Nash Stuart: Taxation (KiwiSaver HomeStart and Remedial Matters) Bill — In CommitteeText is incorporated into the Bound VolumeNash Stuart: Taxation (KiwiSaver HomeStart and Remedial Matters) Bill — In Committee[Sitting date: 25 March 2015. Volume:704;Page:2605. Text is incorporated into the Bound Volume.]STUART NASH (Labour—Napier):As the Hon Clayton Cosgrove and Phil Twyford and a number of members have alluded to we are supporting the Taxation (KiwiSaver HomeStart and Remedial Matters) Bill but I do have a couple of questions around this. If I may make a comment and I do not know whether I am allowed to or not this is my fourth year in this House and I have done a few Committee stages and every now and again members have relevant questions. I must admit that Peter Dunne who I think has been in this House probably longer than anyone—when it is one of his bills he sits in the chair and he listens intently. More often than not if there is a genuine question he stands up and he answers it. I thought that that was what the Committee stage was about but maybe I am a little old-fashioned. I am sure Mr Chair that when you were in the chair and this was a bill that you were passing through Parliament you would try to do the same.The CHAIRPERSON (Hon Trevor Mallard): Order! You are not allowed to bring me into the debate. Thank you.STUART NASH: Oh sorry. I meant a former Labour Cabinet Minister who is now the Chairman I suppose.There are a couple of clauses here. Clause 6 for example is “Schedule 1 amended (KiwiSaver scheme rules)”. All it does is it changes the words a little bit. It adds the term “under section 226” of the KiwiSaver Act 2006. I am not even too sure why that is in there because in clause 8(4)(a) of schedule 1 of the Act it talks about Crown contributions anyway. All section 226 does in the bill is define what Crown contributions are. So I am not too sure why that is relevant but anyway that is part of it.I suppose one of the things I would like to talk about to start with is clause 5B which inserts new section 239. This talks about “Protection from non-compliance:” and this is obviously with regard to the new amendments around the HomeStart policy put forward by this Government. This has added a whole new section on the end of the KiwiSaver Act 2006 after section 238 and this is a section at the end of the Act. There are a couple of things that I just think we need to be very careful about because what we have come through—not just the global financial crisis—and what we have seen is what I believe is a lot of unsavoury unethical or whatever behaviour that went on in our own market. We tend to talk about the global financial crisis as one of the great catastrophes in the modern economy here but we forget that it was actually a lot of the stuff that went on in the mezzanine finance sector that actually destroyed somewhere between—I have not heard an exact figure—$4 billion and $6 billion of savings out of Kiwis’ back pockets. So the global financial crisis might have led to that but in New Zealand the rules around mezzanine finance and prospectuses and investor statements I think we all would agree were quite lax to the point where people really did not know what was going on and they were misled.If you look at new section 239 as mentioned this is a new provision to the KiwiSaver Act. The slight concern I have is that it talks about “Non-compliance with an enactment related to securities is ignored if the non-compliance—(a) results from the enactment of section 6 …”. All section 6 does in the KiwiSaver Act is it outlines who is eligible for KiwiSaver: the definition of employee and employer whether you are a Kiwi and whether you count as an employer etc. etc. So there are no problems there. When we talk about non-compliance in new section 239 it is about how you are protected from non-compliance. We talked about this a little bit in the Finance and Expenditure Committee. In new section 239(b)(i) it says that non-compliance is ignored if it relates to “a prospectus that is registered under the Securities Act 1978 before 1 April 2015:”. So what I am reading this to mean and I could be wrong is that it does not have to be a prospectus or an investor statement or a product disclosure under the Financial Markets Conduct Act if it is lodged on or before April 2015. It is just a little bit confusing. Maybe I am reading this wrong but if I am reading it wrong then perhaps so are a lot of other people because I sat on the select committee. What we need to do is ensure that the people who are putting their money into KiwiSaver or the KiwiSaver providers are mitigating the risk enough so that people I suppose do not have to suffer the risk of incompetence or negligence. That is what I am trying to say I suppose and that was a long way of saying it. That is a major risk I think that we now do not have to face and I hope we never have to again.There are a couple of other things that I would like to talk about in this bill that cause a little bit of concern and a little bit of frustration to be honest. If we look at clauses 3 4 and 5 they are sort of remedial. For example clause 4 is “Section 4 amended (Interpretation)”. This is just an interpretation of salaries or wages. Mr Goff and Jan Logie have talked about veterans. It says here in clause 4(a) “in paragraph (a)(i) replace ‘(6)(b) to (bd)’…”. Well I did what I was instructed to. I went to the Income Tax Act to find out what “(6)(bd)” was and it says it has been repealed. So I had a look at the statute book which if the computer system goes down and the lights go out is supposed to be what we can go to and it is not in here. So I went online and it said in the online version that “(6)(bd)” has been repealed. I then wondered how this could be because it mentions this in this Act. So I went to the top of the Act online and it says that this Act might not incorporate some of the amendments that have gone through Parliament.How frustrating is that for a member who is trying to do a little bit of work to find out what the changes in legislation are actually going to mean—to find they are not even there. Maybe it has been repealed. I cannot imagine it has been put back in in another piece of legislation. But if it has then this is just a little bit sloppy. If “(6)(bd)” does not exist and I can show you the piece of legislation then why is it even in here? I found this a little bit frustrating and I suppose it goes back to a lot of what we have been talking about for a number of weeks now—that is I suppose the sloppiness of a lot of the legislation that we are now seeing in front of this House.I am going to jump around a little bit here. We can go to the title. All I am seeing in a lot of the legislation I am speaking on is amendments or if not amendments then it is legislation to tidy up sloppy legislation that has gone before under this Government. So the title of this could be the “Yet Again Tidying Up Sloppy Legislation Bill” especially around veterans’ affairs.Mr Goff did talk about veterans’ affairs but goodness me if I was a veteran and I had read this Act as it came out—was it in 2013 or 2012 Mr Goff?Hon Phil Goff: 2014.STUART NASH: It was 2014 and we are already amending it. I was on the Finance and Expenditure Committee and I said to the representative of the Defence Force who was at the committee: “Now are there many veterans who are going to be affected by this?” and she said: “Don’t worry. We’ll communicate with them. We know who they are and we’ll do this well.” I said: “Please be sure you do.” because the major concern I had about this was that I got the feeling that this part of the bill was sneaking in under the KiwiSaver HomeStart portions of this bill.This is part of the Government’s core policy. The Government knew that the Opposition parties would go hard on this which we have done. But then in there at the back of it is the stuff about veterans and it actually makes quite a bit of difference. If you have a look at section CF 1 in the Income Tax Act it talks about a veteran’s pension. So what it is actually doing now is inserting the phrases “a veteran’s pension” and “a retirement lump sum paid”. So what it is actually doing is it is taking a lump sum that is being paid to a veteran and now taxing it at a point—it is like giving something and then taking it back. So what this actually does is it means that veterans who have received these lump sums are now subject to taxation. Their Working for Families entitlements change. Their student loan—their requirement to pay these things back changes. And everything like an ACC lump-sum payment will change.The thing that I find a little bit ironic about this is we have just debated in this Chamber and we are debating this out in the public at the moment sending 143 troops away to wear the New Zealand badge and serve in Iraq. Yet what we seem to be doing with those whom we treasure the most with those whose battles line the walls of this Chamber is saying: “Sorry guys we got it wrong again. The money we gave you because you were incapacitated”—and this is in another part of the bill—“we are now actually going to take some back. Oh don’t worry about it. We got it wrong.” In fact worse still we are going to sneak it in under legislation.