Robertson Grant: Taxation (Transformation: First Phase Simplification and Other Measures) Bill — In CommitteeText is incorporated into the Bound VolumeRobertson Grant: Taxation (Transformation: First Phase Simplification and Other Measures) Bill — In Committee[Sitting date: 24 May 2016. Volume:714;Page:11159. Text is incorporated into the Bound Volume.]GRANT ROBERTSON (Labour—Wellington Central): This is the first go on this part so we will make sure we keep counting this time. I do not actually have many things to raise in Part 3 of the bill but I do want to discuss the clauses relating to KiwiSaver and in particular clauses 205 to 211 which relate to minors—that is younger people as opposed to those down coalmines—opting out of the KiwiSaver scheme. The bill proposes a new provision that would allow minors who have been incorrectly enrolled into KiwiSaver to opt out before their 19th birthday. This would as the officials told us provide some protection to minors who may not know they have been enrolled and want to exit the scheme. Members who opt out of KiwiSaver under this new provision will have the contributions they have made returned to them their Government contributions will be returned to the Crown and their compulsory employer contributions will be returned to their employer.Members of the committee asked officials how widespread this problem was because we did find it a little curious that we were coming to Parliament to debate perhaps this rush of young people being enrolled in KiwiSaver by parents over-eager to get them in when they genuinely did not want to be or felt it had happened in an incorrect manner. Officials assured us this was not an enormously widespread problem but there was a need to provide a provision for KiwiSaver members to do that. So new section 59CB inserted by clause 210 will allow members who have been incorrectly enrolled in KiwiSaver when they were minors to opt out up until their 19th birthday. They have to meet these criteria: they are aged under 16 and they have the consent of one of their guardians or they are acting under their own authority between 17 and 19 years of age.I really do want to make a couple of points here. The first is that I do not think it is desirable to be promoting in any way the withdrawal from KiwiSaver of people who have been enrolled under the age of 18. The Government has withdrawn the kick-start payment which was a very attractive reason for a lot of people to be enrolled before they reached the age of 18. I think that is a pity and a shame and I think it undermines some of the improvements to the savings culture that have been developed as KiwiSaver has gone on. But we do accept that there may be situations where people feel the need to do this. I think it is important to make that point.I am still a little bewildered about the extent of this and why it has come to the Committee in this way. Minors are only able to join KiwiSaver by directly contracting with a KiwiSaver provider obviously as they will not necessarily have an employer and the providers have the ability to receive and review parental consent. That all should actually be happening. This is to try to cover a situation where for some reason a provider has decided that it is just going to accept someone coming in as a minor and signing up for KiwiSaver. The officials eventually said to us—and they say it in the commentary on the bill—“To date Inland Revenue has not received any complaints from minors who have been incorrectly enrolled into KiwiSaver through their employers.” That would be none enrolled through their employers.So I think the extent of this problem is very limited but I guess it is a good thing to ensure that people under the age of 18 particularly are not exploited. The reason the clause goes up to 19 years of age which we did discuss is to give time for KiwiSaver members once they have reached 18 years of age and are in a position to be advocating on their own behalf to be able to get out of the scheme should they wish to.As I say it is not a clause that I think we would like to see used very often but it is conceivable people will find their way through either a rogue KiwiSaver scheme a rogue parent or a rogue employer—although there are not any who have done that. It would seem an odd clause but I thought it was worth noting that it is now possible under this section of the bill.When the bill came before the Finance and Expenditure Committee we did consider that the wording of the bill appeared to treat an automatic enrolment as a mistake and only if there was a failure to meet all of those criteria that I mentioned before rather than one of them and so the committee altered the bill under clause 207 to ensure that if any of those criteria were failed then the person who had been incorrectly enrolled had the ability to withdraw from the scheme. Unless the Minister of Revenue wants to clarify the extent of the thousands of young people writing to him with deep concern about their automatic enrolment in KiwiSaver we are happy to support the clause.