Key John: KiwiSaver Bill — In Committee 
Key John: KiwiSaver Bill — In Committee 
[Volume:633;Page:4914] 
JOHN KEY (National—Helensville) 
: 
 That speech made by the Minister of Commerce was touching in this regard: she spent quite a bit of time down memory lane talking about how she had saved up for the white boots she got when she was 16— 
Hon Lianne Dalziel 
: They were so cool! 
JOHN KEY 
: I am sure they were really cool. She talked about why savings are really important—I assume this is a Government that believes in savings—why the Government wants to develop a culture of savings and why that is really important. Why do I think that is touching? In 1999 the Labour Government was elected into office. An interesting fact about 1999 is that New Zealanders looked at each other after polling day and worked out that they owed $80 billion. That is what New Zealanders owed when the Labour Government came into office—the Labour Government that Lianne Dalziel has been an important member of. That same woman just told us that she saved up for things and that that was really important. I wonder whether she could answer this question for me because it is quite an interesting little question. 
Hon Lianne Dalziel 
: I bet it’s not relevant. 
JOHN KEY 
: No it is a very relevant question. If savings run to the heart of this Government and if savings are really important can she answer this question— 
Hon Lianne Dalziel 
: I still don’t have a pool boy! 
JOHN KEY 
: I do not have one either interestingly enough. Why have New Zealanders racked up $60 billion worth of debt in 6 years under a Labour Government? That is what they have done. New Zealanders owed $80 billion 6 years ago; they now owe $140 billion under a Labour Government. 
There are a couple of interesting things here. Firstly Mr Woolerton made an interesting point about poor people not being able to afford to save and about my obviously not being able to recognise those issues—which is not correct. I thought I would make this point to him. I wonder whether Mr Woolerton can explain to me the following. If someone earning $40000 a year puts the 4 percent contribution into KiwiSaver that person would pre-tax put in $1600 but because they pay tax they would put in $1200 let us argue. If that person is getting no employer contribution and is earning $40000 bringing up two children paying off the mortgage and everything else how can that person afford to pay that $1200? What has changed? 
Hon Lianne Dalziel 
: Working for Families. 
JOHN KEY 
: No. What has changed in the position of that person from the day before yesterday? Nothing. That person could not afford to save then; he or she cannot afford to save now. That is the whole point. 
I ask members to have a look at the $1200 that that person could put in. If he or she received an employer contribution I accept that that would make things a little easier. He or she could divert only half of his or her own contribution—Mr Copeland wrote his own essay piece about that and he is right. Under that scenario the employer would put in $800 and the employee would effectively put in $600 of which $300 could be taken out. The Government is now telling us that people who earn relatively limited incomes maybe less than $40000—less than the average wage—will somehow miraculously be able to afford to go without that money. That is the very reason why this scheme will not work. Nothing changes in the position of the people whom the Government wants to go into the scheme—those on low to middle incomes. They cannot afford to save. Nothing has changed. If the Government had said to those people that if they earned under a certain amount—if they earned 40 grand or less—a certain amount would be put in by the Government that would have been interesting. But no that is not the position. The Government is telling us that those people will miraculously be able to save. 
That is the very reason that when the Government collects $550 million from the specified superannuation contribution withholding tax—[ 
Interruption 
] Mr Hodgson knows this because he spends a lot of it on the health system and gets nothing for it. The sum of $550 million is sucked out through the specified superannuation contribution withholding tax. Now he is telling us that KiwiSaver will be a roaring success but it will cost $35 million. Well I do not think so. 
When Mr Woolerton takes his next call I suggest that he formally apologises because he now knows that I am right and he is wrong. I understand absolutely how people who do not earn very much money go along and they will not be able to contribute to the scheme because very very little in their position has changed. That is the problem. 
There are lots of different scenarios that would have made the scheme better. Interestingly enough if the Government had not been rushing this measure through because it had stolen $882000 of taxpayers’ money or because it had a problem with Taito Phillip Field if it had been actually doing its work it would have read about what President Bush did in relation to tax cuts. He asked the US Treasury to do some work for him around tax cuts.