Burns Brendon: Taxation (GST and Remedial Matters) Bill — First Reading 
Text is incorporated into the Bound Volume 
Burns Brendon: Taxation (GST and Remedial Matters) Bill — First Reading 
[Sitting date: 18 August 2010. Volume:665;Page:13281. Text is incorporated into the Bound Volume.] 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 The Taxation (GST and Remedial Matters) Bill makes a number of amendments to KiwiSaver and I will speak this evening about the National Government’s lamentable record on savings. It is a lamentable record that stretches back more than 35 years. It is totally regrettable that the Government is not using this bill to undo the damage done to the KiwiSaver scheme when it passed legislation in a rapid rush prior to Christmas 2008 in order to fund the first round of tax cuts for its wealthy mates. But here we are less than 2 years later with the Government beginning to realise that saving is important to this nation and its future and starting to look at how it can make amends. 
The National Government gutted KiwiSaver by taking away the requirement that over time employers contribute 4 percent to the KiwiSaver schemes of their employees. Australia as a comparison has a 9 percent employer contribution to the superannuation savings of Australians; we had a scheme that was moving to 4 percent but this Government cut that in half in order to fund tax cuts for its rich mates. What an absolute disgrace! 
Labour when in Government talked about and acted on the savings problem in New Zealand for years. We introduced KiwiSaver and the Cullen fund but National’s response was simply to go in and cut what had been the first increase in household savings in a generation. It went back to the time of the Kirk-Rowling superannuation scheme which was axed by another National Government Rob Muldoon’s Government in 1976. If that scheme had still been in place we would have a kitty of some $300 billion— 
Hon Steve Chadwick 
: How much? 
BRENDON BURNS 
: We would have $300 billion in the kitty which is the estimate I heard this week and we as a nation would be able to draw on that. We would be a wealthy and prosperous nation if National when in Government had not played politics with superannuation and savings 35 years ago. What a disgrace! And National did it again 2 years ago in the run-up to the election of 2008. National promised New Zealanders tax cuts and then quietly mentioned that it was going to cut KiwiSaver to fund them. What a backward step what a retrograde step and what a short-sighted step. Now within 2 years this Government has to acknowledge that what it did was wrong and that it was short-sighted. It is now scrambling around trying to form a committee to look at savings because it did such a reprehensible and retrograde thing such a short time ago. 
Labour understands and has always understood that the difference between the Australian and New Zealand economies is not about mining; it is about saving. But this Government has cut the scheme introduced under Labour which was to start us towards a savings regime that would give us some measure of complementarity with the Australian savings regime. It has also parked the funding that was going into the Cullen fund despite the fact that the Cullen fund is now starting to make very positive sets of returns having bounced back from the recession as most investment schemes have done to date. 
National is absolutely rudderless on this issue of savings. It is desperately now trying to set up a savings task force. I wonder whether Don Brash will be invited to head that one. When a Government has no idea what to do it gets a task force or a committee together and that is what this Government has been reduced absolutely reduced to doing. National’s history on the whole issue of savings has been a disgrace. 
I recall the Winston Peters - initiated referendum in the early 1990s—I voted in support of that—for a compulsory savings regime. It was supported by no more than a handful of New Zealanders but here we are 20 years later and we are seeing compulsory savings start to come back into focus and appropriately so in our view. But I noted from tonight’s news that Winston Peters has a new crusade. He will be standing in the seat of Helensville and he will be challenging the Prime Minister for that seat. Many New Zealanders will be looking forward to that contest and will be judging this Government on its record on issues like savings. 
National’s record on savings even in the last 2 years has been shown to be shallow and entirely focused on winning an election and not focused on the future prosperity of New Zealanders. National was entirely focused on winning the last election bribing New Zealanders and telling them that they could have their cake and eat it too. Within a few months National had to backtrack and pass legislation to partly put it back in the box and now this Government is scrambling around to find a way forward on savings. A solution was in hand with the KiwiSaver regime. The employer contribution would have been at 4 percent to put us on track towards some sort of comparison with Australia in terms of our savings record. 
Let me remind members again that there would have been $300 billion for New Zealanders in accounts today if a National Government had not cut it in a disgraceful fashion and if it had not pledged to New Zealanders at the 1975 election that they could have Government-funded taxpayer-funded superannuation at the age of 60. It was an absolute travesty. New Zealanders knew in their hearts that it was wrong and it has taken us a generation to begin to sort it out. Now the National Government is scrambling around again trying desperately to find a solution to the whole issue of savings when solutions were put in place by the previous Labour Government. It was all done for the sake of electoral appeal. National knew that tax cuts would not work most especially as an international recession of the most severe consequence since the Depression was starting to take hold and still John Key stood on a platform and said: “Yes absolutely New Zealand. I promise you these tax cuts are affordable.” They were not affordable and he knew it. He made his money in the financial markets. He knew that markets could be knocked around by an international recession yet he still went to the polls in November 2008 telling New Zealanders that they could have their cake and eat it too. He said they could have tax cuts and he funded them by cutting the very sensible KiwiSaver scheme which the previous Labour Government had implemented. Now we are seeing National scramble around desperately trying to find a way forward. 
This bill also amends the Goods and Services Tax Act. Some of the amendments are entirely sensible and appropriate but I cannot let the moment pass without noting that we will on 1 October see an increase in GST to 15 percent. We know that New Zealanders are bracing themselves for that increase. In fact it is already starting to happen. This month in my city of Christchurch the bus fares have gone up by 10 percent ahead of the GST rise that is coming in October. The bus fares have gone up by 10 percent. Yes part of that increase is due to another piece of National legislation requiring that at least half of the cost of bus fares is met by passengers but bus companies are also saying they have to start factoring in GST of 15 percent. Long before New Zealanders get any sense of relief from tax cuts—which were supposedly going to be nirvana for them but which they know that they will not be; they know that the rise in GST will knock them for six—we are already starting to see the GST increase being factored in by businesses across the country. 
I have been looking for a new electorate office in my electorate. The state of the economy is shown in the fact that I have been offered premises at half the price that those premises were being offered at 2 years ago. That is the state of the economy before the GST increase impacts on New Zealanders and their livelihoods and they have to find another 2.5 percent from already stretched incomes. Christchurch is a city where people cannot find jobs and where we have had 12000 job losses over the past year—12000 job losses. We are seeing that impact on restaurants that are empty on hotel beds that are empty and on a service sector that is feeling the pinch and that is before the GST rise of 2.5 percent takes effect from 1 October. 
This Government stands condemned. It has cut savings. It is increasing GST. It has a shameful shabby record about which members opposite should be feeling absolutely disgraced. This Government’s record on saving is appalling. It has neglected saving for 35 years it did that at the 2008 election and it is doing that again today. 
Debate interrupted.