Cunliffe David: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeCunliffe David: Questions for Oral Answer — Questions to Ministers[Sitting date: 17 June 2014. Volume:699;Page:18522. Text is incorporated into the Bound Volume.]2.Hon DAVID CUNLIFFE (Leader of the Opposition)to the Prime Minister: Does he stand by his statement relating to an increased level of household saving that it “is a necessary foundation for more sustainable growth in the medium and longer terms”?Hon BILL ENGLISH (Acting Prime Minister):Yes which is why the Government welcomes the recent improvements in household savings. For example in the 5 years to 2008 household savings averaged minus 4.5 percent and they slumped to minus 7.6 percent in 2003—the worst on record in the history of that series. Under the current Government household saving has average minus 0.2 percent. Higher household saving and improvement in the Government’s books has helped reduce the current account deficit to 3.4 percent of GDP—a significant improvement on the current account deficit when Labour left office of 7.9 percent.Hon David Cunliffe: Since the Prime Minister is so keen on past Governments does he agree that it was a mistake for National to abolish the compulsory savings scheme in 1975—Hon Member: How old were you?Hon David Cunliffe: Well how long is a piece of string? [Interruption]Mr SPEAKER: Order! The member has a right to ask the question and I will judge the Government responsibility.Hon David Cunliffe: —given that the Financial Services Council has estimated that New Zealand has now forgone $278 billion in savings as a result of that short-sighted National Government decision?Hon BILL ENGLISH: If we are talking about mistakes of the 1970s one that Labour made was to make Bill Rowling the leader of the Labour Party—and that member will be finding out what he felt like. No I disagree with the Financial Services Council. I think its calculations are nonsense and we also disagree with Labour’s policy of making KiwiSaver compulsory because it will have to explain to hundreds of thousands of low-income New Zealanders—Mr SPEAKER: Order! That was not the question that was asked.Hon David Cunliffe: Is he aware that after 25 years of compulsory savings Australia has built up a savings nest egg of no less than $1.3 trillion and why does he not think Kiwis should have a similar pool of capital for investment and their futures?Hon BILL ENGLISH: Because the member is using a very partial measure of the Australian economy. Economists all agree that the best measure of our savings-investment imbalance is the current account deficit. Since the Australians brought in their compulsory superannuation scheme New Zealand has on average had a smaller current account deficit than the rest of the world—that is a smaller deficit on domestic savings to fund its investment. There is nothing magic about the Australian compulsory superannuation scheme. In another measure New Zealanders have more money invested in businesses but they do have less in the products sold by the Financial Services Council.Hon David Cunliffe: Speaking of the current account deficit does the Prime Minister accept that Australia’s large compulsory savings pool has enabled it to own its own banks and nearly all of ours?Mr SPEAKER: The Hon Bill English insofar as there is ministerial responsibility.Hon BILL ENGLISH: There is no doubt it has meant that its stock market is a bigger proportion of its economy. As it happens in New Zealand family and cooperative businesses are a much bigger proportion of our economy and we think that is a quite legitimate form of savings and investment. In any case Labour will spend the next 3 months promising carve-outs from its compulsory scheme which will compel hundreds and thousands of the poorest New Zealanders to give up 9 percent of their income when they cannot afford to give up any.Hon David Cunliffe: Given that the Prime Minister is so concerned about the current account deficit and given that 85 percent of New Zealand’s national debt is private debt why is he not prepared to support a policy that will grow private savings shrink private debt and reduce the current account deficit?Hon BILL ENGLISH: Because it will not do any of those things—that is why. There are already 2.3 million New Zealanders in KiwiSaver. The member should take some of the credit for the success of KiwiSaver because his Government introduced it and people are still joining it at the rate of 15000 per month. The people who are not in KiwiSaver generally cannot afford to be in it. I invite the Labour Party to explain to hundreds of thousands of low-income New Zealanders why it is effectively going to take 9 percent of their income off them when they are living from week to week on very small margins.Hon David Cunliffe: Given that the Prime Minister’s party opposed KiwiSaver when Labour introduced it and now supports it and given the crocodile tears the Acting Prime Minister has just cried about low-income New Zealanders will the Minister of Finance and the Prime Minister both stand up and agree with us that the minimum wage should be raised as soon as possible to $15 an hour and if he does not would he like to explain to New Zealanders why he wants to keep their wages down and their savings down and their banks owned—Mr SPEAKER: Order! This is question time not the general debate.Hon BILL ENGLISH: No and the member is trying to tell people that low-income New Zealanders who will be hit by a 9 percent cut in their income will not worry about it because they can get a small percentage increase in the minimum wage. Actually most of them are not on the minimum wage. They have low incomes because they are seasonal workers casual workers or not working at all. The member will spend the next 3 months backtracking from his position of compulsory KiwiSaver—you just watch.