Tremain Chris: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
Tremain Chris: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
[Volume:639;Page:9451] 
CHRIS TREMAIN (National—Napier) 
: 
 I rise to speak to Part 1 which deals with amendments to the Income Tax Act 2004 and particularly to speak about a couple of clauses that deal with tax credits for contributions made by people to the KiwiSaver scheme or a complying superannuation fund. That deals with the way the Government will help employees get a $20 contribution at the end of the financial year. The tax credit will apply to all contributions made up to a maximum of $20 a week or $1042.86 a year. 
On the face of it that appears to be a good scheme but the problem is that the average yearly wage is $45000 in this country. That is the average wage so I imagine the median wage would be significantly below $45000. People on $45000 cannot afford to save money going forward. That is very typical of people living in Napier where the median wage is well below the average of $45000. Many people in my electorate are unable to save and will find they cannot afford to take 4 percent out of their wage to contribute to the scheme. 
Let us look at what that 4 percent means. It is 4 percent of the gross wage not the net wage. It is 4 percent of the gross wage but is deducted from the net wage so it would be quite a significant chunk of their take-home pay. It is more like 5 to 6 percent. For people on $25000 or $30000 per annum who are bringing up a family and trying to get ahead that is hard yards. No one in the Chamber sits on a low level of income so we have to take into consideration the people on those incomes. The reality is that for the money we are talking about here—$26000 a year—that is a $20 a week contribution. 
Out of a take-home pay of say $360 or $380 $20 is a significant amount. Rent might be $180 or $200 then there are power and electricity bills. Out of say $100 left over for food $20 is significant. In fact I would challenge anybody in this House to be able to save in that environment. 
If it becomes impossible for those people to save then the question is what we do as a country to lift the game for them. That is where the National Party comes in with a totally different tack from where the Labour Government is taking our country. It is a totally different tack. We take the tack that we need to put the handbrake on Government spending. 
We saw the Minister of Finance Michael Cullen stand up and tell us how he was going to spend $54 billion on this nation’s income. He stood up and told us how he was going to spend some 32 or 33 percent of the GDP of this country. There has been a $20 billion increase since the year 2000. He has the cheek to stand up here and tell low-income New Zealanders who are on $26000 to $30000 a year that they will now have to save money by putting aside $20 a week while this Government continues to crank up its spending. It has cranked up its spending by an additional $3.8 billion in this last Budget. The Government is saying that it is OK for the Government to spend big time but it wants average Kiwis to save. 
National members say that that spending increase has to stop. It can continue to rise by the consumer price index level—so we are not talking about massive cuts—but we cannot keep adding to the fire of Government spending with continued increases. On top of that National members say that we should take the Australian approach with consistent and ongoing cuts to personal taxes. There should be consistent gradual increases to cuts in personal taxes so that Kiwis have the opportunity to invest their own money in the choices they want to make as people living in this country—whether it is repaying their mortgage investing in business or investing in their family’s education and trying to get them up the income ladder. Because as I said earlier if people are at the bottom of the ladder then it is impossible for them to save $20 a week.