Tabuteau Fletcher: KiwiSaver Budget Measures Bill — First Reading Second Reading In Committee Third ReadingText is incorporated into the Bound VolumeTabuteau Fletcher: KiwiSaver Budget Measures Bill — First Reading Second Reading In Committee Third Reading[Sitting date: 21 May 2015. Volume:705;Page:3802. Text is incorporated into the Bound Volume.]FLETCHER TABUTEAU (NZ First):If I could continue along the same vein as the previous speaker James Shaw and bring some facts and some intelligent discussion rather than abuse into this morning’s proceedings. Let us take an example used yesterday. Take a 15-year-old who is about to open a KiwiSaver account today. If they had done it before this $1000 incentive was removed that $1000 would actually be—and these are not generous calculations they are quite modest—at the time of that person’s retirement given a 10 percent return which is actually reasonable considering the annual rates of return of KiwiSaver funds at the current moment over 50 years the calculation is about $117000 to $145000 at retirement.Clayton Mitchell: How much?FLETCHER TABUTEAU: It is $117000 to $145000 at retirement.I said yesterday that we might be balancing the books at the moment. It might look like you are balancing the books now but what you are doing is robbing those sums of money from future generations. That range like I said is modest and the multiplier effect on your annual returns the compounding interest effect is such a powerful thing. It has been spoken about in this House many times.Consider the reality out in the typical Kiwi household. The median income for a Kiwi is still less than $30000 per annum. That $1000 was not only a drawcard it was a real and meaningful sum of money. At the end of its investment life it was—it really was—going to make a huge difference in the enjoyment of life for those retiring. The Government has taken away $145000 in real terms from our future generations for those who would like to retire with some dignity from every person who missed out under this retrospective piece of legislation. This Government’s vision stretches only to the end of today. Mr English is literally robbing our children’s piggy banks.This surprise bill opens up questions about uptake the impact on our national and individual savings and as mentioned already the fairness or lack thereof across generations. The advice given to the Government on this bill was “The analysis has not focussed on the effect of policy options on national saving”. I will just repeat that: “The analysis has not focussed on the effect of policy options on national saving”. Here we are talking about $1000 contributing to national savings but the advice given to the Government the analysis of the policy itself does not take into account national savings. It beggars belief. In the first part the officials have admitted that the bill ignores the problems of savings and then they say “the analysis is concerned with addressing the poor”—supposedly I would put—“value for money and target effectiveness (leakage) of KiwiSaver subsidies.” Apparently we are told that the value for money and target effectiveness of KiwiSaver subsidies just is not there any more. The $1000 is not much of an incentive any more. I will come back to that.Earlier I highlighted that although $1000 may seem like a small sum we are talking about people on the median income in New Zealand of less than $30000. It is actually around $28000. I know the National caucus will not understand what that means but $28000 and trying to save $1000 from that—try to do that in a year. No I do not think you could. I have been there; you cannot do it. Try to do that over 10 years and actually you will not get a chance to grow your savings pool on the New Zealand median income and the Government has now taken away that little incentive that difference we spoke about last night and today—motivation for savings. Now the Government is taking it away. What the Government has not discussed is the future value of $1000 at retirement age. I will say it again: $145000.Consider those living in the regions of New Zealand—the productive heart of this country—who are currently not able to share in the wealth they create. Just think how hugely they will be affected by the removal of this incentive. Look at the unemployment rate in provincial New Zealand remembering actually that an hour of work per week is measured or ticked in the employment column. An hour of work a week is considered as being employed. It is 9.9 percent in Northland 7.8 percent in my home region of the Bay of Plenty and it goes on. On top of this the Government must acknowledge that regional incomes are well below the national average. What is the Government doing to our regions? It really is such a small amount of money now compared with the value that it presents in the future.I said yesterday that the supposed savings on the Government’s books today for every individual Kiwi still not signed up will be approximately $120 million a year for the first 4 years. As the fund reaches critical mass in terms of people subscribed contributions will decline. So these miniscule savings are short term and short-lived. They are not actually saving this country anything at all.The Minister has removed the incentive to save. Actually do not think about the regions now; think about this in the context of Auckland. People are not going to save. That $1000 was a real and meaningful incentive. People in Auckland are living day by day. The costs of living in our biggest city are just gigantic and the Government has taken away the opportunity or incentive of Aucklanders to get into a savings scheme where they might have been able to subsidise their superannuation. It has taken it away.We have been speaking to Grey Power members and they noted: “The axing of the $1000 start-up boost for KiwiSaver contributors means that many New Zealanders will be much poorer when they retire as it removes a vital incentive for workers to join up and means more people will be dependent solely on their superannuation on retirement.” They go on further to say: “Many New Zealanders currently aged 45 to 65 do not own homes and those who do are actually still paying mortgages. They are on low incomes and are not enrolled in KiwiSaver. They are already facing increasing rental costs in a tight housing market made worse by the removal of many State houses across the country.”Even though many Grey Power members have missed out totally on the KiwiSaver programme they know that this Government is robbing from their children and their grandchildren. This bill does nothing for the children of this country in a time of Generation Rent skyrocketing house prices high student fees and the loans that go with that. This bill is not fair or reasoned. I can expect soon that everyone will be automatically enrolled with the rest of New Zealand made to compulsorily join the scheme. I suppose this bill makes compulsion cheaper. The cynicism is hard to take to be fair. Thank you.