Shaw James: KiwiSaver Budget Measures Bill — First Reading Second Reading In Committee Third ReadingText is incorporated into the Bound VolumeShaw James: KiwiSaver Budget Measures Bill — First Reading Second Reading In Committee Third Reading[Sitting date: 21 May 2015. Volume:705;Page:3855. Text is incorporated into the Bound Volume.]JAMES SHAW (Green):I just wanted to follow on from David Clark’s contribution. The Green Party is also moving an amendment Supplementary Order Paper 81 to clause 5 of the KiwiSaver Budget Measures Bill which reads: “Replace clause 5 (page 2 lines 22 and 23) with: 5 Section 226 amended (Crown contribution: kick-start contributions)—In section 226(1) replace ‘is a member or must become a member as provided by section 15(1)(b) or 36(1)(b)’ with ‘is a member or must become a member as provided by section 15(1)(b) or 36(1)(b) and holds a community services card issued pursuant to the Health Entitlement Cards Regulations 1993’.” The intention here is to retain the $1000 kick-start for people who hold a community services card.If you look at the original intention of the primary Act it includes the language that the purpose of the original Act is to support “asset accumulation by individuals who are not in a position to enjoy standards of living and retirement similar to those in pre-retirement.” In other words what we are trying to do is to say that if the Government is committed to reducing the cost of the overall KiwiSaver programme by cutting the $1000 kick-start contribution then at the very least the amendment should not undermine the original purpose of the Act which is to support asset accumulation by individuals who are not in a position to enjoy those standards of living so the amendment to retain the $1000 kick-start for people who hold the community services card would enable the original purpose of the Act to continue to still be fulfilled.We chose the community services cards as the proxy for low income. We realise that there are others—there may be others that have more specificity to them—but part of this is to make it easy to administrate. So when someone is choosing to open a KiwiSaver if they are able to present their bank or KiwiSaver provider with a community services card then that is just very easy to administer as opposed to having to prove their income levels at the date at which they applied for the card and so on. We do not believe that this would add significant cost to the Crown because first so many people are already in KiwiSaver. There are about 600000 community services cardholders who are not already superannuitants. Many of those people will already be in KiwiSaver. Of the ones who are not in KiwiSaver some of them simply will not open an account because they do not believe that they have got the income to do so. But for those people who do then the incentive would remain in place. As we know the incentive scheme has worked extremely well so it would just ensure that those people retain some of that support.My colleague Jan Logie earlier referred to an Inland Revenue Department report which pointed out that 92 percent of the public have recognised the $1000 kick-start incentive—that they were aware of it and that was a good reason for them to sign up. There are real substantial issues here to do with embedding inequality because if you are essentially saying to people that KiwiSaver is really honestly a preserve of the middle and upper classes and for people who are on lower incomes it does not really matter and we do not really care about getting them into the programme then in fact not only does that undermine the original intention of the whole KiwiSaver programme to start with it also further embeds and deepens inequality in this country. When people are in different starting positions and then some of them have got a very attractive KiwiSaver scheme and the rest do not then by the time they get to retirement age those who are on low incomes will be absolutely destitute whereas the wealth of the middle and upper income people will have grown over the course of their life. So we think that this Supplementary Order Paper to retain the $1000 kick-start for community services cardholders is a way—not the only way; but it is a way—of trying to prevent that deepening inequality from happening.