Coddington Deborah: New Zealand Superannuation Amendment Bill — Second Reading Instruction to Committee In Committee 
Coddington Deborah: New Zealand Superannuation Amendment Bill — Second Reading Instruction to Committee In Committee 
[Volume:625;Page:20079] 
DEBORAH CODDINGTON (ACT) 
: 
 I rise on behalf of the ACT party for the second reading debate of the New Zealand Superannuation Amendment Bill. I agree with the other speakers who said we have to have informed debate and take care of the retired people in our community. It is interesting that the last speaker Bill Gudgeon said that his party intends to act in a responsible manner as far as this issue is concerned because in the last week or so the leader of New Zealand First has made outrageous and extravagant promises to increase retirement income that have been shown by Treasury not to be sustainable. 
One of the biggest problems we have with superannuation in this country is that for 20 years or probably more now big-spending Governments have at election time come out with vote-buying promises—Sir Robert Muldoon did it—for retired people. It is very easy to stand up in front of a Grey Power audience—they pack halls they are very demanding; they are a big voting public—and make promises that are impossible to keep or if they are kept drive the country further down the road to bankruptcy. I hope that the member for New Zealand First was correct when he said that his party will act in a responsible manner. 
I am pleased that the Social Services Committee has agreed to keep the reviews every 3 years—it was 6-yearly; it is now down to 3-yearly. Those reviews are very important because they give people the chance to have their say. If we are going to continue to have informed debate on superannuation in this country—the sustainability of it how much people are saving the need for more saving and whether people are saving—then we have to have those reviews so that we can have input from all sectors of the community. When we talk about retirement income it is very easy if one is trying to buy votes from the public to think about it just in relation to those people who are already retired. We have to remember that the people who are currently working are paying for those people and trying to save for their own retirement as well. This is where we have a huge problem in New Zealand. It is all very well to say that retirement income is 65 percent of the average wage but what use is that if the average wage drops and drops? Sixty-five percent of the average US wage is pretty good whereas 65 percent of the average Fijian wage is probably not very good and does not give retired people a good standard of living. 
The only way we can ensure that retired people continue to have a good income if we stick to 65 percent of the average wage is to make sure that we have a strong economy. One way we can do that is to stop taxing people especially middle-income earners so much. Research that just came out this week from Sinclair Davidson of the Royal Melbourne Institute of Technology shows that New Zealand is indeed a highly taxed country. It is a myth that we are not highly taxed compared with other OECD countries. All the comparisons done to date that have given rise to that myth average it all out and do not take into account things like age population GDP etc. If we take all those issues into account we find that we are highly taxed. 
There are some damning features of that research. One is that in New Zealand 40 to 60 percent of households currently get more in Government benefits than they pay in tax. That is a very high number. That means that there is a huge amount of middle-income churning. People are paying in tax for things that they get back from the Government. Those people both in terms of financial sanity and also in terms of treating them like adults not children should be allowed to keep their money so that they can do with it what they choose. 
At the moment it is easy for very high income earners to save for their retirement. In respect of very low income earners no one would disagree that we need to provide for people at the bottom end of the heap who cannot provide for themselves. But in the middle we have that huge churning of people who are so highly taxed that they cannot save for their retirement. They are sending their children to tertiary education trying to pay off their mortgage or paying for petrol for their cars—all things that the Government is making harder and harder for them. Despite what the Government says the more it spends—and this is a big-spending Government—the more interest rates go up and the harder it is for people to get by. 
During this election year we will see superannuation get booted around again like a political football. New Zealand First has promised a $500 rebate on rates for retired people. United Future has said that GST on rates should be removed because it is a tax on a tax. It is not a tax on a tax. If we remove GST on rates that will allow local authorities to do away with more and more services—the very reason why authorities are there and why people pay their rates. People pay their rates so they can have a library footpaths lighting parks sewerage and all those sorts of things. They do not pay rates so that local authorities can build palaces and monuments to themselves or so that monuments can be named after a mayor when he or she is replaced. We should not remove GST. It is a goods and services tax. It is a tax we pay on goods and services and local authorities should be providing goods and services not just taxing. Taking GST off rates would give licence to all those local authorities to slip further and further away from their responsibility to provide services. 
 The other interesting thing I would like to point out is that I agree with the Greens’ minority report. In their report the Greens stated that the Retirement Commissioner should be entirely independent and should not be appointed by the Minister. The commissioner should not be an extension of the executive. I presume the Greens will be introducing an amendment to cover that; they have not said. The Greens stated in their minority report that the Retirement Commissioner should be an independent Crown entity in order to give the public the confidence it needs in the level of independence—for the very reason that superannuation should not be a political football. 
When the Retirement Commissioner is appointed by the Minister and is an extension of the executive we will have the Retirement Commissioner reporting back saying what the Government likes to hear. A good example is the recent report from the New Zealand Institute which was set up by David Skilling. We saw in the John Tamihere interview in  
Investigate 
 that the Government set up as a counter to the Business Roundtable the Business Council for Sustainable Development. We do not know for sure but it has been said that the New Zealand Institute was a similar exercise by the Government. What was the first report that came out from the New Zealand Institute? It came out with a Roger Douglas policy—a complicated compulsory savings scheme where every child would get something like $1500 and interest would be added. It is interesting that the Government has gone very silent on this. The report has been—[ 
Interruption 
] No it is the New Zealand Institute and David Skilling who is ex-Treasury. The Government has gone very silent on that and the report has sunk without a trace. 
Gordon Copeland 
: Good guy. 
DEBORAH CODDINGTON 
: Gordon Copeland says that he is a good guy. This is the same party that is bringing in property rights but then they do not believe in property rights when it comes to other people’s money. Go figure!