Hipkins Chris: Taxation (Budget Tax Measures) Bill — In Committee Third Reading 
Hipkins Chris: Taxation (Budget Tax Measures) Bill — In Committee Third Reading 
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CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I intend to talk about the cancellation of the mortgage diversion component of the KiwiSaver scheme which is what Part 2 does. I think it is relevant to consider why Kiwis are not taking up mortgage diversion because it has been the key justification for Part 2. 
Paul Quinn 
: Go and check his Twitter site. He admits no one comes to his office to see him. 
CHRIS HIPKINS 
: I say to Paul Quinn that sometimes it is better to remain silent and be thought a fool than to open one’s mouth and remove all doubt. Perhaps he might like to learn from that. 
Coming back to the mortgage diversion scheme I want to take up a couple of reasons that the Minister of Revenue Peter Dunne gave as to why people have not taken up the mortgage diversion scheme. The first one he talked about was the shift in contribution from 4 percent to 2 percent. He said that was one of the key justifications for people not taking up the mortgage diversion component of the KiwiSaver scheme. Of course that shift was something that Labour opposed; we opposed the cutting in half of the KiwiSaver scheme. We see KiwiSaver as being part of New Zealand’s long-term savings future and as helping to address some of the significant financial issues that this country has particularly our savings problem. National said that it would be fine that cutting the contribution down to 2 percent would not have a detrimental impact yet we are now debating an amendment that has been caused in part according to the Minister’s own words by the KiwiSaver scheme being cut in half. 
The other thing I want to talk about is that part of the justification for mortgage diversion of KiwiSaver in the first place was that it gave people some certainty when they entered the KiwiSaver scheme that if they found themselves in financial hardship at some point they might be able to divert their KiwiSaver payments to repay their mortgages. The fact that not many people have taken it up is a good sign because it probably means that not many people in KiwiSaver are facing financial hardship. But we are now going into some very tough economic times; in fact they are getting tougher. We have been going through tough times. Why take away mortgage diversion at a time when people may be reaching the point where they want to take it up? 
Sue Moroney 
: What’s the harm? 
CHRIS HIPKINS 
: What is the harm in leaving it there? What is the real harm? 
We would have been able to debate these issues quite robustly if the bill had been sent to a select committee but because it was not sent to a select committee the only opportunity we have to discuss it is in the Committee stage. So yes there has been a certain amount of wide-ranging contributions on this particular change but that is because this debate is the only opportunity we get to debate it. The public of New Zealand have not had a chance to have their say. Nobody has had a chance to come to a select committee and say he or she would have taken up the mortgage repayment option but for whatever his or her reason was. Rather than giving people an opportunity to have their say the Government is pushing this bill through the House under urgency. We would think that it would have learnt from its tax cuts experience that pushing things through under urgency generally tends to create problems. It means that it gets things wrong. Five months after National had pushed tax cuts through the House under urgency it took urgency again to take them away. So urgency is clearly not the optimal way to pass legislation and it is not the optimal way to deal with this particular issue of mortgage diversion. 
Another reason why people are not taking up the mortgage diversion scheme is that they want to maximise their retirement savings. They want as much money as possible to go into their actual retirement savings rather than into their mortgage because they know—particularly young New Zealanders—that there is no guarantee that by the time they retire National would have made any provision to help with their retirement. The National Government has suspended the Government’s contribution to the New Zealand Superannuation Fund for the next decade. So in 15 years’ time when the next generation goes to the cupboard to see what is there for its retirement savings the cupboard will be bare. John Key’s promise that he will resign if superannuation is cut will be very hollow by then because John Key will have been long gone. So that could well be one of the reasons why New Zealanders are not taking up the mortgage diversion scheme; they want their savings to go into KiwiSaver because they know they will need their retirement savings when they get to the age of 65 or 67 or 68 which may well be the retirement age by the time the National Government is done because it is not committed to putting aside money now to meet the significant costs of superannuation in the future. It is more short-term thinking from National. 
The Budget is all about broken promises and hidden agendas. This measure was not in the National Party’s election manifesto. It was not on its pledge card. National made specific commitments about KiwiSaver on its pledge card. This was not one of them.