Ardern Jacinda: Taxation (Annual Rates and Budget Measures) Bill — In Committee Third Reading 
Ardern Jacinda: Taxation (Annual Rates and Budget Measures) Bill — In Committee Third Reading 
[Volume:672;Page:18961] 
JACINDA ARDERN (Labour) 
: 
 It is a pleasure to rise and give a contribution on Part 2 of the Taxation (Annual Rates and Budget Measures) Bill which as my colleague Grant Robertson has pointed out focuses on the changes to Working for Families and KiwiSaver. I will home in specifically on KiwiSaver. 
In light of the fact that members on both sides of House acknowledge that we have a significant issue when it comes to Kiwis’ own personal savings rates it seems phenomenal to me that this is the third change I have seen in this House relating to superannuation schemes and our preparedness for future generations’ retirement. Members will remember that the first change was to the New Zealand Superannuation Fund. For my first Budget I sat in this Chamber and watched as the Government claimed that out of necessity it would suspend payments to the Superannuation Fund. Our preparation for my generation’s retirement would be suspended not for 1 year or 2 years but for 10 years. For 10 years we were going to look entirely past the issue of our superannuation preparedness despite knowing that we would be paying for the baby boomers in the very near future. Those on this side of the House have watched as there have been changes to the one thing in the Government books that looked quite good which was the Superannuation Fund. Members will note that I am no longer calling it the Cullen fund. Michael Cullen has specifically requested that if the Government will not fulfil its obligations to pay into that fund then it should hereby be known as the English fund. The Cullen fund was about being prepared; the English fund is about suspending responsibilities. 
The second change we have seen to our preparedness for superannuation is a cut to KiwiSaver contributions. Members on this side of the Chamber will remember that Labour specifically legislated that contributions by members of KiwiSaver and by employers would sit at 4 percent. In its first Budget the National Government immediately slashed that to 2 percent and we protested because we knew New Zealanders needed a high rate of savings if we were to be prepared for our retirement. 
Now we come to the third set of changes. I do not know whether the Government thinks it is a sneaky change and perhaps the public will be duped by it but almost in an attempt to cover up the fact that it has made changes to the Government contributions the Government has now lifted employer and member contributions by 1 percent. They are now back at 3 percent but that is still lower than it was when National was elected. 
Grant Robertson 
: A half-reversal. 
JACINDA ARDERN 
: That is absolutely right I say to Grant Robertson. I know that New Zealanders will not be tricked by that. They are much smarter than that and they will immediately see through it. Why has the Government lifted that rate again despite saying in the beginning that it needed to be halved? Because it wants to place an extra burden on employers and individual members in lieu of the Government picking up its responsibilities. That is exactly what has happened. In Part 2 the Government contributions have been halved. They have also been capped. The $1042 Government contribution amount of the potential tax credit has been replaced by $521. Why does that matter? We know that the three factors we need most if we are to have a stable personal savings scheme for Kiwis are incentive stability and income. We have seen three changes from this Government. That is not stability. 
Craig Foss 
: There was a change every year under the Labour Government. 
JACINDA ARDERN 
: I will point out that KiwiSaver was created by a Labour Government and it is one of the things we did that we are most proud of I say to Mr Foss. Labour acknowledged that my generation was about to be left high and dry and all the Government has done I say to Mr Foss is to prove that it has a short-term view when it comes to politics and electoral cycles. This measure is about the next election. It is not about my generation. If it was about my generation— 
The CHAIRPERSON (H V Ross Robertson) 
: I refer members of the Committee who do not have the call and are interjecting on each other to Speaker’s ruling 63/7. 
JACINDA ARDERN 
: Speaker’s ruling 63/7 is one of my personal favourites so thank you Mr Chairperson. I have already covered the incentive element. I will acknowledge that the Government has kept the $1000 kick-start and that was an important element of the scheme in terms of drawing people in to join KiwiSaver as 1.7 million people have done. I will highlight one extra statistic that has not been shared much in this Chamber and it is that 500000 of those members are under-24-year-olds. 
Hon Ruth Dyson 
: 500000? 
JACINDA ARDERN 
: Five hundred thousand—it is a significant amount. Whether some parents are enrolling their children very young is an interesting point and we may need to look into that but I applaud that figure. Ultimately this scheme was about making sure that young people in this country are preparing for their retirement so that incentive was important. 
We have covered the stability issue and the fact that there has been a real lack of acknowledgment on the other side of the Chamber of the importance of stability. I think members would be interested in an interview with a man who is an ex - All Black I believe and a national voter from Eltham. I understand that he said on the radio this morning that in his view the contract he had signed with the Government when he gave his vote to National had been broken. It was his view that the agreement that had existed on what would happen with his superannuation fund which he had signed up to because he believed that the Government would not honour its promise and ensure that a universal pension scheme would be available when he retired—so he had bought into KiwiSaver—had been broken. I would like to know how many other Kiwis feel exactly the same way. I wager that it will be many. The stability issue is a significant one and that is obviously what we are addressing in Part 2. 
But Part 2 specifically acknowledges the role of the employer’s superannuation cash contributions so I will talk about the third element of importance to a savings scheme and that is income. Of course an individual having an income stream is by default one of the most important parts of being able to ensure that we have some personal savings. I am sure that all of us in this Committee would acknowledge that if someone is in a state of unemployment even if they are drawing down Government support it is nigh on impossible to survive let alone save for their retirement. So income is important. That means that Part 2 is directly affected by the wider stimulus plan that the Government has presented. I use that term loosely because I am yet to see any wider stimulus package in this Budget yet the Government has estimated—it has forecasted—that we will see 170000 jobs as a consequence of this Budget. 
I wanted to give the Government the benefit of the doubt so I searched through the Budget documents including the Economic and Fiscal Outlook to try to find the source of those 170000 jobs—a fair quest I thought. I came across roughly three things. Higher growth in consumer spending was the first: “Higher growth in consumer spending is expected as households become more comfortable with the state of their own balance sheets …”. I would like to hear a little more background on that. I am not entirely sure how people will become more comfortable with the state of their balance sheets because I do not hear a lot of comfort now. If we are talking about consumer spending as a proportion of a household’s income that certainly is increasing as a percentage because the cost of living is increasing at a ridiculous rate in this country. Beyond that I really have very little other explanation for how people will be finding that extra comfort. 
Secondly the Economic and Fiscal Outlook states that we will see a boost in export volumes particularly service exports such as tourism. So the Rugby World Cup is one of the answers but I would have to say that it is unfortunate that it finishes in October. I also point out that that event is in the low-wage sector. I would say that putting all the eggs in the low-wage sector basket again is ill-advised. 
Then we come to what I think the Government is pinning all its hopes on which is the growth coming out of the Christchurch earthquake. It states: “We have assumed nationwide employment is around 15000 lower by mid-2011 as a result of the earthquake.” So 15000 fewer people will be in work. How many jobs has the Government predicted we will see out of the residential rebuild? 
Grant Robertson 
: 12500. 
JACINDA ARDERN 
: It has predicted 12500 so we will not even come back to the point at which we have been left as a consequence of the earthquake. In fact that is a deficit of around 500 jobs. I grant that that is only the residential rebuild. If we chuck on an extra couple of thousand jobs as a result of the wider rebuild we still are left with I predict a 168000 job deficit.