Foss Craig: Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill — In Committee 
Foss Craig: Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill — In Committee 
[Volume:666;Page:13453] 
CRAIG FOSS (National—Tukituki) 
: 
 It is very interesting to note that Carol Beaumont the previous speaker is advocating asset testing for superannuation which is what they do in Australia. So when members opposite get up and speak about the Australian superannuation scheme at the end of the sentence should be “and asset testing of the recipients”. It is fair enough to have the debate but they have to give the full sentence in order to give the correct context rather than just give blank numbers of contribution rates of 2 percent for KiwiSaver and of 9 percent for the scheme over there. Asset testing for superannuation is on the agenda of the Labour Party unless another Labour member denies that just as a capital gains tax is on the agenda unless another Labour member denies that. It would have to withdraw some of the videos out there from its various spokesmen and various press releases. What else is on the agenda? Oh yes a land tax is on the agenda of the Labour Party at the next election. 
What is not on the agenda of the Labour Party at the next election apparently is axing the tax. Labour members are voting for the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial matters) Bill. They sent a bus around the country opposing a tax switch on GST— 
Aaron Gilmore 
: Paid for by the taxpayer. 
CRAIG FOSS 
: —yes—but actually they would not reverse it going by the way they are talking and they are voting for this bill. Members on the other side should focus a wee bit. Let us get on with things that matter because those members would not actually axe the tax—at least that is the latest version but who knows? 
Members opposite also talk about economic literacy. Well there is no better example of the need for national standards of numeracy and literacy than a pamphlet Labour put out about GST recently. It talks about “National’s 15 percent GST” somewhat misleadingly conveniently and dishonestly—am I allowed to say that—while ignoring the fact that GST went from zero percent to 10 percent under a Labour regime and went from 10 percent to 12.5 percent in 1989 with 8 weeks’ notice and preparation under a Labour regime without any compensation whatsoever. That is in total contrast to what we have coming in on 1 October which is a change in GST from 12.5 percent to 15 percent and a huge reduction in income tax one of the biggest changes in income tax and other taxation rates in 25 years which will produce a $3.5 billion to $4 billion boost to our economy over the year. That is what is coming in on 1 October. Again when members opposite talk about GST changing and all the damage that may occur they need to finish the sentence by saying that it is accompanied by a switch from income tax to consumption tax. It surprises me that the Green Party is voting against an increase in consumption tax when we line it up with all its other rhetoric. 
I will come to the bill in one moment because there are some interesting clauses in it but I ask why people are struggling after so many years under a Labour Government. Yes there is a recession going on. Hopefully it has bottomed out. Hopefully we are coming out of it. But in 9 years of a Labour Government real wages in New Zealand increased by only 3 percent. Over 9 years they increased by only 3 percent. People who are going to Labour members’ offices and to our offices to tell us that they are struggling are quite right because under the 9 years of the Labour regime the affordability of living increased by only 3 percent and that was in the best economic opportunities and conditions that this country had seen in many a generation. Labour blew it. What it did was almost criminal. When Labour members have a go at us for trying to slow it down trying to fix it up I say that thus far after 20-odd months of the National Government real wages have increased by 8.7 percent—8.7 percent after only 2 years. That is a response to some of the somewhat silly allegations from members on the other side of the Chamber. 
A married couple on superannuation is about $120 better off after the 2 years or so of this Government because of changes to after-tax wages an increase in average wages and lower inflation and interest rates. Also the changes on 1 October will be indexed. At the same time that GST changes superannuitants will be paid up front. Normally that occurs a year or 6 months later in this case. All distribution that can be indexed will be indexed. If only members opposite would finish their sentences and get off their high horse. The contradiction is that they say all this stuff but they are voting for the bill. They are actually voting for the bill. A reduction in the number of speeches from members opposite would be a nice wee contribution towards eliminating global warming; I wait with bated breath. 
A couple of speakers from the other side have been talking about budgeting advice. That is a very good point and it is quite correct. Budget advisers around the country are seeing quite a few more people who are trying to balance their affairs. As I said earlier the affordability of living has improved somewhat over the last 2 years but after 9 years of only 3 percent growth in real wages people are struggling. When they go to a budget adviser what does the budget adviser do? The budget adviser looks at both sides of the ledger at how much money is coming in and how much money is going out at what they cannot afford what they would like to afford and what they need. The budget adviser looks at basic necessities. Imagine Dr Cullen or Mr Cunliffe going along to a budget adviser. What would the adviser say? He or she would tell them to stop all these silly promises and commitments that mean they end up borrowing money; to manage the money coming in try to distribute the income a bit more and try not be at the risk of recessions if they can; and to try to grow the real part of their wages. 
Jacinda Ardern 
: Don’t borrow for a tax cut. And suspend your super savings. 
CRAIG FOSS 
: “And suspend your super savings”—from a somewhat economically illiterate person over there. Here is a point: the New Zealand Superannuation Fund manages about $15 billion or $16 billion. It manages that and it will return about 4 percent or 4.25 percent this year. The Crown is borrowing about $15 billion at 6 percent interest this year to keep the lights on. [ 
Interruption 
] No the tax cuts are fiscally neutral. Again I am more than happy to lend some quite basic textbooks with nice diagrams—perhaps in comic form—to some of the members opposite so that they can understand what is going on. The real side of the New Zealand economy is having a boost after the real side of the economy being in recession for 5 years with no real growth and hardly any real growth in wages. Actually the tax switching and some of the other changes in this allegedly non-controversial bill are all part of setting that platform—for example the changes in the branch equivalent tax account regime the controlled foreign company changes KiwiSaver transportability and the transportability of the Aussie scheme to New Zealand. It is all good stuff and was done in anticipation of New Zealanders coming home as a result of the election of the National Government in 2008 and perhaps in 2011—we will see how that goes. 
I acknowledge the Finance and Expenditure Committee. The process around this bill at the select committee was quite admirable. I acknowledge that. Generally there was consensus across the committee. We made some changes to the bill that originally came into the House. I acknowledge the members of all parties I acknowledge the officials and I acknowledge the independent advisers. I look forward to the continued debate which will perhaps be somewhat more formed as we go through the clauses in the bill. Thank you.