Dalziel Lianne: KiwiSaver Bill — Third Reading 
Dalziel Lianne: KiwiSaver Bill — Third Reading 
[Volume:633;Page:5011] 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 It is certainly very gratifying to speak in the third reading of the KiwiSaver Bill and to see it finally passed through the House. I am very disappointed that the National Party has decided not to support this legislation because it represents such an important step towards helping to create an environment where all New Zealanders can save for their future well-being. 
I was particularly disappointed to note that the Opposition spokesperson on finance spent most of his speaking time talking about the Minister of Finance. I think there is an element of jealously there. Twenty-three times he mentioned the Minister’s name in the course of his speech. I do not think he managed to mention the word “KiwiSaver” as many times but I am sure I will make up for it by saying to this House and to anyone else who is listening that I believe this is a special day in our nation’s history because it represents such an important change from the way in which things have happened in the past. 
We will make the change by facilitating workplace-based savings with deductions from salary and wages at source. Making deductions at source is the simplest and most effective way for people to overcome their inertia and to start to develop a savings habit. I am surprised that members opposite want to deny people that opportunity when we know that workplace-based savings schemes have been stagnating for some time. I think others have made that comment in the House this afternoon. 
New Zealand is a very different place from what it was just a few years ago and today the average worker will have many different jobs with many different employers during the course of his or her career rather than stay with the same employer for more than 40 years as used to be the case. I think some of our parents probably experienced long-term employment with one employer over their lifetime and left with a gold watch. It does not happen so much today. Many work-based superannuation schemes are dated from those old days and they have not changed with the times or with the workforce. KiwiSaver is an important step in reigniting the savings habit and enabling New Zealanders to start to build some security for their futures. The way the initiative is structured should make it easier for workers and others interested in saving for their retirement to make a start. 
Because the bill facilitates savings in private KiwiSaver superannuation schemes it both supports and builds on the current base of superannuation products we have in New Zealand. That also means that existing superannuation schemes will be able to adapt to participate in the KiwiSaver environment thus minimising the potential for scheme wind-up and the release of superannuation funds out of savings. 
The work-based focus of KiwiSaver means it is inevitable that employers will have some obligations under the legislation. Those obligations have the potential to impose costs on employers. However the legislation has been designed to minimise those costs through directing information and funds through the Inland Revenue Department. This is an important issue for me both as Minister of Commerce and as Minister for Small Business. I am pleased we have been able to be responsive to the concerns of stakeholders and employers including those of small business by making some significant changes to the scheme. 
The original proposed start date for KiwiSaver of 1 April 2007 was raised as a matter of concern by many submitters. Once again the Government demonstrated its responsiveness and extended the start date to 1 July 2007. The new implementation date gives employers and potential KiwiSaver scheme providers more time to prepare and will help to ensure that the implementation of KiwiSaver goes as smoothly as possible for all involved. 
Amendments to the automatic enrolment process mean that new employees will have the deduction of KiwiSaver contributions start from their first pay. That will make it less likely that new employees will miss the money they will be saving for their retirement. I was very keen on that provision; I wanted people to see what their pay packet would look like straight away. If new employees do decide to opt out because they cannot afford to stay in the scheme then any KiwiSaver deductions will be refunded as expediently as possible. 
The period during which new employees can decide to opt out has also changed. It now begins at the end of week 2 after a new employee starts his or her job and runs until the end of week 8. That change allows employers to report to the Inland Revenue Department just once a month and therefore reduces compliance costs. Because the department will not be advised of new employees until later that longer opt-out period is needed. The new opt-out period also gives employees more time to consider whether to remain in KiwiSaver and to seek advice from a financial adviser if that is desired. All of those provisions are important; we have made it very clear that it is not the responsibility of employers to provide financial advice. 
In conclusion I say that I am delighted to be part of a Government that has worked hard since 1999 to put financial security in retirement within the reach of every New Zealander. KiwiSaver is an outstanding and momentous initiative that will help to foster a savings culture in New Zealand and will enhance the financial security of its members in retirement. Through the relatively simple mechanism of automatic enrolment organised in the workplace KiwiSaver allows for deductions at source provides benefits of economies of scale and reaches a high proportion of the population who are able to save. That aspect of KiwiSaver has already earned it international accolades and we are confident that KiwiSaver will earn the accolades of employers employees and the savings and investment sector throughout New Zealand. 
Others have spoken of the 1975 National Government that destroyed New Zealand’s first workplace-based superannuation scheme by using totally misleading advertising. I recall as a 15-year-old seeing the Cossacks dancing across the screen and seeing the other cartoons National used as well to drive racial wedges through our society. Superannuation has been a political football ever since. Over the past 6 years this Labour-led Government has restored confidence in New Zealand superannuation by reversing the cuts imposed by a National Government to pay for the tax cuts in the 1990s and by establishing the New Zealand Superannuation Fund to smooth payments into the future thereby guaranteeing the universality of New Zealand superannuation—and now KiwiSaver. I am a proud New Zealander today as the KiwiSaver Bill becomes law.