Rich Katherine: KiwiSaver Bill — In Committee 
Rich Katherine: KiwiSaver Bill — In Committee 
[Volume:633;Page:4944] 
KATHERINE RICH (National) 
: 
 It has been very interesting to see the transition that Gordon Copeland has made. 
John Key 
: I raise a point of order Madam Chairperson. I am very sorry to interrupt my colleague Katherine Rich but I think the chairman of the Finance and Expenditure Committee was distracted when you were seeking the call. As we have pointed out during the entire debate tonight not one Government member has taken a call. The Associate Minister of Finance and the chairman of the Finance and Expenditure Committee are here and they were obviously distracted. If they believe so much in KiwiSaver maybe they would like to take a call. It is great to see the Minister on his feet. 
The CHAIRPERSON (Ann Hartley) 
: That was not a point of order and the member knows it. 
Hon Trevor Mallard 
: I raise a point of order Madam Chairperson. That point of order has no merit. It is clearly a spirited one from the member after dinner and it is about time he was a bit more responsible. 
KATHERINE RICH 
: That was exactly the sort of point of order we have come to expect from Trevor Mallard. 
It was interesting to hear the two financial mandarins debate across the Chamber but I am more interested in the transition that Gordon Copeland has made this evening. Earlier on in the debate we said he had had a lot to do with bringing in the mortgage diversion provisions of the bill and he said it had nothing to do with him and that he was humbled if not flattered by the thought that the National Opposition should think he had something to do with it. Now in his last speech he said he was happy to take all the credit. So it has been an interesting transition during the debate. 
In this part of the bill the rate of the Government contribution is specified—the $1000 which is apparently designed to make New Zealanders line up up and down the country to take their part in the KiwiSaver scheme. This is also the part that lays out quite complex rules and regulations about how money can be taken out. What interests me is the purpose of this bill which I will just recap for those who are listening. It is: “to encourage a long-term savings habit and asset accumulation by individuals …” so that they can: “enjoy standards of living in retirement …”. Likewise: “The Act aims to increase individuals’ well-being and financial independence particularly in retirement and to provide retirement benefits.” 
If that is the case then why is it so easy for young people to take their money out after they have been involved in the scheme for only 5 years? If individuals go into the scheme in their 20s they will be able to have full rights to withdraw large sums when they are nowhere near retiring. If the aim is to encourage people to think seriously about their retirement then we have to make it harder not easier for people to take their money out. The Government thinks that it has brought up a new political idea in mortgage diversion. What the Government has done is create a cheque account. It has made it very easy for New Zealanders to divert their funds and put them into their first home. What is to stop them from selling their first home? We live in a country that seems to have a fascination with property. Most Kiwis do not live most of their lives in one house any more and are in their first home for probably only a couple of years. This is what this scheme is designed to do. It gives us the opportunity to put money towards our first home and then sell it—to make a bit of money on it and then put it back in our pocket. It is not put away squirreled away for our retirement when we turn 65. I know that the Minister of Finance is currently thinking about that. These are the sorts of issues that do concern him. 
I am interested in a scheme that will be attractive to younger people. At the moment if we look at the $1000 and the wee bit of a tax break we must ask whether that will be enough to encourage large numbers of younger Kiwis to take up the scheme. I do not know whether it is. I have seen other schemes whereby there was huge incentive and whereby the Government might match the contribution by $2 to $1 which was the case at the Foundation for Research Science and Technology where I used to work and younger people would still not take it up. They decided they wanted to have more money in their pockets to go out on a Friday night. They were not encouraged to consider long-term superannuation no matter how attractive at that time it was. 
What we have here is a scheme that is quite different from what the Finance and Expenditure Committee actually looked at. I am not surprised that some of the Labour members have not taken a call on this bill because it looks so dramatically different from when they sat around the select committee table. The select committee looked at this bill and New Zealanders looked at it and thought they were being consulted then 2 weeks’ later it was dramatically different. That is not due process; that is not the way things should be done. This scheme will not work.