Clark David: KiwiSaver Budget Measures Bill — First Reading Second Reading In Committee Third ReadingText is incorporated into the Bound VolumeClark David: KiwiSaver Budget Measures Bill — First Reading Second Reading In Committee Third Reading[Sitting date: 21 May 2015. Volume:705;Page:3812. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North):I am very glad to speak to this bill because we are firm in opposing it. We believe that this is a bill that is stealing from the future of New Zealand. We heard David Shearer in the previous contribution read out something from the Financial Services Council that talked about robbing the kids’ piggybank to go down to the pub to buy a beer. That is the organisation that Jenny Shipley chairs. That is an organisation that is independent of this House and it can see clearly that this bill steals from the future.My first suggested amendment is of course to the title. I think that this bill should be called the “Stolen Futures Bill” because it is a bill that is stealing from future generations. In New Zealand we have a capital issue. We have had a capital issue for a long time. Treasury in the 1970s had somebody sitting at a desk trying to work out how to ensure that we had more savings. It still has people sitting at desks trying to work out how we can get more savings. Here we have the Government in a panicked measure—in a panicked measure—trying to balance the books because it has broken another election promise. It was the No. 1 election promise in all of National’s pamphlets—“We will get to surplus in the next Budget”. It is a broken promise.Those members are trying to patch that over. They are trying to make it look not too bad but actually there is a billion dollars’ difference between how things looked last Budget and how things look now—a billion-dollar black hole has opened. Their way of getting there is not by reversing any of the early tax cuts they made when they gave the top 10 percent 40 percent of the value of the tax cuts. No they did not consider doing that. What they said they would do is take out of the hands of future generations out of the hands of children a $1000 KiwiSaver kick-starter. That is what constitutes vision now from this Government. That is what constitutes vision. That is the big idea in the Budget—“Let’s take 1000 bucks off the kids.”Well that is shameful. That is no future. That is a “Stolen Futures Bill”. It is not a bill that should simply be called the KiwiSaver Budget Measures Bill. That is an Orwellian description of what is going on here. We know that this is National hitting the panic button saying that it has failed to get to surplus for the seventh time in a row—in contrast to Labour’s nine surpluses in a row—and with that it is taking from the pockets of children. As I have said the Financial Services Council is saying that this is money taken out of kids’ piggybanks to buy beer at the pub. Well that is a pretty clear picture. That is the stolen future. That is what it looks like for Kiwi children and for Kiwi workers.Australia which does have a decent savings set-up for retirement has got $1.3 trillion in the bank. That money is waiting for small-business people to come along and invest to build the economy. In New Zealand if Muldoon had not shut down a similar scheme we would have had hundreds of billions of dollars. National Governments before this one have lacked vision and this one is in the pattern—this one is in the pattern. That is why we are opposing this bill. It should be called the “Stolen Futures Bill”.I want to also suggest that it could be called the “Robbing Peter to Pay Paul Bill”. In this Budget the Government has brought in some measures to help those who are at the hardest end of things. Of course the Government made some big cuts in the 1990s and this in real terms certainly will not compensate for those. The Government has done some good in the Budget and we want to acknowledge that but we do not think that that good stuff should happen at the expense of those who are just a couple of rungs further up the ladder—those who are working hard struggling to get ahead and having money taken out of their pockets so that this Government can get to an imaginary surplus which it will never get to if it does not have a vision. It will never actually get there if it does not have a vision.The Government is reliant on commodity price cycles. It has failed to diversify the economy. It has failed to get to the target of 40 percent of exports which it set for itself. Exports are now below 30 percent and they are dropping. They have dropped from last year and are projected to drop further in the year ahead. That is because the economy as it stands currently is built on immigration and the money flowing in for the earthquake recovery. That is not the way to build an economy. Successful economies overseas have diversified. They have not robbed Peter to pay Paul. They have not taken money out of kids’ pockets. They have not taken money out of hard-working New Zealanders’ pockets in order to try to achieve an imaginary surplus.The third title that I want to suggest might be more appropriate is the “No Vision Bill”. The reason I think the title “No Vision Bill” is appropriate is that that is exactly what this bill shows. This bill shows no vision. This is a Government that has no plan. It has panicked. If we needed any evidence of that we could turn to the regulatory impact statement prepared by Treasury. Paragraph 1 says: “This regulatory impact statement has been prepared by the Treasury in consultation with Inland Revenue.”; paragraph 2 says: “The advice was requested in advance of Budget 2015 and therefore has been prepared urgently.”—urgently. This was a quick fix because the Government was out of pocket; it was heading for deficit again. The Government did not even get to surplus but it thought it would have a go at robbing the pockets of hard-working New Zealanders middle New Zealanders in order to try to get close. Well the Government has got egg on its face.Then if we skip down to paragraph 4 we see: “The analysis has not focussed on the effect of policy options on national saving as was the case with the KiwiSaver policy changes announced with Budget 2011.” The Government was short of time. It could not even assess what the impact of this was going to be. That is also stressed in paragraph 5 of the five paragraphs on the front page of the regulatory impact statement where it says: “There has been only limited consultation because of Budget sensitivity and a likely behavioural response.” Treasury understands that incentives matter. This Government does not seem to get that. It claims to be economically literate yet it does not even understand the advice provided by Treasury which says that if there is no incentive people will not sign up.If we needed a clearer example of that it is provided in the Inland Revenue Department’s final summary evaluation conducted over 7 years of the scheme—over 7 years. It is estimated that this scheme has caused additional savings of 36 percent. That is 36 percent of savings in New Zealand that would not have happened otherwise. KiwiSaver has initiated a savings culture and that is thanks to the Labour Government’s vision back when the scheme was started. Thank you Dr Cullen is what members should be saying from those benches opposite—thank you Dr Cullen. The reasons New Zealand has savings are of course the Cullen fund and KiwiSaver. All that these people can do is chop KiwiSaver. They have made eight cuts to KiwiSaver. It is a Budget of no vision and this is a bill of no vision. It should be called the “No Vision Bill” or as I suggested earlier the “Stolen Future Bill” or the “Robbing Peter to Pay Paul Bill”. There are many other names more suitable than the name the bill has been allocated.I want to ask members opposite to examine their consciences. I wonder how many of them took the $1000. I wonder how many of them took the $1000 for their KiwiSaver schemes—how many took the kick-starter—and how many of them are now going to have constituents coming through their doors saying: “How come it was good enough for you? How come MPs how come Ministers how come National Government it was good enough for you to take the $1000 kick-starter and then pull the rug out?”.We know that in the next 4 years half a million Kiwis will miss out on this $1000 kick-starter. Many of them will be on low wages. Many of them will be in their first jobs. They will be on $15 an hour working part-time because $1 an hour counts as being employed under this Government. They will be saving $2 a week if they are lucky. A thousand bucks in your bank account is a good incentive. When you go up to $1002 or $1004—it may sound meagre to those National members but a thousand bucks is really a lot of money to people who are struggling to get by and who want to start thinking about their retirement. Starting out with two bucks in your account or four bucks in your account is pretty demoralising.These guys are prepared to take that away. They are prepared to say they are going to rob Peter to pay Paul. They are prepared to give up and admit they have got no vision for New Zealand’s future. They are taking money from those who are just one or two rungs up the ladder in order to try to look like they are doing something for the hard end of town. But they made the cuts in the 1990s. They are the ones who actually caused the issues they are trying to cover over now.We wonder whether the Government will ever get to surplus. It probably will eventually—it probably will eventually—but not through any vision of its own. The Government has made promises to get there sooner. It has so mismanaged the economy. It has failed to diversify in the good times it has failed to promote new business opportunities and here once again the Government is depriving the country of the opportunity to save and to have capital depth and to encourage businesses so that businesses can access capital in those big KiwiSaver funds to promote New Zealand’s economy. The Government does not seem to have a vision for the economy. All it is focused on is breaking promises. John Key said: “We won’t put GST up.” It has gone up to 15 percent. “We will get exports to 40 percent.”—that has not been done. “Pushing out the $7000 wage increase for employees”—the Government is breaking promises.