Cullen Michael: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
Cullen Michael: Taxation (KiwiSaver and Company Tax RateAmendments) Bill — Second Reading In Committee Third Reading 
[Volume:639;Page:9432] 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 Well at last the previous speaker got angry. He really managed to wind himself up to a full fit of totally insincere anger at the end of that speech. And what was the source of that anger? This Government is daring—daring—to provide support for saving. Who said that? Dr the Hon Lockwood Smith PhD. What is Dr the Hon Lockwood Smith PhD on? He is on a parliamentary superannuation scheme where he contributes 8 percent of his parliamentary salary and the Government matches that at a rate of about two to one at least. There is a money-go-round and Dr the Hon Lockwood Smith PhD has his little dibs right in the middle of it. What he is worried about is that people on ordinary incomes will also get some help from saving. “God help us! It is meant only for chaps like us.” says Dr the Hon Lockwood Smith PhD. It is not meant for ordinary folks—the kinds of people who do not spend their lives looking at their Charolais cattle with moony eyes saying how lovely this all looks from either end and “Here is my future.” while the cattle look extremely anxious and worried about the prospect that may be facing them. 
So he is going to vote against this Taxation (KiwiSaver and Company Tax Rate Amendments) Bill and what is in this bill? A cut in the corporate tax rate. Dr the Hon Lockwood Smith says angrily that this will do nothing for the ordinary taxpayer because it is not a final tax. Well when I said that I was scorned by the National Party. But he did admit finally that it might do a little bit for productivity. He did say that there was no capital problem but it was just that we had to borrow it from overseas and we have to pay an interest rate premium—because we have the second-highest national debt in the developed world as a proportion of national income. So we pay an interest rate premium and that is a cost to business—a cost to business I say to Dr the Hon Lockwood Smith PhD. We pay higher interest rates in New Zealand not just when monetary policy is tight; we pay higher interest rates across the board in New Zealand than many overseas countries do because we do not save enough. 
Dr the Hon Lockwood Smith asks what we are to do about those on low incomes. Well in fact this scheme does more for those on low incomes to help them save than it does for those on high incomes because the tax credits are worth more. You see what is in this bill is not the compulsory employer contributions; it is only the employee tax credit. And what did Mr Key say about that? [ 
Interruption 
] Yes that is right—exactly. He said very little about it. What did Mr English say about it? Well nothing because Mr English has not been allowed to appear in the media because Mr English does not support the madness that says this economy is in a position of being able to have large-scale personal tax cuts. He is not allowed to say that—he said it 2 or 3 weeks ago and he has been told to shut up. 
Mr Key goes on saying that what we need to do is to spend our way to prosperity and that we will do that by borrowing some more money so that we can afford to spend our way to prosperity. Well when one is a short-term money market trader playing with other people’s money and does not have to worry about what happens one can do that kind of thing. But when one is running a country and if one gets it wrong and one wants to restructure “the business” what it means is that one has to throw hundreds and thousands of people out of work and close down businesses all over the show. It is not like the private sector—actually it is not like the private sector. With the decisions that we have to make people cannot suddenly say that they will go and work for somebody else. If we get it wrong people will suffer in large numbers. 
Mr Key famously said that he never cried when he had to sack people. Well I am pleased that I do not go around sacking lots of people. What I can say is that one Kiwi has already decided to come back to New Zealand as a result of this Budget—Jan Cameron of Kathmandu is coming back to New Zealand. Almost every commentator has supported the KiwiSaver changes and it was described as a bold and courageous move. When National members were asked whether they would unwind it they said: “Hmm well we will have to think about this. We will have to look at that and think about it before the next election.” One can already see the retreat and the flip-flop being described in their minds as they go forward. But in the meantime Dr the Hon Lockwood Smith PhD will get very very angry because ordinary New Zealanders are going to get supported to save—and that is not what is supposed to happen in his view of life. Tough!