Jones Shane: Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill — In Committee 
Jones Shane: Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill — In Committee 
[Volume:666;Page:13455] 
Hon SHANE JONES (Labour) 
: 
 Kia ora ano tatou. Naturally we support the Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill and it follows that it could do with a few improvements not the least of which lie with the very thoughtful contribution offered by my colleague Mr Stuart Nash. Up and down the country people on fixed incomes are facing pressures. Those pressures will definitely rise over the next 6 to 8 weeks. [ 
Interruption 
] 
Mr Foss is right in one respect: the gales of rhetoric across the Chamber will go on but what will not go on is the ignorance about what the Government’s agenda is in relation to fiscal policy. Never mind what we say in the House come October the changes and the cost rises will begin to bite. They will affect people’s pockets and they will affect their perceptions as to why the Government decided to shift the base of its tax revenue to consumption whilst at the same time borrowing from the international capital markets to fund tax cuts. That cannot be explained away. 
It is unfortunate that the spirit of companionship that my colleagues on the Finance and Expenditure Committee showed to Mr Foss and his confrères has not carried over to the savings debate in the Committee. The Savings Working Group 
is required to report back by 20 December. It will cover or obfuscate the gaping hole in the Government’s thinking. The Government has now outsourced to the Assistant Governor of the Reserve Bank Dr McDermott and a host of other identities from the commercial world the responsibility to find the answers that the Government can take forward and use to plug the gap. Although the Government is now running the rhetoric—of which this bill is a small part—that the problem is capital accumulation in the New Zealand economy it has found itself unwilling to derive or incapable of deriving ideas from amongst it own ranks or it has probably found that there is already within Treasury a belief that there is no savings crisis. The small changes in this bill were largely Labour policies anyhow. They are just a small set of minuscule changes grafted on to the architecture that the Government inherited in terms of savings. 
But there is a deeper point at stake. That point is that if the Government shares the view that the problem with the economy is capital accumulation then why has it made retrograde decisions over the last 18 months to disincentivise people to save and also to undermine New Zealand’s domestic sovereign fund? Those two decisions show that the Government acted in a panic-stricken state and has never had a strategy to deal with savings. 
I accept that a number of the identities in this task force have a positive contribution to make but it will be a contribution that they will be required to make within the pipeline of the Government looking for ideas to take to the next set of elections. It is a tragedy that taxpayers’ funds are being used to subsidise this crowd and its absence of intellectual rigour or original thought as to how New Zealand should deal with that deficiency. 
I will come back very briefly to the suggestion that we ought to offer relief in relation to the application of GST on rates. Gordon Copeland a colleague of the current Minister in the chair the Minister of Revenue warbled on about this at length which probably meant that the idea was never going to go anywhere. However having said that he had that suggestion and a host of other ideas. Given the obvious skill base and a host of other very positive attributes represented in my colleague Mr Nash who is bringing the idea forward the idea has obviously come on time. 
It is disappointing that quite apart from the refinement changes the Government is not addressing some of the deeper challenges and I daresay it is incapable of doing so. It seems as if it is gripped by a whole set of systemic problems and is unwilling to move on from the mantra of the 1990s and at the same time is unwilling to embrace a new paradigm or a new set of ideas to move New Zealand on to its next phase. Quite frankly if we strip away the refinement changes and Mr Dunne’s contributions etc. we find that deep down the architecture of this bill does not significantly differ—other than the tinkerings of the current Government—from what Dr Cullen sought to do in 2000 and 2001 and it does not bring forward an original contribution to arrest the decline of savings. 
If we seek to achieve the things that Mr Brownlee and others tend to talk about from time to time—such as boosting the productivity etc. of New Zealand firms—we will find that that cannot come unless we have access to capital. Unlike the Prime Minister members on this side of the House have grown quite tired and quite apprehensive about the flood of international capital—which is about to be shepherded through no doubt by the current Government—and the Government’s unwillingness to stop the sale of farmland to overseas interests. That no doubt will be an item that we will fight vigorously at the next election. 
We are no longer in the camp where we can see a worsening current account deficit and the laissez-faire attitude of the current Government that it does not mind where capital comes from. We actually want to husband sources of capital in our own country and we want to build reservoirs that give meaning to people when they say that they actually want to feel they have an ownership stake in their own economy in their own communities and indeed in overall society. That is why broadly speaking Labour is supportive of the refinement changes in this bill but we are not supportive of the other agenda which is to meander forward without a clear sense of direction in the absence of any compass that gives confidence to the next generation to the mokopuna—our grandchildren. 
When we listen to David Carter it is almost as if he contemplates a future where our country is one large farm and the Prime Minister contemplates a future where our country is one large hotel. Well that is not our view. We believe that in order to grow our wealth we need to deepen and broaden the diversity of the goods and services that we create. We cannot drive without a decent reservoir of savings capital that can be deployed to suit the agenda of New Zealanders rather than the agenda of nameless faceless international fund managers who do not care at all for the national interest of Aotearoa New Zealand. Their agenda quite rightly from their perspective is to find opportunities exploit them and grow the wealth of the funds that they hold. But if anyone tells me that we should embrace indiscriminately the portfolio theory of investment I will tell them to look at the actual record of many of those portfolio theorists over the last 5 years as we have watched international wealth and capital melt. That is why there is a key distinction here. 
I am sure that there is a desire amongst a host of our colleagues on the other side of the House to advance the savings debate but we differ. Our desire is to ensure that the savings are not all sent overseas but deployed to develop our own country and to develop endowments that create value. 
It is time that the current Government stopped trying to cadge the ideas of Dr Cullen and actually put forward a debatable point as to what its vision is. Labour’s vision is to continue to husband savings but to have them disproportionately deployed on issues at home and to create enterprises that actually build new firms and create more jobs. None of that has actually happened to date and that is a consequence of the current Government’s approach to economic growth and fiscal policy which is driven largely by panic-stricken reaction to the point that not even the business or the corporate community knows any longer what the Government stands for. 
On this side of the House in relation to the savings debate—and of course KiwiSaver is only one element of the savings debate but it is the most innovative—there will be no ambiguity and no vagueness as to where we stand. We support the bill but there is much unfinished business.