Mapp Wayne: KiwiSaver Bill — In Committee 
Mapp Wayne: KiwiSaver Bill — In Committee 
[Volume:633;Page:4957] 
Dr WAYNE MAPP (National—North Shore) 
: 
 One of the issues I want to lay to rest is the ridiculous assertion by the Minister of Finance who calls himself the Deputy Prime Minister that National has a secret plan to somehow gut national superannuation. In case the Deputy Prime Minister is unaware of it National has accepted the savings scheme and as he himself would say that will actually future-proof national superannuation for about 30 or 40 years. It has a long-run future. So along with so many other things this Government tries to do Michael Cullen should not try to tell lies to the public of New Zealand. It is completely false and those members are doing it all the time. 
The CHAIRPERSON (Hon Clem Simich) 
: The member will withdraw please. 
Dr WAYNE MAPP 
: I withdraw. 
The Government has forgotten what its goal was for this whole scheme. Actually one of the guilty parties is one of the Government’s little helpers of elves Mr Copeland. Do members know what the Government’s goal was? It was to have a savings scheme. The Government wanted to have a savings scheme and it has been prepared to spend $400 million of taxpayers’ money in order to have one. A lot of people would say that is a good thing. The Government will even allow people to use some of the money for a first home deposit. A lot of people would say that is a good thing. The bill went through the Finance and Expenditure Committee and what did Mr Gordon Copeland decide to do? He decided to turn it into a spending scheme. 
This Government has absolutely no idea how modern mortgages work any more. It says that people can divert their money to pay off their mortgages. A lot of mortgages have floating levels so what would happen? A person may divert a bit of money out of the scheme with a Government incentive to reduce his or her mortgage. That person may then go back to the bank and essentially use the scheme as a cheque account—as my colleague Katherine Rich has said—and lift the level of the mortgage back up. So a scheme that uses a taxpayer subsidy to boost savings—on the face of it that is perhaps not a bad idea—has now because of the Government’s foolish acceptance of Mr Copeland’s plan been turned into some sort of general spending account. Effectively people will be able to use a tax deduction to pay for ongoing consumption. It has gone from being a savings scheme to one of ordinary consumption because that is how modern— 
Hon Dr Michael Cullen 
: What tax deduction? You can’t use the employer’s contribution. 
Dr WAYNE MAPP 
: I say to the Minister that the Government is making a contribution for the employees as well. The truth is that that money is now accessible to people for their mortgages. It is simply ridiculous. 
I have to say that what started off as being perhaps a reasonable idea has been totally distorted. It is true that people cannot use the employer’s component but they can use their component—and there is an incentive around that as well. So the Government in furtherance of its manipulation of the main arrangements will do anything to rort what was perhaps a reasonable idea and basically completely distort the whole intent of the scheme. 
What was the purpose of the scheme? Let us go back to that. The purpose was savings. What was the purpose of those savings? It was retirement. What will we do now? We will use that money for normal consumption. That completely distorts the purpose of the scheme and that is one of the reasons why National is voting against it—not to speak of the compliance issues and all of those other matters as well. 
As my colleague Mr Key has said the scheme involves a $35 million tax deduction but it comes at the cost of a $400 million contribution by the Government in various forms. Where is the balance there one would have to ask? One of the great things about tax policy should be simplicity. It should be simple to administer it should have simple rates and it should be easy to understand. That was achieved some years ago particularly in the 1980s and early 1990s. This Government has progressively destroyed the simplicity of the tax system and that is why the scheme will not work.