Huo Raymond: Taxation (International Taxation Life Insurance and Remedial Matters) Bill — In Committee Third Reading 
Huo Raymond: Taxation (International Taxation Life Insurance and Remedial Matters) Bill — In Committee Third Reading 
[Volume:657;Page:6644] 
RAYMOND HUO (Labour) 
: 
 I rise to take a call on the bill and wish to affix my contribution on the provisions in relation to remedial amendments in the bill in particular the clauses concerning KiwiSaver. The bill introduces a number of remedial amendments to the KiwiSaver scheme and in the Finance and Expenditure Committee we spent a certain amount of time hearing submissions and deliberating on them. A number of submissions are no longer relevant due to the removal of the employer tax credit. What is interesting are the issues surrounding the definition of member credit contribution in section YA 1 of the Income Tax Act 2007 and in section OB 1 of the Income Tax Act 2004. Officials are of the view that the definition should be amended to exclude the $1000 kickstart payment and the member tax credit. This would have the effect of preventing members from double-dipping which would occur if the Crown contributions were included in the calculation of the member tax credit. 
A technical issue arose in relation to whether the amendment would be intended to be retrospective or prospective. If it should be retrospective the recalculation of the member’s accounts would be required. As the independent specialist adviser Therese Turner pointed out in her report recalculation of a member’s accounts would be required. Given that some members may have already withdrawn from the scheme that would be problematic. 
I cited this relatively small part as an example to show how important it is for us to work together to bring our tax law up to date which is the main purpose of this bill in general and to provide some certainty to make the relevant clauses operative. It is particularly so to the 1.1 million New Zealanders who have signed up to the KiwiSaver scheme. I congratulate the Hon David Cunliffe on taking the initiative for the multiparty banking inquiry by the Labour Green and Progressive parties. There are two major concerns; I cited this one because the savings concern is particularly relevant to what we are talking about now. 
Two major concerns were expressed by submitters across the board. The first concern was that banks have grown faster than the surrounding economy indicating that wealth has transferred from the trading economy to the non-trading economy which has made it harder for us to grow a healthy sustainable economy. The second concern which is relevant to this bill is our low savings rates and spending habits of New Zealanders. Unfortunately the Government’s only response so far to the low savings rate is to cut KiwiSaver. The KiwiSaver scheme introduced by the Labour Government was designed to lift private sector household savings in New Zealand. By cutting the incentives for KiwiSaver the National-led Government is decreasing the amount that ordinary Kiwis will be able to save. The Government’s plan betrays the over 1.1 million New Zealanders who have already signed up and the Government’s move has effectively taken away opportunities from future generations. Thank you.