Beaumont Carol: Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill — In Committee 
Beaumont Carol: Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill — In Committee 
[Volume:666;Page:13451] 
CAROL BEAUMONT (Labour) 
: 
 I rise to speak on the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill. As others have said we are supporting this bill and a number of very sensible changes are being proposed. I note that much of work was started under the previous Labour Government. We also have a Labour member’s typescript amendment in the name of Stuart Nash which I intend to come back to. 
The issue of improving trans-Tasman portability of retirement savings is a very important one given the movement of people between our two countries. Quite a significant amount of money is potentially being covered here up to NZ$16 billion. We think that improvement is a positive thing which potentially will assist individuals so that they are not stung by multiple fees for the administration of their retirement savings account. Obviously it will assist in something that both countries value which is ensuring that people can save for their retirement and have an adequate standard of living in their retirement. So that is a very positive part of this bill. 
It is interesting to note the question of the relationship between Australia and New Zealand and movement between the two countries. That question has been raised certainly when Labour was in Government and we have been raising it quite strongly in recent times given the increasing gap in wages between Australia and New Zealand. I know that others have tried to assert at various times particularly when Labour was in Government that the reason New Zealanders move to Australia is the difference in tax regimes—well for the record that claim is obviously rubbish. The main reason is the differential in wages which is around 30 percent and growing as we know. 
That is very worrying for us and I note that the Government has no plan to address that particular problem. Its economic development strategies do not focus on the workplace or on lifting workers’ skills. If we want to transform our economy and create the sort of high-wage high-skill highly productive workplaces that we need in order to be successful internationally we really need to focus on lifting wages lifting skills and looking at how we organise and invest in our workplaces. 
But let me come back to the matter at hand. We are supporting again some of the Supplementary Order Papers. It is interesting to note the fairly extensive transitional provisions that have had to be made to get the GST increase through without creating some very strange anomalies and unintended consequences. That is probably a consequence of the way the Government forced through GST increases under urgency in Budget 2010 without really considering some of the compliance costs and unforeseen consequences. I think that is a real shame. 
Accounting firm Ernst and Young stated last week: “As we face the harsh reality of the 1 October GST increase to 15 percent many are realising this is not a modest increase and the issues are actually more complex than anyone first imagined”. One of the transitional arrangements relates to the fact that the changes were forced through without considering all the consequences and now have to be tidied up in this bill. 
Very importantly for members on this side of the Chamber GST increases will have a hugely detrimental effect on New Zealand families and business. Every day my colleagues and I have people talking to us about their concerns about the additional costs they will face with GST rising the implications of that rise for inflation and their recognition that the so-called compensation they will have is absolutely ludicrous. People do not buy it when members opposite say that their concerns have been taken account of by the paltry for most New Zealanders tax cuts or the small increases for beneficiaries that have been made. People are not silly. They are really struggling already so they see that as a real issue. 
That is why I really want to speak in favour of the amendment put forward by my colleague Stuart Nash to exempt council rates from the increase in GST over the transition period. That is a very sensible provision and I urge members opposite to consider it. Basically it will exempt this year’s local government rates from the increase in GST to 15 percent. As I have noted there are a number of transitional provisions in this legislation that look at exempting at 5-year finance leases lay-by sales and insurance contracts from the increased GST rate. The underlying reason for that is broadly similar to the reason that Stuart Nash has put forward his amendment on exempting council rates. 
Let us look at why we need to make the amendment. As I have already mentioned the costs being faced by New Zealanders at the moment are enormous and people out there are struggling. The majority of wage earners and salary earners are seeing their wages and salaries lift by a massive zero percent. That is right; most people are not getting an increase in their income. Many people have lost hours of work including overtime payments and I know that if members opposite are honest unless they are wandering around with their eyes closed and not talking to people they know that to be a fact. Here in this amendment is a small thing that we can do to help relieve the pressure that families are facing. 
Mr Nash referred to budgeting services and I will also put on record my acknowledgment of those people. They do a fantastic job against the odds in trying to help struggling New Zealand families. Recently I was at a meeting hosted by the Mangere Budgeting Services Trust. It was a packed meeting with people from across Auckland present and I think some of the things that were raised at that meeting are worthy of the Committee’s interest. 
The budgeting services people noted what had just happened which was that 150 jobs were advertised at the New World store in Mount Roskill and 2700 people had tried to get those jobs showing that there was a huge issue with unemployment. They also talked about the fact that the average level of debt of those people approaching budgeting services was on the increase. They said they were seeing more and more people coming in with debt related to loan shark loans with rates of interest of over 100 percent. We know that members opposite have failed to take the opportunity to address that particular issue. I acknowledge the Hon Peter Dunne because he in fact did not take that position on my private member’s bill. He supported the Credit Reforms (Responsible Lending) Bill which would have made a difference. 
The budgeting services people also told us that when people were looking for housing—and as we know it is a very tight housing market in Auckland at the moment—they were being pushed more and more into the private sector. Many gave examples of people paying upwards of 65 to 70 percent of their income to a private landlord. That does not leave much for food. 
The thing that came through from all of the budgeting service people was that what was really being squeezed the thing that households could control—and the question is whether we think this is appropriate—was the food that they put on the table for their children and themselves. People are trying to live on ridiculously small amounts of money and they are not eating properly. They are really struggling and there has been a massive increase in food grants. I think it is worth noting some of those concerns raised by budgeting services in that very recent meeting. 
Coming back to the amendment I say that it will help. It will help people who are paying their rates by creating a situation where they do not have to pay the higher rate of GST on their rates for this year—that is the rates bill from 1 July 2010. Again I urge members opposite to support that change. 
I will also take this opportunity to talk about KiwiSaver. I acknowledge that we have Supplementary Order Paper 158 which I understand is now in the name of Mr Garrett. I assume that he is replacing Mr Boscawen our new Minister of Consumer Affairs in moving that amendment. We support that Supplementary Order Paper. We think it is logical. 
I note that it is extremely difficult for wage earners and salary earners to save at the moment for the very reasons I have outlined. It is very difficult for people to make ends meet. They are facing higher costs across the board so that is a problem. None the less the bill is a good move. Having a workers’ superannuation scheme has given Australia a real advantage over this country. A massive amount of capital has been built up in Australia as a consequence of having decent workers’ superannuation. Effectively it is a virtuous cycle because workers are saving so they get a good outcome in their retirement and the economy has access to capital.