Dunne Peter: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
Dunne Peter: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
[Volume:639;Page:9479] 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill be now read a third time 
. This bill has two key provisions. The first is to bring in the mechanisms for lowering the current company tax rate to 30 percent from the beginning of a company’s 2008-09 income year and the second is the introduction of a tax credit for people saving for their retirement through KiwiSaver or a complying superannuation fund. 
I have to report to the House that the debate during the Committee stage was wide ranging but hardly edifying. The most significant point to emerge from the debate was that National went on record voting against a cut in the corporate tax rate. Many of us were surprised because we had always seen the National Party as the friend of business. 
We were very surprised at National’s actions today but we are even more surprised when we consider some of the history. Some of us who have been around for a while recall that the last time the business tax rate was cut in 1988 National also opposed that. I remember comments made by Mr Groser earlier in the debate on this bill that National could not possibly support this bill because it was the Opposition. So I will give National members some credit for their 1988 position—they were the Opposition and presumably were applying the Groser philosophy. 
Let us think back over the years about the National Party and company tax. As far as we can tell National may have made a downward adjustment of tax in about 1966 but subsequent to that of course the biggest intervention it made in the area of company tax in the late 1960s was the introduction of a payroll tax. Members will remember the debate that went on about Sir Robert Muldoon’s payroll tax. That tax was repealed in I think the early 1970s. 
Then there was the period of the third National Government when no business tax adjustments were made and every other tax went up through the roof. We had a personal tax rate of 66 percent by the time that National left office. Here we are today cutting the company tax rate back to 30c in the dollar and the Opposition is voting against it. So when we look at history I suppose we should not be surprised at National’s stand today even if it did take a few of us on to the back foot when National members stated it. 
The debate was fascinating as far as KiwiSaver was concerned. Everyone who participated in it from right around the Chamber—and I acknowledge particularly the contributions from my friend and colleague Mr Woolerton and from the members on the Government side—is in favour of people making provision for their retirement. Everyone thinks the idea of having long-term saving is a good one. Everyone thinks it is something we ought to encourage for growth. I do not know exactly how many times the Australian experience was quoted in the debate but it was quoted frequently. 
Yet when the crunch comes and we are introducing a system that not only provides for a dedicated long-term saving fund but also gives real incentives to employees if they choose to become involved—with matching contributions from an employer and a matching tax credit for the employee in the first 4 years—the Opposition votes against it. I find it a little difficult to understand how one can be for saving for thinking of the future and for all of these things but against the measures contained in this bill. 
This bill is a critical part of the Budget package. The KiwiSaver changes will take effect from 1 July of this year. I can assure those members who raised some concerns about this process being rushed that we are well on track to make it effective and operational from 1 July and I am sure that the uptake will be very high. 
There was a very interesting tenor to the debate in the Committee stage too where some National members said that only 50 percent of people will take this up. As Mr Woolerton pointed out the argument was then turned around to say that we cannot use compulsion because compulsion is a form of totalitarianism but that it was still wrong that only 50 percent of people will take this up. [ 
Interruption 
] I think Mr Duynhoven is right; National members seem to want a compulsory voluntary scheme. This is called having it both ways—playing off both sides against the middle and getting nowhere. 
With those few observations about what was as I say an illuminating but not particularly edifying Committee stage I am very happy to move the third reading of this bill.