Dalziel Lianne: Taxation (Urgent Measures and Annual Rates) Bill — In Committee Third Reading 
Dalziel Lianne: Taxation (Urgent Measures and Annual Rates) Bill — In Committee Third Reading 
[Volume:651;Page:239] 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I think the public would be surprised to know that the Minister who has just resumed his seat was the last Minister in this country to cut the pension. He reduced the floor below which superannuation could fall; he reduced it from 65 percent of the average wage to 60 percent of the average wage. I know that there is a word we are not allowed to use in this Chamber but I would use it happily to describe what that Minister just did. He talked about what would happen to people under a particular position that has never been a proposition put forward in this country and that is to do away with our national superannuation scheme. New Zealand superannuation has been designed to provide across-the-board access to support at age 65 and it is protected at its percentage of the average wage. The last time that was adjusted downwards it was done by that very Minister when he was a Minister of Finance. 
I noted the statement in the explanatory note of the bill—and some Government speakers have talked about this—that the Government is committed to keeping the KiwiSaver scheme and making it an enduring and affordable scheme for members employers and taxpayers. But I think that is an absolute nonsense. I think that the lie to that statement in the explanatory note of the bill can be found in the reality that these changes have been designed only to pay for the promised tax cuts which have been subsidised by some of New Zealand’s lowest income earners. 
Actually no one out there can understand why National has taken the knife to this scheme. It has been the best chance New Zealand has had for decades to foot it with other countries that have recognised the need to encourage a savings culture over many years. Those who have been committed to growing the depth in our capital markets for example were hugely welcoming of KiwiSaver when it was first announced. No one thought that National would take the knife to this scheme under urgency straight after the general election and ram through the changes without consulting anyone in our capital markets without consulting anyone in the industry more broadly and also particularly without the scrutiny of a select committee to consider the detail of the bill in order to take the time so that the National Party could be persuaded to soften the position that it is taking. 
I say this is an ill-conceived policy and it is not one that is supported by the business community generally. Sure some small-business employers will be happy to see the end of the 4 percent contribution. But they are not paying the 4 percent contribution at the low end of the income level because there has been a direct subsidy to employers in return for that. In actual fact the smaller employers were always going to find the 4 percent manageable under the scheme. The reality is that those who run our capital markets are absolutely devastated that this change has occurred to KiwiSaver. 
I listened to National candidates say that this measure has been designed to encourage more people to join KiwiSaver. After all with over 800000 people enrolled it is only about 150 percent more successful than Treasury originally forecast it would be. But the point has been made that nowhere has National budgeted for an increase in enrolments because the bottom line is that it is not expecting any more enrolments. 
This measure is not about encouraging low-income people to put aside 2 percent of their income and have it matched by a further 2 percent from their employers. It is not about developing a savings culture in New Zealand. It is about chipping away yet again at a Labour Government’s attempt to get New Zealanders saving. The sooner the National Government realises that savings are important to the future of our economy the better it will be. There is as Michael Cullen pointed out before extreme dishonesty in the way that National has pretended to keep the Government contribution at $1000 a year because of course it is not $1000 a year if people are contributing only 2 percent of their income to the scheme as lower-income earners. 
I too am concerned about the situation in terms of our trans-Tasman arrangement over the question of portability. Why did the National Government not think to speak to the Australian Government before announcing these changes?