Burns Brendon: Taxation (GST and Remedial Matters) Bill — Second Reading 
Burns Brendon: Taxation (GST and Remedial Matters) Bill — Second Reading 
[Volume:669;Page:15780] 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I will start tonight by joining with other members in the House in expressing my sympathy to the families of the 29 miners whose lives have been confirmed as lost at Pike River. In Christchurch over the last 3 months we have had our own share of heartbreak but it is nothing like what those families must be going through tonight on the Coast and in other parts of the country and other parts of the world. Mercifully and miraculously no lives at all were lost in the 4 September earthquake in Canterbury and that was in a city of about 400000 people and a wider province. So when we have confirmed tonight the loss of those 29 lives in a population on the West Coast of I would guess fewer than 30000 people it brings it home to us that every Coaster will be touched by this tragedy in some way—in a personal way or in another way. I think that the hearts of all the members of this House will go out to that community tonight. It does of course make the job of considering a rather dry technical tax bill a little harder but that is the duty of this Parliament tonight. 
The Taxation (GST and Remedial Matters) Bill as has been mentioned makes some rather technical changes to tax legislation. The timing of it is rather interesting. It came before the House and was referred to the Finance and Expenditure Committee while the Government was considering and then introducing the GST tax changes to take GST to 15 percent. Although this bill is quite a separate matter it obviously reminds us of the other GST changes. I note the very recent public opinion poll that shows that no less than 53 percent of New Zealanders feel no better off after the tax changes that were at the heart of the increase of GST to 15 percent and allied cuts in personal tax. This bill deals more broadly with taxation. 
We note that throughout the earlier part of this year both the Minister of Finance and Prime Minister were talking about how the tax system was a very powerful lever in the economy. In this year’s Budget we saw tax cuts for those on high incomes. The legacy of that Budget has been higher prices across the board not the impact in terms of the recovery that was expected. The Prime Minister predicted that we would be growing aggressively out of the recession but in fact the economy recovery has flattened off. In the words of the Reserve Bank it is now a “tepid” if not “fragile” recovery. So the tax cuts introduced by the Budget are not making any particular impact in respect of the economic recovery. 
Coming back to this bill and its amendments there are a number of technical amendments to the KiwiSaver scheme. It is with some regret that we note the Government did not take the opportunity to use this bill to undo some of the damage that it did under urgency in this House 2 years ago when it took apart the KiwiSaver regime. It is interesting to note that in the Finance and Expenditure Committee today we heard the Retirement Commissioner talk about the three pillars that are at the heart of how we approach superannuation in this country with the first being private savings the second being New Zealand superannuation and the third leg of it being what KiwiSaver has introduced. Yet we note that KiwiSaver has been gutted under this Government. 
KiwiSaver was in fact the first real attempt by us as a nation to lift private sector household savings in New Zealand to try to get somewhere close to Australia where hundreds of billions of dollars in savings is generated through its savings scheme. Australia has a 9 percent employer contribution. It is a much wealthier nation I acknowledge and that is why KiwiSaver as introduced by the previous Labour Government had a graduated scheme with a 1 percent employer contribution rising over 4 years to a 4 percent contribution. It was not compulsory; people were able to opt out if they chose to but the scheme was designed to encourage people to come in. At the last count I think nearly one and a half million New Zealanders had taken up the KiwiSaver scheme. So its popularity is certainly there and it is with regret that we saw those cuts. 
We thought this bill might be a chance for the Government to acknowledge that because just as the bill was coming to the select committee the Government acknowledged to the nation that we needed to do better in savings—we needed to do considerably better in savings. If we needed an underlining of that it came in the last few days with the decision of Standard and Poor’s to put this country on negative credit outlook. The reason it did that was our poor savings record as a nation. But there is nothing in this bill in respect of reversing those cuts to KiwiSaver; regrettably the amendments are technical. 
What KiwiSaver had done was to begin the process of turning round our savings problem as a nation. It was allied with the Cullen fund the New Zealand Superannuation Fund and also that other pillar—if you like—of our savings which is our attempt to ensure that the baby boomers amongst us have some more security from New Zealand superannuation when retirement day comes. Of course that fund like every other superannuation fund in the world is starting to pick up in terms of the return it is making after it was affected by the vagaries of the world economic crisis in 2008-09. 
The thing I note to the House tonight is that the changes this Government has made in respect of savings both with regard to KiwiSaver and the Superannuation Fund are in my view part of a pattern that goes back for more than 30 years. In 1974 Roger Douglas who is now Sir Roger—and he is still a member of this House and I acknowledge that—was working in the Kirk-Rowling Government. He was the architect of its superannuation scheme. It was a contributory scheme. If that scheme had still been in place today I believe we would have been a wealthy nation. 
We look at Australia and often people point to the minerals of Australia as the basis of its wealth. Sure that is a very very good fundamental for the Australian economy. But in fact the Australian savings regime which gave it the power and the clout to withstand some of the shocks that we have seen over the last couple of years is a very important component of the fundamental strength of the Australian economy. It is a fundamental strength that we do not have and regrettably we could have had it if that superannuation scheme had not been abolished in what was a blatant attempt to buy an election in 1975. It was a blatant attempt and it did not stop there. 
In 1990 after Labour had made some brave changes in office to national superannuation Jim Bolger the then National leader campaigned on returning that scheme with the “no ifs no buts no maybes” promise. He then reversed that promise and made some cuts to the national superannuation scheme. 
We have come right up to this day where we see the cuts to KiwiSaver and to the New Zealand Superannuation Fund. Obviously those— 
Amy Adams 
: I raise a point of order Mr Speaker. I suggest that the member has drifted somewhat further than the ambit of the bill we are discussing. [ 
Interruption 
] 
The ASSISTANT SPEAKER (Eric Roy) 
: I am on my feet. This is the second reading and members should look at the Speakers’ rulingsabout speaking to the bill and the principles of the bill. There is tolerance to allow comparisons to be made and drawn but to get into a general debate that is historical is outside the scope of the bill. The member should make his comparisons and come back to the bill. 
BRENDON BURNS 
: Thank you Mr Assistant Speaker. That is the history of National’s record on superannuation and savings. There was an opportunity under this bill for it to make some changes but it has not done that. 
What the bill does do is to introduce zero-rated transactions involving land. That is a good thing to see happen although we think that the select committee might have considered a zero rating for fruit and vegetables to try to take some of the sting out of the increase in GST that has been introduced. Obviously the Government was very willing to discuss every other aspect of the GST scheme and some further technical changes to GST were brought in through this bill. Prices are rising pretty strongly but there is no move in this bill to address GST on fresh fruit and vegetables. The bill goes to the zero-rating of transactions involving land and that is welcome. Those technical amendments are important. We have these wash-up bills on a fairly regular basis but nothing in this bill delivers in terms of the rising costs being faced by ordinary New Zealanders. 
The final comment I will make in respect of this bill which is the third or fourth quite complex tax bill in the 2 years that I have been on the Finance and Expenditure Committee is that we know these bills are necessary. They are there to amend an increasingly complex set of tax laws. We have to have amendments to close the loopholes because otherwise people are disadvantaged.