Tremain Chris: KiwiSaver Bill — In Committee 
Tremain Chris: KiwiSaver Bill — In Committee 
[Volume:633;Page:4908] 
CHRIS TREMAIN (National—Napier) 
: 
 I rise to speak to the KiwiSaver Bill 2006. First and foremost I wish to compliment the Finance and Expenditure Committee which I worked with on this bill. There was good continuity in that committee. In fact the continuity of the committee could probably be held above the continuity of the bill with the exception I guess of Rodney Hide who was not a regular in the committee— 
Brian Connell 
: Irregular. 
CHRIS TREMAIN 
: He was an irregular visitor. It was interesting to hear the Minister Lianne Dalziel’s recent comments about Cossack dancing; dancing had something to do with Mr Hide’s absence from the committee. 
The only thing in this bill that has remained the same is the title: KiwiSaver Act 2006. In fact if I lifted up the entire bill and glanced through it I do not think I would see a page without a change to it. It is changed throughout. The only other thing that has stayed the same from the start is the purpose of the scheme which is to encourage a long-term savings habit. 
Let us look at the initial purpose of the bill and at the submissions that came to the Finance and Expenditure Committee regarding it. If we look at the officials’ report on the purpose of the KiwiSaver scheme we can see that the submissions were two to one either supportive with reservations or moderately supportive with considerable reservations. 
I start with the broadly supportive—largely the financial institutes that will benefit from this bill. First the Financial Services Institute of Australasia is supportive of the intent of the bill or considers it sets a laudable objective. Secondly supportive of the need for a culture change and the development of a long-term savings habit is Fidelity Life which contributed comments in that regard. Thirdly supportive of KiwiSaver as the means to improve savings rates is Westpac. 
In terms of submitters who were supportive with reservations we start to see right from the word “go” the reason why significant changes were made to this bill which I have pointed out before. We start with the Public Service Association (PSA) which said that it considers that “given the right environment even lower-income New Zealanders may save but that savings does not just cover financial assets but also includes housing.” However even with KiwiSaver the PSA pointed out people will still under-save. That is a key point. 
The second point is that there are potentially broader macroeconomic benefits associated with increased domestic savings. That was pointed out by the Council of Trade Unions interestingly enough. The Council of Trade Unions also said: “KiwiSaver is not bold enough to prompt a long-term change in savings behaviour.” I think that was one of the key reasons why Dr Cullen made so many changes to the bill from that point in time. Even the Council of Trade Unions believed that the bill was not bold enough to prompt a long-term change in savings behaviour. 
Thirdly were the submitters who submitted that they had moderate to considerable reservations. At the start of the bill a significant number did. If we look at the officials report we see that 11 bullet points outline submitters with considerable reservations. Let us look at a few of those. The first one from the Auckland University’s Business School retirement policy and research centre stated that the purpose of the scheme was unclear and would not change long-run economic performance. 
Let us move to other submitters like Kelvin Prisk Consulting ING Mutual Fund Ltd and Superannuation Investments Ltd who said that the “home loan assistance provisions are inconsistent with the objectives of the bill”—again inconsistent with the purpose. In addition from the retirement policy and research centre we have comments along the lines of “Confusing saving for retirement with saving for a house through the subsidised first home purchase may aggregate the problem of low individual savings.” It goes on. From Mercer Human Resource Consulting we have: “The scheme objectives will not be achieved but considerable expense involved.” 
We go on. The Association of Superannuation Funds of New Zealand questions whether New Zealand actually has a savings problem with particular reference to Scobie et al. who really focused on their belief that New Zealand did not have a long-term savings problem. Also the Business Roundtable submission stated: “Long-run living standards were determined by economic growth and the ability of people to continue to save.”