Foss Craig: Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill — In Committee 
Foss Craig: Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill — In Committee 
[Volume:644;Page:13728] 
CRAIG FOSS (National—Tukituki) 
: 
 I speak now to Part 3 which deals with changes to various other Acts and regulations. First of all a previous speaker Mr Gordon Copeland mentioned the mortgage diversion part of the general KiwiSaver scheme which is alluded to in I think Supplementary Order Paper 168 and in this part. Gordon Copeland is no longer on the Finance and Expenditure Committee since he went out on his own and I think it is important to note that pretty much after he left there has been virtually no discussion whatsoever no lobbying for and no sponsoring of the mortgage diversion facility or that part of KiwiSaver. In fact commentary has been very very silent because most commentators believe that yes it is a worthy goal or worthy ambition to have some facility like that but it does not sit very tidily at all within KiwiSaver—a long-term retirement savings scheme—to have as part of that same suite of bills a system that assists and encourages people to borrow money. 
I note that even the monetary policy inquiry we had which touched on all things KiwiSaver shied away from the mortgage diversion part of KiwiSaver. There is obviously a reluctance to take that part out but I imagine the Minister’s preference would be to take it out—perhaps to carve it out and let it form some part of other legislation. I do not think that is such a bad idea and the National Party would welcome such discussions firstly to simplify the KiwiSaver legislation and secondly to make a more pure and transparent method to homeownership. Further to that even the Council of Trade Unions did not comment on the mortgage diversion part of it but it did note how unaffordable New Zealand housing is. It was not talking about the debt of the mortgage; it was talking about the ability to fund a mortgage or to get a deposit for a first home. The council lamented how badly New Zealand wages had fallen behind Australia’s. The head of the Engineering Printing and Manufacturing Union Andrew Little before our committee on other business recently also noted that. He used the example of how in New Zealand an electrician could get between $70000 and $85000 a year while over in Australia the same electrician was on A$120000 to A$130000. He agreed as part of his submission about some other matters before the committee that that attraction was pretty hard to resist. 
I think it was Mr Tremain and Katrina Shanks who earlier touched on the contributions around KiwiSaver. That issue is alluded to in this part but is not hugely addressed. It is more about home affordability and KiwiSaver will struggle because—remember—it is 4 percent of gross not 4 percent of those moneys left which is about 5.5 percent or 6 percent of net. Quite frankly when people are saving towards KiwiSaver over time their annual return after tax will be about 3-ish percent I guess and their mortgages will be at 8 percent to 10 percent. Why on earth would they save towards KiwiSaver whilst they still had a mortgage? That is the contradiction that the mortgage diversion part starts in this bill. 
I will just touch on the amendments to clause 284 set out on Supplementary Order Paper 168. It defines certain disposals by portfolio investment entities or by the New Zealand Superannuation Fund. I would like to mention that New Zealand is heading towards some dangerous territory here. Admittedly it was not a portfolio investment entity or the New Zealand Superannuation Fund although they have been doing this; it was the Earthquake and War Damage Fund I believe which divested from tobacco stocks thinking that Dr Cullen wanted it to divest from those and believing that he would be pleased and happy for it to do so. Now that is a debate that we should have for sure but Ministers of Finance Ministers of the Crown and any members of Parliament of course must be at total arm’s length from any funds that the Crown owns and from any way that their influence could even be misconstrued. Be they for moral or ethical reasons if it is set up in the deed of those funds then they should be left alone. 
I also seek the Minister’s opinion and advice on the amendments to clause 263B set out on Supplementary Order Paper 168. I would welcome it if he could explain to us the issues around the Health (Drinking Water) Amendment Act 2007 which is included in the Supplementary Order Paper—or perhaps someone from the various health portfolios would like to participate on that one.