Douglas Roger: Social Assistance (Payment of New Zealand Superannuation and Veteran’s Pension Overseas) Amendment Bill — Second Reading In Committee 
Text is incorporated into the Bound Volume 
Douglas Roger: Social Assistance (Payment of New Zealand Superannuation and Veteran’s Pension Overseas) Amendment Bill — Second Reading In Committee 
[Sitting date: 20 October 2009. Volume:658;Page:7290. Text is incorporated into the Bound Volume.] 
Hon Sir ROGER DOUGLAS (ACT) 
: 
 Although I could support the principles that lie behind the Social Assistance (Payment of New Zealand Superannuation and Veteran’s Pension Overseas) Amendment Bill one can describe the bill as having a number of faulty details. In fact I would go so far as to say I have grave doubts about the fairness and equity of this bill and the way it treats different New Zealanders. 
It treats different New Zealanders in a number of ways. The bill creates a number of secondary effects that have not been taken into account and in large part aspects of the bill have been driven by the Ministry of Foreign Affairs and Trade as a de facto form of foreign aid. That I think is to be regretted. 
Maybe I can illustrate the point that I want to make with a graph. Members may not be able to see it but there are three different areas— 
Chris Hipkins 
: Well we can’t see it if you don’t hold it up. 
Hon Sir ROGER DOUGLAS 
: I will hold it up in a moment when I get to the point I am illustrating. 
Firstly there are New Zealanders who wish to retire to places with which we already have an international agreement. Up to today this group of people theoretically have actually been advantaged. This bill does nothing for that group. They remain where they are. In fact many New Zealanders who go to Australia for example—because that is where their children have gone to live and work—having worked here for 47 years might find themselves in the position of actually getting zero because they have to comply with the Australian rules and the Australian rules mean that they are means-tested. 
This graph plots the number of years worked against the percentage of New Zealand superannuation one would receive. If I look at the graph I see that if I go to Australia or any of the countries that we currently have an agreement with I could get zero or I could be anywhere between zero and this red line which represents superannuation in non-Pacific countries. If I go to any other country apart from the 22 Pacific Island countries I will be on the red line. On the other hand if I go to live in one of the 22 Pacific Island countries—it does not matter whether I am a Pacific Islander; I could be an American who has been here for 10 or 20 years—I will be on the blue line which beyond the 10-year mark is higher than the red line. The gap between the red line and the blue line is the advantage—the extra I would get. So if I am an American who has come here to live for 10 or 20 years as long as I say that I will retire in one of the Pacific Islands I can go on to that top line of the graph. 
I will tell members about one of the unintended consequences of the bill. Pacific Island people who can come to New Zealand for 10 or 20 years would be absolutely mad not to do just that. The return for the 10 or 20 years is huge. One of the unintended consequences of this bill is that we are saying to Pacific Island people that in their best working years they should come to New Zealand. It will get Pacific Island people and others to come here for 10 or 20 years in order to get the benefits of this pension. In their best working years they will not be contributing in the Islands; they will be contributing elsewhere. To me that is preferential treatment. 
The fact is that it was driven as I understand it by the Ministry of Foreign Affairs and Trade as a de facto form of foreign aid. It seems odd to use a policy instrument as blunt as superannuation as a mechanism to deliver aid to the Pacific Islands. Cash handouts to particular demographic groups of society could hardly be considered to be an effective aid programme. It may be that that is what we intend to do. It may be that we are happy for someone to come from a foreign country let us say America spend 10 or 20 years here and then be able to retire on in some cases a 100 percent pension provided the place of residence is in one of the 22 Pacific Islands. It seems to me to be odd that New Zealanders who have lived here for 65 years worked for 47 of those years and gone to live in Australia get nothing because they have an income beyond $39000 but others who come here and spend as little as 10 years here can get 50 percent of the pension. 
I do not think this bill has been carefully thought out. It will create anomalies. More particularly I believe it will have some secondary effects that will not be helpful to the Pacific Islands. I know the intention was that it would be helpful so that Pacific Islanders in particular could return so that the Islands would benefit. But the fact is that this bill will say to people that if they come here for 10 years they will get a substantial pension and that if they stay for 20 years they will get an even bigger pension. We are saying to Pacific Islanders that if they come here they will get a pension of 5 percent per year provided they do the minimum 10 years. As for New Zealanders they can work for 47 or 45 years and get 2.25 percent per year but if they go to Australia or one of those countries that we have an arrangement with it may well be that they get nothing. Personally I do not think there is much fairness in that.