Burns Brendon: Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill — In Committee Third Reading 
Burns Brendon: Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill — In Committee Third Reading 
[Volume:666;Page:13504] 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I am very pleased to speak in the third reading of the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill. One of the key elements of this bill—perhaps the major component—relates to the way the bill opens up for New Zealanders who have saved in Australia under that country’s excellent superannuation regime to be able to come back to New Zealand with their nest egg use it to bring capital back into this country and ensure they have a long and secure retirement on the basis of the Australian superannuation scheme. 
I note the way that scheme has come together to provide the capacity for New Zealanders to now come back home with a very nice golden nest egg. That relates to the fact that the Australian Government over 20 years ago decided to put in place a compulsory superannuation scheme. It is funded by a 9 percent employer contribution. Brian Gaynor in the  
New Zealand Herald  
recently commented on the benefits to Australia of that scheme. He said that over the last 10 years “Australia’s total superannuation assets have risen nearly threefold from A$484 billion to A$1257 billion”. That means that New Zealanders who are returning home and bringing their superannuation—as this trans-Tasman portability legislation provides for—will be able to return with an average of around A$56000. The average Australian has been able to generate A$56000 in savings through the scheme that their Government in its wisdom has put in place. 
The good thing about superannuation in Australia is that it has transcended party politics. The scheme was put in place by the Hawke-Keating Government was accepted by the John Howard Government and of course has endured to whichever Government will take shape in Australia over the next few days and weeks. That is a very important thing. Superannuation has to be durable. The tragedy in this country is that the Labour Government has three times worked to try to provide a platform for enduring savings and three times a National Government has knocked it around. The first time was famously with the Kirk-Rowling scheme in 1975 which was abolished by the Muldoon Government and replaced by a “pay as you go” pension scheme funded by the taxpayer. Brian Gaynor in his article in the  
New Zealand Herald  
comments that “This was the worst economic decision by any New Zealand government in the past 50 years”. That is the legacy of a National Government. That is why many New Zealanders went to Australia: because they lost their capacity to save properly in a scheme encouraged fostered and supported by a sensible Government policy arrangement. 
So now New Zealanders under this bill are able to bring their savings back securely and safely to the order of an average savings regime of $56000. But do members know what the savings regime for New Zealanders means? The average savings of New Zealanders are just 10 percent of the average savings of Australian workers. Yes there is a wage gap and we know that it is growing under this Government but none the less we have a factor of 10 in the difference between the average superannuation savings of New Zealanders and Australians or New Zealanders resident in Australia who are now under the sensible provisions of this bill able to bring back their superannuation nest egg to New Zealand to allow them to have a long and secure retirement based on that sensible savings regime. Our savings are about 10 percent of the amount of their savings. 
One of the other things about this bill is its connections to KiwiSaver. Those New Zealanders who have been resident in Australia are able to bring back their money and park it in KiwiSaver which is an excellent scheme introduced under the last Labour Government. I go back to my original comments about the need for durability—the need to not play party politics with superannuation. One of the great tragedies—and I think in future commentators like Brian Gaynor may note this—is that under this Government in the first flush of tax cuts most of the money went to the top third of income earners and that in fact the top 3 percent of earners got about a third of the money from the first round of National Government tax cuts. 
How did National fund those tax cuts? It funded them by cutting the KiwiSaver contribution from a 4 percent employer contribution back to a 2 percent employer contribution. But where are we now? In the last few days the Prime Minister has announced that we need to start looking at a compulsory savings option. So where were we less than 2 years ago? We were cutting a KiwiSaver regime that was giving a million New Zealanders the capacity to start building towards the sort of savings regime that under this bill New Zealanders can bring back to this country—those Australian-sourced nest eggs. We were en route to creating our own savings regime which would have allowed New Zealanders to build their own security in retirement but what did the National Government do? It cut that savings regime in half in a venal way simply to guarantee itself some capacity to win the last election. We know that the funding was cut and that 30 percent of it went to the top 3 percent of tax earners. It was payback time for the National Party’s wealthy mates at the cost of working New Zealanders and their efforts to secure for themselves some form of security in retirement which the KiwiSaver scheme was providing. It was cut in half in a cynical exploitative way by the National Party in Opposition when it was seeking the Treasury benches. 
Here we are less than 2 years later scrambling around trying to forge a new consensus on superannuation and savings. But even as that starts to take effect even before the task force has been formed we had the Minister of Finance say today on  
Morning Report 
: “Oh no we are not going to have any net increase in Government contribution to this new platform for security and superannuation and saving for New Zealanders. That’s off the agenda.” So we have had first cuts to KiwiSaver and second an admission that we need to start saving for ourselves so that we are not wholly dependent on New Zealanders going to Australia to lift our savings regime. Under this bill those New Zealanders are able to bring their savings back so that they can retire comfortably and securely in New Zealand. We now have a Government that is precluding some of the sensible options that at the very least need to be considered if we are to have any prospect whatsoever of an enduring superannuation and savings regime for this country. This Government stands indicted on those points. 
It was interesting to note the comments in a recent  
Trans Tasman 
 about why that has happened. Why has the Prime Minister indicated that we will now have a task force to look at compulsory superannuation? Here is what  
Trans Tasman 
 had to say: “John Key sniffs a shift in opinion since 92 percent of voters rejected compulsory superannuation at a referendum in 1997 and a growing public awareness of the implications of living longer. But his case for compulsory saving is not yet compelling enough for hard decisions. The Government will wait until it considers recommendations from a panel of experts who will examine all the issues around retirement savings.” 
Well yes  
Trans Tasman 
 is right. The Prime Minister has sniffed a change in a public opinion. It is a change in public opinion that reflects the fact that a million New Zealanders have voted with their feet for KiwiSaver. They have opted into the scheme and acknowledged the value of having a scheme that allows an employee contribution yes; an employer contribution yes; and a Government contribution yes. It is a three-legged stool that gives a superannuation scheme some prospect of endurance of stability of being able to be drawn on into the future. But why would the Minister of Finance within days of the Prime Minister indicating that he wants to see a regime on compulsory superannuation given a look over by a task force effectively undermine that and say: “Well you can have that review all right but don’t think there will be any prospect of Government contribution to superannuation and savings. Don’t even think about that.”? Why would that be? Why would he want to pull one of the three legs away from the only way in which we can build an enduring sustainable superannuation scheme that can give New Zealanders the sorts of savings in retirement that this bill provides for? This bill provides for New Zealanders who have opted to spend a portion of their working lives in Australia and who have built up nest eggs 10 times what this nation is able to generate by way of savings. We have a Government with a track record in history that dates back more than 30 years which is that it will play politics on savings.