Shanks Katrina: Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill — In Committee 
Shanks Katrina: Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill — In Committee 
[Volume:644;Page:13727] 
KATRINA SHANKS (National) 
: 
 It is my pleasure to speak to Part 3 and I will address the KiwiSaver aspect of this bill. I would like to talk firstly about the uneven playing field out there. With this legislation I would not like to be an employer or an employee because the playing field has become really uneven. When an employer goes along and offers KiwiSaver to its employees that is all very good but the reality is that not everybody will take it up. Employers may be offering this scheme to encourage their employees to work and save which is absolutely great but under this scheme employers are also contributing up to 4 percent going forward. An employer is giving one employee who is taking up the scheme 4 percent and another employee who has not taken up the scheme is not getting that 4 percent. 
The Government says that is fine because the employer can negotiate with its staff according to who has taken up the scheme and who has not. But at the end of the day somebody may leave the scheme because he or she is in financial hardship and needs to have a respite from it so he or she will lose that 4 percent or an employee may decide to enter the scheme after he or she has been through a wage negotiation round and that employee has every right to enter that scheme. But all of a sudden the employer’s payroll is changing. It cannot predict what the payroll will do from month to month so it is up to the discretion of the employees as to what they will do. 
The great thing we have had in the past with salaries and wages is that they have been pretty transparent. When someone goes in and earns $20 an hour that person actually earns $20 an hour. The person beside that employee who earns $20 an hour earns $20 an hour as well and that is the way it is. I thought that we brought in the fringe benefit tax a few years ago to keep that situation transparent. To keep things even those people who got benefits like cars and perks relating to their work would put in a fringe benefit tax and they would be taxed at a higher rate. There was a disincentive so that people got a dollar value for the work they did. In that way we could even out that playing field and there would be a bit more transparency. 
Now in the workplace we still have the fringe benefit tax to keep that transparency but we also have Working for Families which complicates that situation. We can now have a situation where two people are working beside each other and doing exactly the same job. One person is getting Working for Families and is getting a little more. That person is still doing that same job but is getting a little more. That person could also decide to go into KiwiSaver and could again get a little more. All of a sudden a gap is created and it is growing between two people who are doing exactly the same job. One is getting KiwiSaver and Working for Families and the other is not getting those payments but is doing the same job and the gap is growing. It also works in the reverse which is quite complicated. One person who is getting Working for Families might not want to go into the next income level because that would affect the Working for Families payments and the other person is not getting Working for Families and might take that promotion because it does not affect the income that the person is bringing home. By the time we put KiwiSaver into that mix as well it all gets really murky. 
Where is the transparency in the workplace when employers go into negotiations with their employees? We are creating complexity in the workplace. I would ask how employers are meant to act in good faith with their employees all the time which is what we ask them to do under our labour legislation when there is a moving feast in front of them. What employers want to do is to reward and pay people an amount of money for the work they do but how can they do that when there is shifting ground underneath those employees all the time? Employers cannot do that. 
I think we will find that going forward a lot of court cases will show that employers are not being fair when in fact they are trying to be very fair but the rules they have been given create this changing ground underneath them. I would ask how an employee who cannot afford to go into KiwiSaver might feel working beside somebody else who can afford to go into the scheme and who is getting a 4 percent bonus to go into KiwiSaver. The first employee cannot afford to go into KiwiSaver and has not gone into the scheme so he or she is not benefiting from it. How do those people in the workforce feel? We have to ask ourselves whether we have given employers and employees a fair playing field now.