the people who go across our borders are New Zealanders. Every traveller will have to pay to go across the border. Everybody will have to pay the levy but they will pay it only if they choose to use our border services—only if they choose to use the services.Another question that Mr Prosser was asking me was how we are going to collect this money. The key issue here and it does reflect on what the member Jacinda Ardern was talking about is to make the collection of this border clearance levy as simple and as easy as possible. To do that we are proposing to use existing payment systems. The airlines would pay a monthly lump-sum payment to the Civil Aviation Authority and the cruise ship operators would pay the Customs Service. These funds would then be allocated to the Customs Service and the Ministry of Primary Industries. For other customers such as the people who travel on private yachts or aircraft the levy will be collected directly from them as they enter and depart New Zealand. Again the member Steffan Browning was concerned about the cost of managing the border for these private yachts. We do that now. We make sure that every yacht is processed correctly at the border.Finally for Mr Shaw I do not think he needs to be concerned about how we manage the intelligence at the border. There will be no changes to our normal customs procedures. We have to have a face-to-face check against their documentation and that also reflects why there is a cost going in and going out whereas only arrivals have to do biosecurity. Whether people are going in or out we have to have a face-to-face check at the border.So finally just to recap on why this levy is good for New Zealand and New Zealanders it is flexible and it is futureproofed. As traveller numbers increase so will the levy increase and interestingly enough that is not just about numbers. As these numbers are increasing there is a greater diversity of types of travellers who come across our borders; there is greater complexity at the border and those funds will gather so that we have the resources to manage that.We certainly want to make sure that our borders are efficient and effective. We do not want to see the sort of congestion that you might see in Los Angeles or Miami. It is fairer. This levy is fairer because it applies to the people who use the services and it applies to the people who provide the risk to us. Just like the system that we have for goods travellers will pay their way to get through the border.Finally it is fit for purpose. It is international best practice to have a levy at the border. The same principle is used right around the world. The only difference is that our levy will be more cost-effective at about $20 whereas Australia is at least double that the UK is over five times that and also Canada and the US. At the moment New Zealanders are in a lose-lose situation. They pay all the costs at our border for international visitors and then have to go and pay the costs at other people’s borders—lose-lose. So basically I really support this bill. It is good for New Zealand and good for New Zealanders. Thank you.ADRIAN RURAWHE (Labour—Te Tai Hauāuru):It is a pleasure to rise to speak on the bills divided from the Border Processing (Arrivals and Departures) Levy Bill because I want to put my point of view to the general public about what this is really about. This is actually really about the Government collecting more tax money because it cannot balance the books. That is what this is really about and it is my pleasure to tell the public that.On this side of the House we are very serious about biosecurity and about border security—so much so that through 9 years of our Labour Government the last Labour Government not once did we put in an arrival tax or a departure tax. Why was that? We did not need to because we know how to run the economy. We know how to make a surplus. These bills are about collecting more money so that the National Government can scrape and crawl up to a minor surplus next year. It promised it this year and has failed. It has failed seven times to deliver a surplus and that is what this legislation is really about.We have heard from the previous speaker Nicky Wagner that New Zealanders are in a lose-lose situation. Well sorry Minister but you cannot have it both ways. Here are some facts: international visitors spent $10.3 billion last year in the New Zealand economy including $700 million in GST. Well when we were the Government we managed the whole economy and paid for border security and biosecurity through the taxes like the $700 million that had been collected through GST. The fact of the matter is that the Government is unable to do that and it should fess up that the border levy is a tax.Can I also mention the lack of detail around exactly how much is going to be charged? We are hearing figures like “about $6” and “around $16”. This paper here says it will be around $36 for a return journey and it says that is lower than Australia’s but we do not know that for a fact. James Shaw in his contribution criticised the Labour Party for voting for a bill that actually had the formula within it. Well the formula for this for the benefit of that member is not in here and we do not know it and they are voting for it. How can that be right? We need to have clarity around exactly how much people are going to be charged at the border to come into our country. You know that is kind of fundamental.The Government has got the process in the wrong order. It is in the wrong order. You do the legislation after the consultation not before. You know give the public the opportunity to be consulted on all parts of these bills not just a little bit; not just a bit here and agree that we are going to pass this bill and we will let you know the detail later—trust us we know what we are doing. Well if the public were to trust you then you would not have cut KiwiSaver eight times—and we have been through that legislation today.I suspect that there is probably going to be a statutory amendment bill coming up because that is what happens when you rush legislation through. People are not consulted especially when they are told—as we see in the sign my colleague held up—there are no new taxes. Well you know when it looks like a tax sounds like a tax guess what? It is a tax. It is a tax and so much so that members opposite got a little bit confused and started referring to it as a tax. And they are right. That is exactly what it is. I take this call to speak out against it and I disagree with—Alastair Scott: I raise a point of order Mr Speaker.Mr DEPUTY SPEAKER: I anticipate the point of order. Yes the sign should be removed.Alastair Scott: I am sorry to interrupt but my understanding is that the member can use—Mr DEPUTY SPEAKER: I have dealt with the point of order. I anticipated your point of order.ADRIAN RURAWHE: Thank you Mr Deputy Speaker. So finally I would just like to say we oppose this bill for all of those reasons and I think that once again the Government has got it wrong. Thank you.IAN McKELVIE (National—Rangitīkei):The Hurricanes are dominant the New Zealand cricketers are dominant and the National Party and its allies have been dominant for the last 3 days. I have much pleasure in commending this very pragmatic piece of legislation to the House.STEFFAN BROWNING (Green):I am not going to be that fast. I am pleased to be speaking to this legislation arising from the Border Processing (Arrivals and Departures) Levy Bill. It is very good to see tourists paying their way towards biosecurity. I am disappointed that we are not having $100 million in new money on top of old spending—very disappointed with that.There has been a considerable number of incursions. There are continuous incursions—30 to 40 a year we hear—and each one of them could cost our primary industries which are the backbone of this economy and which will remain the backbone of this economy for a very long time probably for ever. We need to be putting this extra money in. It needs to be extra money. However getting a move on and getting further contribution is excellent.What we really need though is the Government that front bench not holding back a real increase in spending on biosecurity. We need that. We need it very very urgently so that we can speed up incursion fix-ups and repairs when things do get in but better still to increase those inspections to six-sided on the containers and to get business paying its fair share by increasing the levy on business as well not just on tourists coming in and out.I think the noise on that side suggests that there was an imminent increase in their excise tax but there is no imminent increase in the excise tax. The people barracking from the left-hand side of the House will get their drink in due course and very soon. So we will support this bill. We would love to see a lot more money going into biosecurity. Thank you.RICHARD PROSSER (NZ First):I am disappointed. I am disappointed because at the outset of this process I really wanted to be able to support this legislation arising from the Border Processing (Arrivals and Departures) Levy Bill. I really did. I genuinely did. We have got to the end of it and I cannot.My colleague Mr Browning put his finger on the reason and put it quite succinctly as to why. It comes down to whether or not this is actually additional money. It turns out that it is not. If it was if we were talking another $100 million of extra money on top of what we currently spend on border protection we would be all in favour of it. I asked several times through the course of the stages of this debate for a straight-out confirmation or otherwise from the Ministers involved as to whether or not this was additional funding. I did not get a yes. We got some fudging and some smoke and some mirrors and a lot of indication that actually all we are doing is shifting the funding stream from one place to another.On the face of it yes it is about fairness. We agree that it is all about fairness. It is fair that those who pose the risk should pay for the risk. We do not actually have an issue with incoming passengers paying a biosecurity levy if that was what it was or a tax—call it what you want. And do you know what? I do not believe that “Joe Public” the international traveller would care all that much about paying $16 to come here either. I do not think they would notice frankly on top of several thousand money units from wherever you are coming from in the world to buy a ticket to come to New Zealand which is as far away from anywhere as you can get; another 16 bucks is neither here nor there. It is embedded in the ticket and they will not notice. That itself is not the issue. The issue is whether that $16 which was going to conglomerate and become 100 million bucks is going to be extra money for biosecurity or not.We have heard that Kiwifruit Vine Health Horticulture New Zealand the dairy companies—all these companies are fully in favour of it. And I do not blame them. I do not blame them. I think they are supporting this because they believe they are getting another $100 million of extra funding and actually they are not. Actually all they are getting is some travellers paying what they used to pay out of tax. That in itself may be enough of an enticement for them to support this. They might think “Well OK here’s 100 million bucks or whatever it is that the country spends on biosecurity coming out of the travellers’ pockets not out of my pocket as a primary sector business person.” That might be enough to make them happy but actually I think they are excited about this because they think “Wow! All of a sudden we are going to get the extra funding for biosecurity that we have needed and wanted for a long time.” And I think they are going to be sorely disappointed when they find out that actually it is the same amount of money; it is just coming from a different source.I could be wrong. I will say this now. If we arrive at this point in the cycle next year when we have the Budget and we look at the figures as they have been allocated and as they have been spent and we look at the spend on biosecurity and we look at this levy and the money that has come in from it since then or the year after—however long it takes however long it takes to get there—and we discover that here is the amount of money that we were spending and here is the amount of money that we have spent and all of a sudden there is this massive increase I will eat a big slice of humble pie. But I do not think I am going to be eating that slice of humble pie because I do not think we are going to find—David Bennett: You might as well have the whole pie!RICHARD PROSSER: Oh here we go—Mr Bennett. It must be getting late. It is approaching the witching hour and the bats are out in the belfry.I am not going to be eating that slice of humble pie because that extra money is not going to be spent. The Minister talked about New Zealand First getting in behind the regions. Well we are in behind the regions and part of us being in behind the regions is me standing here explaining to the regions that actually this thing that you are being sold as a big increase as a big massive new pot of money is not that at all. All it is is that it is being taken from here instead of being taken from there. It is the same amount of money. We are not going to get the 100 percent inspection of all passengers all luggage all mail and all freight. We are not going to get the inspection—Hon Nicky Wagner: Dogs sniffing away.RICHARD PROSSER: Oh we are getting some more sniffer dogs but we lost a whole bunch of sniffer dogs in just the last couple of years so perhaps we are getting back up to where we were when we had just an insufficient number of sniffer dogs instead of a massively insufficient number of sniffer dogs.We are not going to get all our shipping containers inspected. Arguably you could say that the number of shipping containers and freight coming into the country provides a far greater biosecurity risk than passengers coming in on cruise ships and aeroplanes. But as it stands about one in four shipping containers gets inspected and after this levy is imposed about one in four shipping containers will get inspected. So those risks will carry on coming in. They will carry on coming in.There is the issue of urgency which has meant that we have not been able to delve into this matter as closely as we have needed to. There will be a process of consultation from here on in and we will design this levy and that will be all well and good. But actually it should have happened beforehand. We have been through that. That is another aside. The outgoing levy—again this comes back to the issue as to whether this is new money or whether it is just a different source.When the Minister of Customs says that it is going to support customs activities for people leaving the country well that is fine but she also talks about cost recovery. So there is some money that has been coming out of general taxation to run the Customs Service so that you can walk out through the border and get your passport stamped or have the machine read it and now you are going to be paying $6 for that. That dosh that was being spent by the Government on that is not coming from that any more; it is going to come from the levy but actually nothing changes. There is no additional funding going into it.Stuart Smith: Would you say that again.RICHARD PROSSER: There is no additional funding going into it.Stuart Smith: No the whole thing.RICHARD PROSSER: The whole thing from the start? You will be able to watch it later on on In The House Mr Smith.I am going to wrap up by saying that I am genuinely disappointed because as I say we went into this process really with the hope that we were going to be able to support this legislation really hoping that we were going to discover that we are getting an extra $100 million for biosecurity—Callooh! Callay! It is Christmas. But actually we are not getting an extra $100 million for biosecurity. All we are doing is changing where it is coming from from one place to another place. Biosecurity is going to be the same. We are not going to get extra boots on the ground. We are not going to get the 100 percent inspection that we need. We are still going to be at risk. The incursions are still going to be coming in. We are still going to be faced with things like fruit fly. Foot-and-mouth ain’t going to go away.Ron Mark: Border Patrol.RICHARD PROSSER: Yes as Mr Mark says you just need to watch Border Patrol and see where the risks are.This legislation is not the silver bullet. I would go so far as to say that it is disingenuous. If the Minister had come out if any of the Ministers had come out and said: “Yes we absolutely guarantee that this is $100 million of extra money not just money coming from one place instead of another place.” we would have been able to support it. But it is not. It is smoke and mirrors. We cannot support this legislation.STUART SMITH (National—Kaikōura):With great pleasure I commend this legislation to the House.JAMES SHAW (Green):I am pleased to be able to stand and deliver my 23rd and final speech of this urgency session. I would like to start by saying to the Government that if you want to introduce urgency on matters that are frankly not urgent then you can sit here and listen to it. You can sit here and we will spin this out. This is punishment for introducing all of those bills none of which were urgent none of which had to be introduced under urgency. So you can just sit here and listen. It is regrettable that this legislation has been brought in under urgency with no ability to invite submissions. I completely agree with the Labour Party on that point and the Green Party has consistently fought against the use of urgency for things that are not urgent.We have heard comments both for and against the legislation from various businesses and industry associations but not within the normal boundaries of the proper legislative process and that is unfortunate. I have been in business for quite a long time and frankly I never met a business that did not like the Government paying for its costs. I do not want to be flippant with people’s concerns but when you look at the international comparisons and you consider that the level of this new passenger tax will be under 1 percent of the cost of travel on balance those concerns seem to be unfounded. This is a good way to raise revenue to cover this cost. It is transparent it increases accountability for the use of that money and it directly ties revenue and costs to each other. It internalises a cost of the industry that had previously been externalised to the New Zealand taxpayer. Part of the good news about this is that somewhere between 50 and 60 percent of the revenue here will be paid for by foreign visitors. So you can actually see this as a new form of foreign exchange earnings.The level of the new passenger tax is well below the international average. It creates a mechanism that we can use in the future for funding the Department of Conservation estate or to help out local authorities that currently carry a lot of the cost of infrastructure or marketing for tourism. The Greens have consistently been calling for more money for better biosecurity for many many years and we have been calling for new revenue streams to pay for it. So the Greens are very happy that National has listened to us after all of this time and we are very happy to support National’s new passenger tax. Thank you.IAIN LEES-GALLOWAY (Labour—Palmerston North):I was expecting another National Party MP to get up and tell us why this was such a wonderful bill but those members have given up. They have completely given up. We have exhausted them and they have realised that they have got nothing positive left to add to the debate tonight because they know that they are on the wrong side of this debate and they know that the public have found them out.This bill the “Border Processing (Arrivals and Departures) Tax Bill” is a metaphor for this Budget and this Government. First of all it is nothing more than smoke and mirrors. The Government has been telling us all night that this is somehow going to raise more money for biosecurity—the money raised is going to be applied to biosecurity and we are going to have a wonderful new more robust biosecurity system because of the money raised from this. But that is not true at all. This money is not all going to go towards biosecurity or at least the money raised here is simply going to replace money that has been spent on biosecurity before. Parties on both sides of the House have made a priority of biosecurity for years. There is nothing new about this Government talking about biosecurity being a priority. It is a priority for the Government and it is a priority for us because we know that biosecurity is so fundamentally important to our economy. It is pure smoke and mirrors. There is nothing in the way of additional funding for biosecurity as a result of this. Just like the rest of the Budget this bill is smoke and mirrors.Secondly it demonstrates a Government in absolute disarray. Government members have not been able to tell us tonight whom this new tax is going to apply to and who is going to pay this new tax. They have not been able to tell us what it is going to be spent on and they have absolutely no idea how much this tax is going to be. They are passing a new tax under urgency at quarter to 10 at night and they have got absolutely no idea how much it is going to be. On Thursday it was going to be $16; then by the first reading speech tonight it was going to be $20; by the second reading speech tonight it was going to be $22—they have no idea. This Government is in absolute disarray because it cannot honestly come to this House. It has come to this House and it is implementing a new tax without knowing who is going to pay it what it is going to be spent on or how much it is going to be—a Government in disarray.What this is of course is a new tax. Remember the promise—remember the promise: “No new taxes”. Look at that lovely picture of John and Bill there smiling lovingly into one another’s eyes and promising the country no new taxes. Well right through this Budget we have had three new taxes. It is the Government’s first Budget after the election—the election where it promised no new taxes—and this Budget has introduced no less than three new taxes. Why has the Government introduced three new taxes? Because it is failing to get the books back into surplus. This is not new money for biosecurity; this is freeing up other money so that the Government can desperately clutch at any straw available to try to get the books back into surplus. That is the truth of this. That is what is going on.Hon Simon Bridges: Let’s get a clutch of that hair.IAIN LEES-GALLOWAY: Hey Simon Bridges can talk about hair as much as he likes. Half of the country’s oil production resides in the hair of that man. No wonder he is the Minister for it—he is its primary consumer. This is a new tax and the reason we have got this bevy of new taxes from—oh he does not like it!Hon Simon Bridges: I raise a point of order Mr Deputy Speaker. I take personal offense at those comments. I have been getting a lot of good comments about this new hairdo.IAIN LEES-GALLOWAY: Oh dear. Government members do not like it all do they? They have got to find any way to try to interrupt a speech that actually points out the truth of this Budget the Budget that introduced three new taxes after they promised no new taxes. Any little way that they can to squeak the numbers back into surplus—the surplus that we have got to wait until next year for just like we had to wait until last year. This bill is a broken promise just like the rest of this Budget. This bill is a broken promise and it is a sneaky new tax which is what this Budget is all about. New Zealanders have seen through it. New Zealanders have absolutely seen through this Government. It promised no new taxes. It promised to get the books back into surplus. Promises promises—always around the corner always next year. You have got to wait wait wait under this Government because this has been the Budget of broken promises and sneaky new taxes. This bill is an absolute metaphor for that.This Government is in absolute disarray. It has had 7 long years to get the books back into surplus. It was nine surpluses on this side of the House and none—not one—on that side of the House. 9 nil—9 nil. That is the truth of it. That is the truth of it. The people of New Zealand are coming to understand that when it comes to economic management you cannot trust the National Party to run the Government books back into surplus. You cannot trust the National Party on its election promises because it will promise one thing—it will promise no new taxes and then it will introduce three just like it promised not to put GST up and then put GST up. No one can trust that Government any more—no one can trust that Government and this bill is just a metaphor for the whole thing. Of course we are opposing this bill. We are opposing the whole Budget because it is a broken promise to the people of New Zealand. They can see through it. This is step one towards the end of this Government and a Labour-led Government after 2017.TODD BARCLAY (National—Clutha-Southland):My heart goes out to the previous member who spoke Iain Lees-Galloway given that he cannot hold up a picture of his leader Andrew Little. He is having to hold up a picture of John Key and Bill English—your political heroes. That is why I support this bill.BARBARA KURIGER (National—Taranaki - King Country):Tonight we have seen the Labour Party which has been so full of dictionaries and rhetoric that it has forgotten the purpose of what these bills are all about. We have also seen Mr Prosser over there who knows exactly what is good for him and biosecurity in the regions but he cannot get his party to stomach it. And we have had an absolutely commendable presentation from the Greens who know exactly what is good for them. I commend these bills to the House.A party votewas called for on the questionThat the Biosecurity Amendment Bill (No 2) and the Customs and Excise Amendment Bill (No 2) be now read a third time.Ayes 72New Zealand National 59; Green Party 9; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 33New Zealand Labour 21; New Zealand First 12.Bills read a third time.Speaker’s StatementsUrgency—ReflectionsMr DEPUTY SPEAKER: Members it is a breach of convention for Speakers to ever be able to grade or rank the speeches that have occurred in the House. I would like to make a few reflections though.We have seen a number of firsts in the House. We have seen the bestowal of a new nickname on a certain member; I think “The Professor” might stick. I must say that I kind of like “Benson and Hedges” and I see there has been an amicable separation neither of them wishing to inhale each other’s second-hand smoke and mirrors. We have seen the ejection from the House of a certain member making his mark as the long-suffering Deputy Speaker’s first expulsion.The “Dr Michael Cullen Prize for Irrelevant History Lesson” goes to Chris Hipkins and the Belgian royal family. The “I’m So Pleased to Be Here in Urgency” prize goes to Deborah Adams Chamber officer who was ecstatic this morning when I arrived. She just said: “I just love urgency.” The “Jill Pettis Prize for the Most Persistent Interjections” with 15 repeats of the same phrase in a 5-minute Committee stage speech goes to David Clark. I woke myself up this morning at 4.15 screaming something about “the worst in 50 years”. The “Asenati Lole-Taylor - Paul Quinn Prize for Volume in a Speech” goes to Iain Lees-Galloway which is self-evident.I want to extend our thanks to Roland and Mary and their teams the security staff the Chamber officers Hansard and the cafeteria staff for their extended duties. My fellow Speakers would like to join with me too in thanking you all for the spirit in which you have engaged in the debate.The House adjourned at 9.52 p.m. (Saturday)