Robertson Grant: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeRobertson Grant: Oral Questions — Questions to Ministers[Sitting date: 27 August 2015. Volume:708;Page:6249. Text is incorporated into the Bound Volume.]6.GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he stand by the Prime Minister’s statement that “the removal of the $1000 kick-start contribution will not make a blind bit of difference to the number of people who join KiwiSaver”?Hon STEVEN JOYCE (Associate Minister of Finance)on behalf of theMinister of Finance: Yes. This was based on advice from officials that stated: “This change is likely to have only limited effect (if any) on enrolment rates in KiwiSaver among the legislated target population because other subsidies and employer contributions remain in place.” Incentives for people to join KiwiSaver include auto-enrolment when starting a new job the 3 percent employer contribution and the member tax credit of up to $521 each year all of which significantly outweighs the $1000 kick-start payment when taken together.Grant Robertson: Why did the Prime Minister tell his House that “the formal advice from the Inland Revenue Department” was that sign-up rates for KiwiSaver would not be affected by cutting the kick-start when the Inland Revenue Department’s regulatory impact statement on cutting this kick-start includes paragraph 44 entitled “Lower numbers of KiwiSaver members (particularly among the self-employed and children)”?Hon STEVEN JOYCE: The paper and the regulatory impact statement make a number of comments. I draw the member’s attention to paragraph 56 of the Cabinet paper which says: “This change is likely to have only limited effect (if any) on enrolment rates in KiwiSaver among the legislated target population because other subsidies and employer contributions remain in place.” In terms of the regulatory impact statement which is available online to members paragraph 32 says a number of things including “Therefore removal … of the kick-start would reduce fiscal costs without reducing savings rates …”.Grant Robertson: How does he justify his belief that the cut to the kick-start for KiwiSaver will not make a blind bit of difference when the Inland Revenue Department statistics for the month of July show there was a 45 percent net decline in the number of new members compared with the monthly average for the previous year?Hon STEVEN JOYCE: I caution the member about 1 month’s figures in relation to this.Grant Robertson: 2 months.Hon STEVEN JOYCE: But the member talked about the July figures. The key thing to note is that the numbers are of course dropping each year anyway. The reason they are is because so many people have signed up—2.5 million New Zealanders are now in the scheme. In 2009 25000 people a month were signing up last year that was closer to 15000 a month and this year it is dropping again. It would be expected to as increasing numbers of New Zealanders are signed up because there just are not as many New Zealanders left to sign up.Grant Robertson: That’s such a load of nonsense.Hon STEVEN JOYCE: No it is not nonsense Mr Robertson; it is called mathematics—Mr SPEAKER: Order! The Minister can resume his seat to await the supplementary question.Grant Robertson: Why did his Government use Treasury’s analysis to justify cutting the kick-start when that analysis has been described by the New Zealand Institute of Economic Research today as being wrong because it used data from a short time period affected by the global financial crisis compares the wrong groups of people and ignores evidence that young people tend not to save without incentives?Hon STEVEN JOYCE: I am not sure that saying the period 2007 to 2010 or 2011 is a short period—in fact it covers a period prior to the global financial crisis as well. Actually—Grant Robertson: Right so it’s all fine? It’s all fine those stats?Hon STEVEN JOYCE: Just shh for a minute Grant—you are getting carried away.Dr Megan Woods: Have you lost your cards again Steven?Hon STEVEN JOYCE: Just wait and I will answer the question for you.Mr SPEAKER: Order! Just finish the answer.Hon STEVEN JOYCE: The reality of it is that if you look at the comments by the Financial Services Council it talks about how KiwiSaver has been beneficial with some income groups and the Government absolutely agrees. KiwiSaver has been beneficial. The earlier Treasury report talked about a lift in saving rates overall. In fact the greater impact of lifted savings rates has actually come through the tax reductions that the Government introduced in 2010 which the member does not understand because the entire Labour Government was high-taxing New Zealanders throughout the 2000s and then wondered why people were not saving.Grant Robertson: Does he agree with Treasury’s advice that KiwiSaver is poor value for money and only marginally adding to New Zealand’s national savings rate?Hon STEVEN JOYCE: I think it is fair to say that it is only marginally adding to New Zealand’s savings rate because a fair amount of the savings that are occurring is transferred from other potential savings including a reduction in people’s—Grant Robertson: That’s exactly the opposite of what the NZIER report says.Hon STEVEN JOYCE: Well with the greatest respect the report was sponsored by the Financial Services Council which likes to be subsidised for savings. I understand that but that is the council’s perspective. Again for the member’s edification the reality is that KiwiSaver has not lifted a lot of savings rates overall. It has definitely helped in some income groups—there is no doubt about it. The Government is supportive of it and retains very big incentives for people to belong.Grant Robertson: So for the record can he confirm that he continues to believe that the cut to the KiwiSaver kick-start has not made a blind bit of difference to the number of people in this scheme despite the fact that there are now 2000 fewer zero to 17-year-olds in the scheme today than when he put that in?Hon STEVEN JOYCE: The Minister did stand by the Prime Minister’s statement. The point for the member to understand is that actually there has been a lower number so far of zero to 18-year-olds which you would expect because they are not actually in the workforce. But the primary reason why we are continuing to see a decline in the overall numbers of people in the KiwiSaver is that—Grant Robertson: Just admit it—he was wrong.Hon STEVEN JOYCE: Mr Speaker he just keeps up a commentary the entire time I am trying to answer his question which makes it quite pointless because actually he does not want an answer. What he does not want to know—Mr SPEAKER: Order! [Interruption] Order! The Minister will resume his seat.