Carter David: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
Carter David: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
[Volume:639;Page:9457] 
Hon DAVID CARTER (National) 
: 
 I certainly want to speak to Part 2 of the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill because looking through this really complex legislation that the Hon Peter Dunne and the Hon Michael Cullen have cooked up it springs to mind that one important question has not been asked in the debate so far. I would ask how many more Inland Revenue Department officials will be employed to manage this extremely complex KiwiSaver scheme. How many more high-rise buildings in Wellington will be filled with Inland Revenue Department officials who have to work through the complexity of a scheme that even Treasury which is known for its optimism in floating the scheme says that only 50 percent of wage earners will take up? 
With this legislation we will have a scheme whereby come 1 July employers must by law sign up everybody who works for them. All the wage calculations will have to be redone. Many people in New Zealand farming situations are paid on a regular basis with an automatic payment. Those payments will all have to be changed. There will be huge complexity for the employer huge confusion for the employee and lots and lots of bureaucrats trying to sort it out. 
An employee is signed on to a scheme presumably a little tagged account is opened in KiwiSaver for this person and 2 weeks later this lower-income New Zealander will say: “I like the idea of it but I simply cannot afford to stay in.” So this person will go back to the employer and ask to be taken out of the scheme. Treasury is saying that 50 percent of employees will take this option; I say to Peter Dunne today that it will be more than 50 percent judging by the calls coming into my electorate office this morning. 
So once this employee asks to be taken out the poor old employer will have to go back and recalculate the wages and PAYE deductions and will have to go back to the bank where the employer will probably incur a charge to change it back to what it was prior to 1 July 2007. Then the Inland Revenue Department—with its hundreds more bureaucrats—will have to post out a cheque to the employee for the $20 or $40 that has gone into the account in the couple of weeks before the employee made the decision that he or she could not stay in the scheme. That sounds incredibly complex and incredibly stupid. 
We can see the shock on the faces of the New Zealand First members who have only just realised that this will happen. Yet they are signed up to support this nonsense. Labour members have not even thought this through. Michael Cullen has—this scheme employs lots of bureaucrats; that does not seem to worry him—but the Labour members themselves obviously have not realised how complicated it is. 
That is why we saw Dr Cullen getting a really hard time on  
Close Up 
 last night. Then he came down to the House at about 8 o’clock last night and lost his rag because he knew he had lost the argument with John Key on the benefits of the KiwiSaver. He knew then that New Zealanders had not swallowed it hook line and sinker. He has been too clever by half and has stuck something in here that his own Labour caucus simply does not understand. 
Today when we analyse this scheme in detail we realise just how massively complicated it is and how much more Inland Revenue Department bureaucracy we will have to build to manage something that in a couple of weeks will revert to the status quo for low-income New Zealanders. Peter Dunne instead of sitting there should actually stand up and defend this legislation. He is part of the design of the thing. He will go down as being attached to the folly of Dr Cullen for the KiwiSaver scheme which will not work. It will not work because lower-paid New Zealanders simply cannot afford to stay in the scheme. 
 I look at the complexity of the Dr Cullen scheme and at the simplicity of the scheme of Peter Costello Treasurer for the Australian Government. He has come in with five Budgets one after another in a row and he has been able to simplify the tax system by delivering tax cuts and giving the chance for wage earners in Australia to keep more of their own money. But no Dr Cullen says: “That would be wrong we cannot leave that money in the hands of New Zealanders.” and says that he can do better.