Hipkins Chris: KiwiSaver Budget Measures Bill — First Reading Second Reading In Committee Third ReadingText is incorporated into the Bound VolumeHipkins Chris: KiwiSaver Budget Measures Bill — First Reading Second Reading In Committee Third Reading[Sitting date: 21 May 2015. Volume:705;Page:3816. Text is incorporated into the Bound Volume.]CHRIS HIPKINS (Labour—Rimutaka):This is where the Budget spin starts to become unravelled because although the National Government in its Budget on Thursday proclaimed that it was going to do something for New Zealanders who were feeling left behind for New Zealanders who were struggling to get ahead the reality is when you break it down when you get through the spin this Budget actually penalises those people some more.So let us look at some real examples of real people who might be affected by the changes in this year’s Budget and let us take someone who is on an unemployment benefit for the average amount of time. Bear in mind that despite all of the rhetoric people are typically on the unemployment benefit for less than 6 months at a time. You might not know that when you hear the rhetoric about the unemployment benefit but the average person who has one is on it for less than 6 months.So let us assume that they are on the unemployment benefit for 6 months and they have children. They would benefit by about $650 from the changes that the Government has proposed to increase their benefit. Let us say that they then get a job and this is the first time in their life that they have a job with sufficient income to sign up for KiwiSaver they lose a thousand bucks. That is the reality. So the National Government gives them $650 with one hand and takes $1000 off them with the other. That is the reality. Break down the spin go through it and then you work out that actually they are not going to be better off; they are going to be worse off under the Government because it is giving a small amount with one hand and taking a larger amount with the other. That is the reality and there are everyday New Zealanders who will be in that position.When members on the other side of the House talk about beneficiaries they only ever talk about the people who are on a benefit for a long time and they neglect to tell the public every time that the vast bulk of New Zealanders who rely on some form of benefit do so for a short period of time. It is a stop-gap measure for them when they find themselves in hardship and this Government neglects to tell the public about that. It is happy to stereotype people living on benefits when actually the vast bulk of people who are on a benefit are on a benefit for a short period of time. They will be penalised by this because they will lose the opportunity to get the $1000 KiwiSaver kick-start and I think that is wrong.I think it is wrong that somebody who signed up their child to KiwiSaver on Wednesday gets $1000 and somebody signing them up on Friday does not. That is simply unfair. It is unfair that the Government did not signal this. It was never promised in its manifesto. So New Zealanders had the comfort of knowing that at some point in the future if they found themselves in a position to join up to KiwiSaver that kick-start would be there. Had they known had the Government had the decency to give them warning they could have signed up and got the $1000 kick-start. The Government knows that because if it did not we would not be here under urgency backdating this legislation to Budget day and robbing all of the New Zealanders who are not in KiwiSaver of the opportunity to sign up and get the $1000 kick-start.Let us just be clear here. The people who are in KiwiSaver now are more than likely to be in middle and upper income brackets. It is the people in the lowest income categories who struggle to get into KiwiSaver and yet that is something that I know they aspire to. Aspiration used to be something that the National Party was proud of. Now if someone is on a low income and aspires to be in KiwiSaver they are kicking them in the guts by taking away the $1000 kick-start that middle and upper income earners benefited from.This is another kick in the guts to people on low incomes and to future generations of New Zealanders. To the tertiary graduates who will be leaving university or polytech or their apprenticeships and moving into full-time fully paid employment for the first time signing up to KiwiSaver—they have lost the $1000. And of course we know that tertiary students continue to be hammered by this Government as well. It is simply unfair.The National Party hated KiwiSaver from the beginning. It was a package of measures that John Key called communism by stealth. Let us not forget that. When Working for Families and KiwiSaver were introduced by the last Labour Government a Government that I should remind people produced nine surpluses in a row to National’s seven deficits—when we used those surpluses in the good economic times to introduce KiwiSaver to save for the future to boost family incomes through Working for Families to reduce the burden on students by having interest-free student loans John Key railed against those policies and called them communism by stealth.National hates KiwiSaver and that was absolutely evident from the very first moment it became Government. What did it do? When National first became Government it cut the member contributions. That was cut No. 1. It then cut the member fee subsidy of $40 per annum. That was cut straight away. It cut employer contributions. This all happened straight away. National halved the size of KiwiSaver straight away in its first Budget and it ceased to provide the employer tax credit. Those four cuts were all made in its first Budget. Those were the first of the KiwiSaver cuts made by the National Government.But then the Government came back in 2011 and it had another go. It halved the member tax credit in that year as well. This was yet another cut. And then it made further cuts to KiwiSaver and now this is the latest one. Eight cuts all up this Government has made to the KiwiSaver scheme since it came into office.This is a Government that hates KiwiSaver. Yet Bill English knows in his heart of hearts and they all know in their heart of hearts that New Zealand still has a savings problem. Anybody looking at the wider set of New Zealand’s accounts knows that we are spending more than we are earning and that that has been the case for a very long period of time. KiwiSaver was one of the measures introduced to try to curb that to try to get New Zealanders saving more. It was a good measure and it still is a good measure and I am pleased it is still there. But we should be looking at getting more people into KiwiSaver and putting more money into KiwiSaver because it is a key part of making sure that New Zealanders break even and make ends meet.We heard a lecture from Nick Smith about the Opposition not being able to get their numbers to add up. This Government has not managed to get its numbers to add up for 7 years because if they did add up we would not be in deficit. For 7 years its numbers have not added up. The Government has been in deficit every year. What does that mean? It means borrowing. National has been borrowing every year that it has been in Government. It has been contributing to the problem of New Zealand as a country spending more than it earns. We have to deal with that and Bill English knows in his heart of hearts that that is a challenge for New Zealand. So why is it that time after time he comes to the House and proposes cuts to one of the few things that we are doing that is designed to turn that round and to increase our savings rate?Then of course we have got the Government saying: “Well actually you can cash up your KiwiSaver for your first-home deposit.” That was something that the Labour Party has supported as well. But is it not sad that we have reached that reality now where New Zealanders even if it they cash it up cannot afford to buy a first home? Those in the middle-income brackets who can are having to face a trade-off between saving for their retirement and buying their first home. I think that is a tragedy. I think it is a short-term stop-gap measure. It is good—it is a good way to get people on to the property-buying ladder but long term we have got to look at other things. We have got to look at ways that people can own a home and save for their future. Furthering KiwiSaver by making sure that there are good incentives to join by making sure that we are increasing contributions to KiwiSaver—whether it be through Government contributions employer contributions employee contributions and the like—will all make New Zealand a richer country in the long term. Instead what we are seeing with the current Government is that it is content to manage things for today and not plan ahead for the future.So many of the things in this year’s Budget are designed to create the illusion of doing something but they do not. When you break down the spin when you look at it they are not actually helping the people they claim to be helping. I want to just reiterate that point that I made that for somebody who is moving off a benefit and into work if they have been on a benefit for 6 months—which is about the average time that someone is on an unemployment benefit—they would have benefited by $650 through the increase in benefits and that is great. I think that they would enjoy that and I think that they would find that as a welcome relief. But when they finally get into work and they finally get to join KiwiSaver for the first time they find that not only is that $650 taken away from them but another $350 is taken away as well because they lose the $1000 KiwiSaver kick-start that they otherwise would have got. That is the reality. So let us break down the spin. Give a small amount with one hand take a larger amount with the other hand—that is the reality of what the current Government is doing.KiwiSaver is a good scheme. The kick-start has resulted in a whole heap of people joining KiwiSaver. Removing the kick-start penalises people who for whatever reason—Joanne Hayes: I raise a point of order Mr Chairperson. The member is not even addressing the clause—the title.The CHAIRPERSON (Hon Chester Borrows): The debate on this clause is wide ranging. It will continue to be wide ranging for some time yet. When we get into the other clauses they are much narrower and so that will be enforced most closely.Hon Michael Woodhouse: As I understand it there was no leave sought for these clauses to be taken as one question and traditionally in the Committee stage of the House the title part of the bill is at the end of the Committee stage not at the start which does of itself form something of a wind-up. But in this situation we are debating clause by clause—CHRIS HIPKINS: 114/7—read it.Hon Michael Woodhouse: —and my understanding is that that requires the member to stick to that clause.The CHAIRPERSON (Hon Chester Borrows): I do not need any further help with this. In spite of the unlawful interjection I do draw the member’s attention to Speaker’s ruling 114/7. Because there was no select committee process on this bill the convention is that this is a wide-ranging debate. It will continue to be no doubt for both sides of the Chamber who may want to seek the call. Chris Hipkins has 20 seconds.CHRIS HIPKINS: Thank you and I intend to use every one of them. I will be very brief. KiwiSaver is a good scheme. The kick-start was a good way to get people in it. We should not be penalising people who are not in it now but who aspire to join it. We should be encouraging them to join KiwiSaver. It is wrong that the Government is taking away this kick-start and it is wrong that it has not foreshadowed that it intended to do so.