Norman Russel: New Zealand Superannuation and Retirement Income Amendment Bill — First ReadingText is incorporated into the Bound VolumeNorman Russel: New Zealand Superannuation and Retirement Income Amendment Bill — First Reading[Sitting date: 19 March 2014. Volume:697;Page:16811. Text is incorporated into the Bound Volume.]Dr RUSSEL NORMAN (Co-Leader—Green):I rise on behalf of the Green Party to speak to the New Zealand Superannuation and Retirement Income Amendment Bill. I think it is important to traverse briefly the history of the New Zealand Superannuation Fund. The New Zealand Superannuation Fund was established by the Clark-Cullen Government in order to basically prepay or to put some money aside to pay for part of the cost of superannuation for the baby boomers as they went through their older years when they would need support from the taxpayer in the form of superannuation. What this fund did effectively was take some of the surpluses that were generated during the 9 years of that Government from 1999 to 2008 and put them aside as savings on behalf of the people of New Zealand.It is important to note that the party currently in Government opposed every attempt to put money aside in order to pay for those future bills. The National Party at the time said the surpluses that were generated during those years should not be used to pay down debt or to put money aside to save for the future but rather should be given away as tax cuts. The current Prime Minister John Key and the current Minister of Finance Bill English are on the record as saying during those years that the surpluses that were generated in those three terms of Parliament from 1999 to 2008 should have been given away as tax cuts to upper-income earners rather than saved or put away in the form of the New Zealand Superannuation Fund. Of course the National Party was entirely wrong. It got it entirely wrong with regard to savings.It is a simple fact that the parties that are now in Opposition—the Greens New Zealand First and Labour—supported Budgets that enabled those moneys to be put aside. So even though the National members now pride themselves apparently on being fiscal conservatives in fact it is the exact opposite. The reality is the exact opposite of what is portrayed by the current Government.The party currently in Government is consistent on one thing which is that it wanted to give away money in tax cuts to the very upper end so it opposed putting away money in the New Zealand Superannuation Fund. It opposed paying down Government debt when it was in Opposition and now that it is in Government it runs very large deficits and has built up $50 billion - plus of Government debt. So National has been very consistent all through those 15 years in wanting more debt to go on the taxpayer and bigger tax cuts for upper-income earners. That has been its consistent position.It should also be said that even though the Green Party supports the New Zealand Superannuation Fund we do not support this bill. We do not support this bill fundamentally because what this bill does is give the New Zealand Superannuation Fund more flexibility to invest in maximised returns through the use of fund investment vehicles. Fund investment vehicles will enable the greater use of tax havens for tax efficiency. The Green Party takes the view and has consistently taken the view that it is the use of tax havens internationally that has undermined the ability of Governments around the world to raise the taxes they need to pay for the things we all value. Public health public education and all the other good things that Governments deliver do not come free. Someone has to pay for them.What we have seen is that taxes have increasingly fallen on working people and the ability of the Government to enforce taxes on large multinational corporations has increasingly declined. It has become harder and harder for Governments to force multinational corporations to pay their taxes. So for example we have seen some very famous cases recently with regard to Google and Facebook where they are able to avoid paying their taxes through the use of tax havens. Unfortunately what this bill does is enable the New Zealand Superannuation Fund to avail itself of the use of tax havens more than it does currently and for that reason the Green Party will not be supporting this bill.It seems to us that a Government fund like this—a sovereign wealth fund—should be setting an example. Rather than undermining it should be setting an example that shows that it obeys tax laws and pays its taxes and does not use tax avoidance measures such as are enabled by this bill in order to avoid paying its taxes.If sovereign wealth funds like the New Zealand Superannuation Fund use these kinds of fund investment vehicles in order to avoid paying taxes it then makes it very difficult for Governments to go to large multinationals like Google and Facebook and say to them: “We want you to stop using tax havens to avoid paying your share of taxes.” We know that when the large multinationals like Google Facebook and all the rest avoid paying their taxes it is ordinary working people who end up having to pay more tax in order to fund the things we all want—those things like public health and public education. Tax as they say is the price of living in a civilised society. So if we want large multinationals to pay their fair share it seems to me counter-intuitive that we would pass legislation that essentially facilitates a sovereign wealth fund—our very own New Zealand sovereign wealth fund the New Zealand Superannuation Fund—to use tax havens and for that reason we will not be supporting the bill.I would also say with regard to the New Zealand Superannuation Fund that there are some very interesting opportunities opening up for the New Zealand Superannuation Fund in forestry in New Zealand. The New Zealand Superannuation Fund has become a large player in the New Zealand forestry sector and it is one of the strategic objectives of the Green Party—and also I know of the Labour Party—to have more value-add within the forestry sector. So having the New Zealand Superannuation Fund as a big player in the New Zealand forestry sector I think provides real opportunities for a new Government—as we are going to get on 20 September—to partner with the sector in order to work together to get value-add within the forestry sector.Instead of simply exporting all our logs as raw logs which is the current Government strategy we believe that you can partner between the Government and the forestry sector. So having the Superannuation Fund engaged in the forestry sector on a large scale is I think a great strategic opportunity for New Zealand to work together to get much greater value-add within the forestry sector. I would also note the role of iwi organisations who are also major players in the forestry sector now. So I think there is a very optimistic future where we could see a partnership between a new Government focused on New Zealand’s strategic opportunities working with the Superannuation Fund as a big owner of forestry and iwi forestry owners to add value within the forestry sector.I would also note that with regard to retirement income which is the other part of the title of this bill the Green Party’s Solar Homes project is of course a very important part of retirement income. We know that many New Zealanders approaching the age of entitlement for New Zealand superannuation—65—are very interested in investing in solar photovoltaic panels in order to basically give them some protection against ever-rising electricity costs. We have seen that under this Government electricity prices have increased by 20 percent in 5½ years so what we have seen from a lot of older New Zealanders who are approaching the age of entitlement for New Zealand superannuation—65—is that they want to provide themselves with some kind of protection against the ever-rising electricity prices that came out of the failed Max Bradford electricity model. So that is why the Greens’ Solar Homes project is all about providing some kind of support for New Zealanders particularly those in that situation as they enter their post-65 years and want to protect their retirement income.In terms of retirement income I would also note that for a lot of New Zealanders owning their own home is a very important part of that. If you own your own home you are in a much stronger position post your 65th year. If you own your own home you are in a much stronger position than if you are still in the rental market. It is with some alarm that the Green Party has noticed the rapid decline in homeownership rates in New Zealand which has been driven by the ever-escalating increase in prices. Of course that increase in prices has been driven by the fact that we do not have a capital gains tax excluding the family home. We do not have a capital gains tax on investment properties in New Zealand. It is also being driven by the very high level of foreign interest in the New Zealand housing market. At least 12 percent of the Auckland demand side is now coming from offshore and no doubt it is probably actually double that—much higher than that. That is driving prices out of the reach of ordinary people.The result of that is that ordinary working people are struggling to be able to afford to buy their own homes. As they approach retirement—and this is going to happen further down the track—more and more people will find themselves not owning their own home and that puts them in a more vulnerable position. That is why the Green Party and others have been supporting proposals to make housing more affordable. It is so that ordinary New Zealanders who are not millionaires like many in the National Party but are just people who make a contribution and work for a living can afford to buy a home and their families can afford to buy a home.We need to make sure that housing is once again within the reach of working New Zealanders so that is part of protecting the retirement income of New Zealanders. It is making sure that homeownership once more becomes affordable for New Zealanders and that electricity is affordable for New Zealanders and I think it is very important that we deal with the tax havens so that it is not middle New Zealand that has to pay all the taxes but multinational corporations pay their share as well. Thank you.