Smith Lockwood: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
Smith Lockwood: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
[Volume:639;Page:9481] 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 I cannot say I am pleased to be speaking to the third reading of this Taxation (KiwiSaver and Company Tax Rates Amendments) Bill which is being rammed through all stages under urgency. National of course is perfectly happy to support the bit of the bill that reduces the corporate tax rate from 33c down to 30c; it is the rest of this bill that we do not like. The Government claims that subsidies for the KiwiSaver scheme are necessary because silly stupid dumb New Zealanders have not been saving enough money. That is Dr Cullen’s attitude: stupid Kiwis have not been saving enough money. Dr Cullen knows better and he will damn well make them save! 
 I want to put this to members. How on earth are ordinary Kiwis meant to save money when Dr Cullen now taxes them $20 billion more each year than when he came into office? How the hell are Kiwis meant to save money when Dr Cullen is taking $20 billion more off them? He is taking their hard-earned earnings off them and leaving them nothing to save. Dr Cullen admitted in the House the other day in answer to a question— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: There is far too much noise coming from this side of the House and there are many members who are not in their own seats. I would refer them to Speakers’ rulings 58/4 and 59/1. 
Dr the Hon LOCKWOOD SMITH 
: We do not mind because we know that those members are upset over this Budget. New Zealanders are not stupid. They know that Labour has been taxing them far too much since it came into office. As I was about to say in answer to a question in the House the other day Dr Cullen admitted his cumulative operating surplus. Does Dr Cullen remember the answer he gave to the question about what was the cumulative operating surplus since Labour came into office? Do members of the Labour caucus remember what the answer was? It was $35 billion. The cumulative surplus in the operating balance excluding revaluations and accounting changes since Labour has been in office is $35 billion. Dr Cullen has taken that off Kiwis and then he wonders why Kiwis cannot save! What has happened as a consequence is that Kiwis starved of cash have had to borrow. Dr Cullen has taxed them $35 billion in cumulative surpluses and left ordinary hard-working New Zealanders having to borrow. 
Dr Cullen thinks he is so smart that he has taxed them on all this money paid back Government debt put money into the super fund and left New Zealanders starved of cash. They have had to borrow money while Dr Cullen thinks he is so clever. We are opposed to this bill because Labour should be giving New Zealanders back some of the money they have earned. 
This bill is now of course subsidising Dr Cullen’s KiwiSaver scheme. It is interesting to look at what objective analysis says about that putting prejudice aside and looking at what the retirement policy and research centre at Auckland University says about it. We know that its spokesperson Michael Littlewood has a particular view on superannuation matters— 
Hon Dr Michael Cullen 
: Ha ha! 
Dr the Hon LOCKWOOD SMITH 
: Dr Cullen should not laugh at Auckland University. The work of that research department is actually objective analytical work. It shows that— 
Darren Hughes 
: Gerry Brownlee told him that. 
Dr the Hon LOCKWOOD SMITH 
: Dr Cullen actually once used to agree with him. Back in 2002 Dr Cullen said that it makes no sense to subsidise savings. Dr Cullen actually said that in 2002 and of course the research centre at Auckland University has shown through analytical work that subsidising savings does not work. So not only is Labour taxing New Zealanders to oblivion it is now going to subsidise its KiwiSaver scheme because it knows that without the subsidies it will do nothing yet close analysis of subsidised savings schemes shows they do not actually work. 
National members have been pointing out that sadly low to middle income wage and salary earners are not going to benefit at all from any of this. In fact they are going to suffer. If members look at page 16 of the Executive Summary Budget document they will see that it very conveniently spells out the increase in spending in this year’s Budget. One of the issues that has not been given a lot of coverage yet is the fiscal stimulus in this Budget. Labour has continued its track record of spend spend spend and the fiscal stimulus is more than the Reserve Bank of New Zealand was expecting. That means that mortgage rates will stay higher for longer. Low-income Kiwis will not be able to afford to put their 4 percent into this KiwiSaver scheme so they will not get any benefit out of those subsidies and get no benefit from that money-go-round. In fact they suffer; they will pay tax to fund those subsidies and will not get any of the subsidies. So the first thing is that low-income Kiwis pay the tax for those subsidies but will not get any of those subsidies. 
The second thing is that their mortgage interest rates will stay higher for longer because the fiscal stimulus in this Budget is higher than had been expected by the financial markets. The third thing is that employees will get lower wage increases because as Dr Cullen himself said yesterday there should be a trade-off so they will get lower wage increases. And what is more finally the “chewing gum tax” reductions that had been promised have been killed off by this Budget. It is little wonder that Laila Harré a former supporter of the Labour Party said she was so disappointed with this Budget and so disappointed with this legislation. It will hurt hard-working ordinary low-income New Zealanders. I have in my hand here today’s— 
Darren Hughes 
: It will be great for Working for Families. 
Dr the Hon LOCKWOOD SMITH 
: The junior Labour whip Darren Hughes should listen. These are the latest statistics today on New Zealanders leaving permanently. Does Mr Hughes know what these statistics show? The exodus is carrying on. In the year ended April one-third more New Zealanders went than just 2 years back. It is even worse. Up until last month we were losing them only to Australia. These statistics released today show that the net permanent loss or gain is not just a permanent loss to Australia it is now a permanent loss to both Europe and the Americas. Even when we allow for the huge influx from Asia we have lost New Zealanders in the month of April—a big increase in the numbers going—because they are sick of “Dr Cullen knows best.” They are sick of “Labour knows best.” They are going where they have more opportunity for themselves and their families. We will vote against this third reading.