Foss Craig: KiwiSaver Bill — In Committee 
Foss Craig: KiwiSaver Bill — In Committee 
[Volume:633;Page:4926] 
CRAIG FOSS (National—Tukituki) 
: 
 I wonder why more Labour members are not speaking to this bill apart from the Minister in the chair the Hon Lianne Dalziel. If this bill is supposed to be such a flagship if it is supposed to be such a platform and if it is supposed to take pride of place on the illustrious pledge card why on earth are we not hearing more speeches from the Labour MPs? I can see only one Labour member of the Finance and Expenditure Committee on the other side of the Chamber at the moment and I think that speaks volumes. 
I guess it is because Labour members do not actually understand the bill because it keeps changing. The bill they studied the bill they examined the bill that was taken to the Finance and Expenditure Committee in the first instance has radically and fundamentally changed. For example when I picked up Supplementary Order Paper 52 which sets out the Minister’s amendments off the table it was still hot. The ink was still smudgy—that is how fresh it is. That is how much the legislation has been changed and it is an example of the haste with which the Government is trying to push the bill through. 
I invite any member opposite to take a call to speak for the bill not just to waste time trying to get this thing passed and get it into tomorrow morning’s papers so that there are no more Taito or pledge card stories in the papers. Members opposite should have faith in their party. I guess it is a credible indictment of the confidence and faith they have in their Minister of Finance that they are not speaking on the bill into which he has put so much political capital. 
A lot of people have said that it is better to pay off a mortgage than to invest. That is not absolutely true. Sometimes it is true but if people have a mortgage at 5 percent and they can invest it at 10 percent then it is a bit of a no-brainer to me to string the mortgage out. There is an inherent conflict between saving in a financial asset sense under a superannuation scheme and a first home buyers scheme. That confusion has been compounded by the mortgage diversion scheme that has been put into place. 
Why on earth would people try to build up financial assets when inflation is out of control? Inflation is through the band of 1 to 3 percent. Inflation has been north of 3 percent for the last 18 months and it will be near 4 percent for the next 18 months. Those who have done Econ 101 somewhere along the way will know how corrosive inflation is to financial assets but how beneficial it can be to fixed assets such as property. Within the environment in which this bill is trying to encourage New Zealanders to save for their superannuation there is the disincentive out there in the real world of inflation bursting out of the band north of 3 percent for the next 18 months—an anticipated consumer price index of 4 percent or even up to 6 percent in some projections. 
Why on earth in the real world would people save for a superannuation fund as a financial asset? We know that consumer price index inflation is corrosive for financial assets and that this bill could have the exact opposite effect to what it intends to do. It could pour more money into the property market and increase the base level for first home buyers’ homes because of the taxpayer subsidy and the incentives this bill gives some first home buyers and all it will do is raise the floor. 
Frankly when we look at the $1000 per annum provision or at the $3000 or $5000 provision after 5 years we have to consider that the average price of a house in Hawke’s Bay for example is something like $280000 or $290000 which means $30000-odd for a 10 percent deposit. How on earth will this bill help in that instance when we remember that inflation is going through 4 percent? Property inflation will go to 5 or 6 percent increasing the value of the properties that this bill is supposed to be encouraging people to buy. It is such a vicious circle. 
The Minister is screwing up her face—perhaps she does not understand it. This is a simple real-world example. I will give an example about ice skates in a minute I guess. 
Part 3 is about contributions etc. but it has been mentioned that this bill goes hand in hand with the Taxation (Annual Rates Savings Investment and Miscellaneous Provisions) Bill which is also before the Finance and Expenditure Committee. In the words of the Minister of Finance the KiwiSaver Bill has to be in place for the Taxation (Annual Rates Savings Investment and Miscellaneous Provisions) Bill to go through with the changes he wants to bring in. But let us make an example here because the previous speaker spoke of low-income New Zealanders. The KiwiSaver Bill is in conflict with that taxation bill.