Tremain Chris: Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill — In Committee 
Tremain Chris: Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill — In Committee 
[Volume:644;Page:13726] 
CHRIS TREMAIN (National—Napier) 
: 
 Gordon Copeland has just spoken on the mortgage diversion scheme and on the part he played in bringing that to its inception. Although I certainly have empathy with his view of the level of homeownership in this country—and he is right; it has dropped significantly which is nothing for us to be proud of as a nation—I am not so convinced that the mortgage diversion scheme will be as successful as he makes out. 
It is an initiative yes but the reality is that other issues involved in getting people into their own home such as the cost of that housing need to be considered first. There is a lot of debate around once people are in properties where the full amount of their savings should be going. There is a lot of argument to say that the money should be going fully into the house. With the combination of higher interest rates and capital accretion that can be achieved through having our own home it can be argued that people are far better to have their money going entirely into the savings in those homes than going by a convoluted process through KiwiSaver with its added bureaucracy back into the home in another way. However it is an initiative and part of the scheme and we will be interested to see how the numbers work out when we go into July next year and see the effect then. 
I will focus on Part 3 of the Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill largely on the amendments to the KiwiSaver Act 2006. In my 5-minute slot this morning I will focus on three specific areas. The first I will deal with is the age of entitlements debate which was an area the Finance and Expenditure Committee had quite significant representation on. I will also talk about the salary sacrifice agreements and the position that employers such as the Christchurch City Council found themselves in. I will also touch on the transitional rates and the position we have got to in regard to those rates. 
I start with the age of entitlements. This was an issue that did not perplex the committee but that the committee gave some consideration to. It concerns the question of whether we should allow individuals under the age of 18 to obtain all the benefits of the KiwiSaver scheme. Many submissions were received from people from across the board and particularly from the unions who felt that the full benefits of the KiwiSaver scheme should apply to 16 and 17-year-olds. Both the National Distribution Union and the Council of Trade Unions were most vocal on this particular aspect of the legislation. The Council of Trade Unions the National Distribution Union and the New Zealand Nurses Organisation said that preventing young workers from gaining tax credits and employer contributions was somewhat discriminatory. 
The argument behind not providing the credits to 16 and 17-year-olds was that the Government felt that it would take away the focus on education and that 16 and 17-year-olds should remain in the education system. I take a different point of view in that I believe that some 16 and 17-year-olds out there are better off in the workforce. They have reached a point in time at that age when for one reason or another they have decided that they have reached the end of the road as far as school is concerned. But many of them go on into careers. They become young apprentices and take on jobs where their future is in doing the hard yards of being an employee and learning a trade. Sometimes their education blossoms for them as they take up an apprenticeship and learn many more skills through doing that. 
My argument is that we should be encouraging 16 and 17-year-olds to be saving as early as possible. In that regard I think it is good reasoning to allow 16 and 17-year-olds to take up that opportunity once they end up in employment. 
I understand the argument that by totally removing any age criteria we are allowing many families to take up these tax credits for very young children. It will be interesting to see how many take-ups of KiwiSaver there are by those under 20 which have been taken up by families getting their 5 6 and 7-year-olds into a savings scheme early on in their life. I think members will find that quite a significant number of families of high net worth are taking up that opportunity.