Huo Raymond: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — In Committee 
Text is incorporated into the Bound Volume 
Huo Raymond: Taxation (Annual Rates Returns Filing and Remedial Matters) Bill — In Committee 
[Sitting date: 28 August 2012. Volume:683;Page:4844. Text is incorporated into the Bound Volume.] 
RAYMOND HUO (Labour) 
: 
 The Minister of Revenue who has just resumed his seat talked about the reality. According to the Minister the reality was that the savings of the scheme have been more than doubled. By pure mathematics that more than doubling of the figure would have been doubled further if the National-ACT Government had not cut the contribution by half. 
To be fair to the Minister in the chair the Minister of Revenue there are good initiatives in this part Part 2 and in other parts and we will talk about the new initiatives when we move on. To be equally fair to the general public the New Zealand taxpayers and voters I think the Minister would appreciate the difference between the two words “botched” and “ditched”. What the National Government ditched was the compulsory superannuation scheme in December 1975 and what this current National-ACT Government has botched was the KiwiSaver and it is still botching the scheme. If only Muldoon and the National Government of the day had not terminated the scheme it would now be worth more than NZ$240 billion and would have transformed the New Zealand economy into a world-beater over the past 30 years. According to Brian Gaynor and other leading economists Muldoon’s dreadful political decision instead transformed New Zealand from a potential Switzerland of the southern hemisphere into a low-ranking OECD economy. It was the worst economic decision in the past 40 years. 
Hon Judith Collins 
: Tell me about the Crafar farms. What does your party think about the Crafar farms? Sell them to the Chinese—I just remembered that. 
RAYMOND HUO 
: Well the Chinese community would appreciate the dire consequences. The dire consequences and also the ripples of that decision are still being felt to this date. In fact if the scheme had not been ditched then New Zealand would be much better positioned economically would be able to own many more assets and would not incur that much Crown debt. 
Talking about the Crown debt I enjoyed the questions for oral answer—or Q and A—in this House between the Prime Minister the Rt Hon John Key and the Rt Hon Winston Peters in May. According to those Q and A at the end of 2008 Crown debt was at $6 billion it increased to $50 billion in 2011 under the National-ACT Government and it is expected to reach $75 billion by 2015. 
To go back to the superannuation scheme ditched by the National Government in December 1975 based on the $240 billion projection— 
Dr David Clark 
: $240 billion? 
RAYMOND HUO 
: —$240 billion—each worker would have had $111200 of superannuation assets compared with the current—how much—$6300 and A$86821 in Australia. The scheme would have represented 146 percent of GDP whereas Australian superannuation which is considered to be the benchmark for the world represents only 82 percent of its GDP. That is according to Brian Gaynor and that is a 2007 projection. As a result of the Australian scheme the average 30-year-old Australian is expected to retire with superannuation savings of about A$400000 now—that is according to Devon Funds Management in 2010. 
Australia started its superannuation scheme much later than the New Zealand scheme that was ditched by the National Government in 1975. The Australian scheme has since accumulated assets of over A$1.3 trillion—growing at over A$100 billion per annum. So based on this Australian banks were able to recapitalise during the depth of the global financial crisis. 
John Hayes 
: That was a good benefit for us too. 
RAYMOND HUO 
: Indeed Mr John Hayes. Australia now intends to lift the current contribution to compulsory superannuation from 9 percent of wages to 12 percent. It is also interesting to note that in Singapore the contribution is 20 percent of wages. When National came into power in 2008 as a couple of my learned colleagues mentioned in previous contributions the National-ACT Government cut KiwiSaver which is a similar scheme to the compulsory superannuation in 1975 from 4 percent of workers’ contributions to 2 percent. 
Hon Judith Collins 
: But that was 37 years ago—37 years ago. I thought that member wasn’t even born then. 
RAYMOND HUO 
: Well for the information of that Minister Judith Collins for the first time in 13 years—for the first time in 13 years—New Zealand’s credit rating was downgraded in September 2011. Worse still the lower credit rating is likely to increase the costs of borrowing for the New Zealand economy under that National Government and because of New Zealand’s poor savings record thanks to the National Government and thanks particularly to Prime Minister Robert Muldoon we cannot source these funds domestically but have to rely on offshore markets making our position even worse during the global financial crisis. 
The current National-ACT Government has obviously realised that it has done something wrong. So through this bill— 
Darien Fenton 
: Something? A whole lot of things. 
RAYMOND HUO 
: Well I tried to be polite. Through this bill it intends to raise workers’ contributions from 2 percent to 3 percent. National has been flip-flopping all over the place on KiwiSaver but in general it has not been consistent in its objection to superannuation schemes similar to the one that it ditched over 30 years ago and the one it is botching now. I am curious whether that attitude is driven by ideology or is purely for the sake of it. 
Muldoon’s decision over 30 years ago has had dire consequences. Like most Western countries our population is ageing. By 2050 the ratio of workers per retiree will have fallen from 5:1 currently to 2:1 and superannuation costs will have grown from 4 percent to over 9 percent of GDP. Thanks to Muldoon and his successors the gap between rich and poor has grown wider in New Zealand. While a small group of rich and privileged are becoming wealthier New Zealand as a whole has become poorer and is gradually becoming an economic backwater.