Nash Stuart: Taxation (Budget Measures) Bill — In Committee 
Text is incorporated into the Bound Volume 
Nash Stuart: Taxation (Budget Measures) Bill — In Committee 
[Sitting date: 20 May 2010. Volume:663;Page:11119. Text is incorporated into the Bound Volume.] 
STUART NASH (Labour) 
: 
 We heard some interesting speeches in the Chamber last night. One of the most interesting speeches was the one from Simon Bridges who stood up and said this Budget was not about the wealthy lawyers—and obviously he is one—but about the street sweepers and the cleaners. Mr Bridges said this Budget allowed the street sweepers to actually get ahead and advance themselves. He thought that an extra $5 a week would allow that to occur. Well I would argue of course that the street sweepers had a chance to get ahead because they had adult and community education. But I can tell members that in Hawke’s Bay there are no more courses going on at the moment. Of course cutting the education budget in real terms cutting community education even further and cutting tertiary education means that this Budget is not about getting ahead at all; this Budget is about going backwards. But I digress. 
I will talk about the GST increases. I will give members a real-world example that Mr Quinn could well learn something from; I think that his mother who lives in Napier will be very interested in this. We are talking about the elderly sector. In Napier about 10000 people rely on superannuation and that number will increase by another 12000 in 15 years’ time. That does not mean we will get 10000 plus another 12000 because obviously some will fall out of that group. But I am saying a significant number of New Zealanders— 
Paul Quinn 
: They’ll be well looked after and they’ll do better than most. 
STUART NASH 
: —and again I think Mr Quinn would agree with this and he must be nearly there because I think he is going a little senile—rely on national superannuation to get through. 
These New Zealanders have worked hard for their whole lives. They have worked they have strived and by and large they have paid their taxes no matter what the amount was. We heard that they used to pay 66 percent tax then they paid 33 percent and then it went to 38 percent. They have paid tax all their lives and they do not ask for much. We must admit that our elderly do not actually ask for much but they know when they are being had. 
Lynne Pillay 
: Just dignity. 
STUART NASH 
: That is right Lynne; they just ask for dignity—they want to retire with dignity. When people have worked all their lives and reach 65 they want to be able to enjoy life. It does not cost much. These people do not receive much income from their superannuation but they do not complain. They want to go out with their mates and enjoy their bowls. 
Of course when adult and community education was cut the elderly were concerned because that actually took away a lot of the support networks and friendships and clubs that they belonged to. But that was OK—they grumbled but they lived with that. With this increase in GST though they are really concerned because the increase in GST erodes their spending power. What is worse than that is that we have inflation coming in in 2011 of 5.9 percent. That is not a Labour figure. Someone said to me last night that that is just scaremongering. Well I can tell members that that figure of 5.9 percent is not a Labour figure; it is a Government figure. If members look at page 3 of the Minister’s Executive Summary which is in volume B.2 and B.3 of the Budget documents they will see that it refers to the figure of 5.9 percent inflation. 
A lot of the elderly in our community rely on interest earned from their savings and investments to top up their national superannuation in order to live a life of dignity and have a decent standard of living. That inflation rate will erode the real spending power and the real value of these investments. We all know examples of this. We all know people who live in big homes and who say that they bought them in 1950 for only £20000 and we think: “Goodness me that was cheap.” But of course those people would have earned only £2000 a year then. That is what inflation does: it erodes real value; it erodes the value of investments. An elderly person on superannuation who put away $100000 and is living off the interest—and the resident withholding tax will have already gone up on that—will find that high inflation erodes those savings. I did a radio interview this morning and I mentioned this. The guy said: “Yeah but inflation is coming down after that. It’s a one-off hit.” It is a one-off hit; we admit that. But that does not mean that prices will drop; it just means that prices will increase by 5.9 percent then increase by 2.4 percent again. It does not mean that prices will drop again. So the reduced value of investments created by the one-off hit of the GST increase will hit superannuitants a lot harder than I think the vast majority of people think. That is why I have a major concern about this increase.