Rich Katherine: KiwiSaver Bill — In Committee 
Rich Katherine: KiwiSaver Bill — In Committee 
[Volume:633;Page:4905] 
KATHERINE RICH (National) 
: 
 I always enjoy the contributions from the previous speaker the Hon Doug Woolerton but I was a bit surprised to hear how excited he is about the mortgage diversion aspect of the bill because I understand that he voted against it at the select committee. Although Mr Woolerton might euphemistically call it a “wee surprise” it is a pretty major addition to the KiwiSaver scheme. 
I wonder what the addition of the mortgage diversion provision says about the parliamentary process whereby a select committee can work thoroughly on a bill seek submissions hear from the public then unanimously decide that such a provision is not a good addition to the bill—it votes on it it reports back and hello 2 weeks later it is slotted back in there. The Minister in the chair the Hon Lianne Dalziel might like to rise to her feet and explain to the Committee how that happened because it smacks of some arrogance to totally override the select committee and insert something into a bill that not just National members New Zealand First members or other members of the committee but also Labour members decided was not in the best interests of New Zealanders. 
When the Minister last spoke she talked about how this bill addresses the savings problem. We all know what the word “addresses” means in this Chamber. Day after day in question time a Minister can stand up and basically say “rhubarb” and we are told that that addresses the question. If we look at the purpose of this bill we see that it aims to increase the well-being and financial independence of individuals particularly in retirement. The purpose of the legislation is to encourage long-term savings but what we see in it does not necessarily deliver that. What we have seen from the Government is a lot of rhetoric and a lot of words but in our view what is delivered does not necessarily address the problem of long-term savings. That is why we are concerned about turning a savings account into something that is basically a cheque account whereby New Zealanders can take out money albeit to divert to their mortgage payments but none the less they have access to that money to divert to something else that is not about retirement. 
I think that is where the Government runs into difficulty in many cases because it mixes objectives. It seems to be combining homeownership objectives with retirement savings objectives and I think that is where this scheme potentially has an Achilles heel. Many New Zealanders will be able to buy their first home then they can sell that home and bang they have the funding in their pockets. 
Until we address the fundamental issue in this country that some people do not have the capacity to save or to put money away because they are overtaxed or for other reasons—they may not be earning enough—we will not move towards really addressing the long-term savings issue. Many people whom I have spoken to say: “Well yeah I would like to save a little bit more but I am paying for my kids’ school fees and I am paying for food on the table etc.” If those middle-income New Zealanders paid less tax they would have more to put away. 
In terms of the scheme that has been provided I would like to hear the Minister explain why she thinks it will contribute to long-term savings when in the first instance people can whip out that money as if it is a cheque account to put it into something totally different. That was never part of the scheme when the measure was first discussed. It was never part of the scheme when Michael Cullen first dreamt it up. It is something that has turned up in just the last 2 weeks which brings on all sorts of concerns about process. 
It also makes the members who sat on the Finance and Expenditure Committee wonder what they have been doing for months. Also the members of the public who put their hearts and souls into the submissions and came along to the committee were consulted on one part of the idea then hello the bill is totally different when it comes back into the House. I do not think that is good process. Sure we often have fine tuning but to make such a dramatic change to the KiwiSaver scheme requires a lot of explanation. It might be a cute idea that can be debated on the platform but will it work? We do not know whether it will work we have not heard from the public on that point.