KiwiSaver Budget Measures Bill — First Reading Second Reading In Committee Third ReadingText is incorporated into the Bound VolumeKiwiSaver Budget Measures Bill — First Reading Second Reading In Committee Third Reading[Sitting date: 21 May 2015. Volume:705;Page:3789. Text is incorporated into the Bound Volume.]Thursday 21 May 2015(continued on Saturday 23 May 2015)KiwiSaver Budget Measures BillFirst ReadingDebate resumed.The ASSISTANT SPEAKER (Hon Trevor Mallard): The House is resumed. When we were suspended last night we were debating the first reading of the KiwiSaver Budget Measures Bill. The Hon Ruth Dyson was speaking and she has 5 minutes and 30 seconds remaining to speak if she so wishes.Hon RUTH DYSON (Labour—Port Hills):I certainly do wish to continue the speech that was so rudely interrupted at midnight. It seems like just a couple of hours ago when the Hon Maurice Williamson was contributing so strongly to this debate. It is a sad day when the National Party rejoices in taking $1000 out of the pockets of hard-working New Zealanders particularly those people who have found it so hard to save and put aside money but know they should build up their KiwiSaver accounts so that they will have better financial security in their older days. The National Party members last night were making it very clear that they had no understanding at all of what it is like for people for whom $1000 is a target they would never be able to reach without the support of the Government. Those people are now seeing that money go away.I heard some National Party members yesterday talking about the $25 increase in benefits and how that would justify it. That is 40 weeks of benefit being lost by this bill this KiwiSaver Budget Measures Bill. It is not a one-off. It is not just a one-off with Bill English scrambling to try to get another surplus which he has again failed to reach. For the seventh year in a row there is no Budget surplus despite two election promises: the 2011 election promise of a Budget surplus this year and the 2014 election campaign promise of a Budget surplus this year. Those are two significant election campaign promises broken in this Budget yet again. This is a mean-spirited bill that takes away that $1000 for KiwiSaver savers.About half a million New Zealanders many of whom are young people just entering the workforce and about 70000 children will now miss out on getting that $1000 kick-start to KiwiSaver. What makes it even worse what makes it more unfair is that it is retrospective. It started from 2 o’clock on Budget day even though by the parliamentary calendar today is Budget day. Today is still Thursday. The rest of the world has actually moved on and for them it is Saturday. It is going to be a long Saturday for the National Party.Iain Lees-Galloway: When do the benefit increases kick in?Hon RUTH DYSON: That is a very good question from my colleague Iain Lees-Galloway MP for Palmerston North. The benefit increases do not start until 1 April next year but the KiwiSaver cuts that this bill is all about started from 2 o’clock on Thursday of the week that we have just ended.This is retrospective legislation being rammed through this Parliament all stages under urgency. I wonder why that is. Is it because there is some genuine urgency to this legislation? Is there a desperate need for this measure to be introduced? No. It is like all the other measures that are being put through under urgency. It is because none of the National Party members can front up to members of the public let alone their own constituents for those who are electorate MPs or for list MPs. They cannot front up to the people whom they deceived during the election campaign by not mentioning that they would take away the $1000 kick-start to KiwiSaver. Not once on the Ilam election campaign trail did Gerry Brownlee say: “We are going to take away your $1000 kick-start to your KiwiSaver account.” But he did say that next year’s Budget would be a surplus Budget just like he did in 2011.This has been a Budget of broken promises and of mean-spirited legislation including this one. It has been a scramble for Bill English to try to get to a Budget surplus and once again he has failed. If people had signed up to KiwiSaver at 1 o’clock on Thursday they would be getting the $1000 kick-start but if they had signed up at 2.30 on Thursday they will miss out.David Seymour took the cake last night. He said that that is what Budgets are about—you take from some people and give to others. It is depends whom you take from and why. Taking money from low-income middle-income and hard-working New Zealanders—the key trigger for them to have an incentive to be better savers than they were in the past has been taken away by the National Government. Where is that money going? It is really hard to say. There is no commitment to investment no commitment to our regions no commitment to employment and no commitment to a vision or a plan for the future. This is just a scramble of ideas in the Budget. It is mean-spirited legislation and unfair.This is a continuation of the watering-down and cuts that National has brought into the KiwiSaver scheme. This is the eighth cut to KiwiSaver since National was elected in 2008. There has been a series of cuts to KiwiSaver which was one of the biggest changes that we had to the savings culture in New Zealand. There is no money going into the New Zealand Superannuation Fund. KiwiSaver is the biggest saving incentive that we have had in New Zealand since the Bill Rowling scheme which National cut as well actually in previous years. KiwiSaver and superannuation are our commitment to the future and all National wants to do is cut them.ALASTAIR SCOTT (National—Wairarapa):We have had about an hour of contributions from the other side. That hour has confirmed in my mind that those guys have absolutely no idea what they are talking about when it comes to fiscal responsibility. You will have already heard Ruth Dyson talking about surpluses. She talked about—[Interruption]The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! Can we just lower the volume from my left a little bit please. I just cannot hear him at all.ALASTAIR SCOTT: Thank you Mr Assistant Speaker. Ruth Dyson was talking about surpluses and forecast smaller surpluses but she did not talk about what the $790 million of reduced or small surpluses is funding. There is a choice Ms Dyson. You cannot have everything. You can take away the $790 million package and that will give you increased surpluses but that is not what we choose to do. We care for those who can least afford it—beneficiaries with children. When you care about things like that you have to make choices.Hon Ruth Dyson: You have just taken 40 weeks of benefit increases off them.ALASTAIR SCOTT: That is only one-third. Last night we heard from a professor of economics who talked about nonsense. I commend this bill to the House. [Interruption]The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! And on this occasion I think I am having trouble hearing the member because one of his colleagues is yelling over him. I think he might have been breaching outside the bill but I just could not hear. Is the member finished?A party votewas called for on the questionThat the KiwiSaver Budget Measures Bill be now read a first time.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Bill read a first time.Second ReadingHon TODD McCLAY (Minister of Revenue):On behalf of the Minister of FinanceI move that the KiwiSaver Budget Measures Bill be now read a second time. New Zealand is emerging strongly from the economic turmoil following the global financial crisis and the effects of the Canterbury earthquakes. If we are to withstand future microeconomic shocks we need to ensure that Government spending is prudent and well targeted to where it is most needed. Removing the kick-start will achieve significant fiscal savings and enable the Government to meet competing policy and fiscal strategy objectives. The removal will also have the effect of lowering the cost of KiwiSaver and therefore improving the value for money of the KiwiSaver scheme.The ASSISTANT SPEAKER (Hon Trevor Mallard): Can I just ask the Minister to resume his seat. I noted at the beginning of his speech he said he was moving the second reading on behalf of the Minister of Finance. The bill is in fact in the Minister’s name so I think what he might want to do is just correct that.Hon TODD McCLAY: Thank you Mr Assistant Speaker. I move That the KiwiSaver Budget Measures Bill be now read a second time. Removing the kick-start contribution will achieve significant fiscal savings and enable the Government to meet competing policy and fiscal strategy objectives. Removal will also have the effect of lowering the cost of KiwiSaver and will therefore improve the value for money of the KiwiSaver scheme. KiwiSaver remains an attractive scheme and the Government is committed to it.I would like to point out that KiwiSaver members will continue to receive employer contributions and Government-provided member tax credits. It will remain an important vehicle for saving towards homeownership. Since 2011 there have been more than 9500 withdrawals from the scheme totalling more than $0.5 billion as people use their KiwiSaver contributions to buy their first home.I note that more New Zealanders have joined KiwiSaver under this National Government than under the last Labour Government. New Zealanders did not have faith in the scheme under Labour but they do have faith under National and they will continue to have that faith. The change proposed in this bill will help ensure KiwiSaver is sustainable and represents good value for money. I therefore commend this bill to the House.ANDREW LITTLE (Leader of the Opposition):This bill is the most symbolic of all the Budget legislation going through the House. Apart from one other it is the most symbolic of the measures in the Budget. After 7 years in office the National Party has discovered poverty in New Zealand. After 7 years it has discovered that there are people who have been struggling and doing it really hard. The Government has helped and has given them $25 a week but it has taken everything else away from those hard-working hard struggling Kiwis—and this is just one of them. This is the most symbolic.When it was first started under the last progressive Labour Government—the last Labour Government—the purpose of KiwiSaver was to help savings because everybody identified that New Zealand had a major savings problem. People were struggling to put money aside and they needed a scheme in which they could save so that they could live in just a little extra comfort in their retirement. But ever since this Government has been in power it has hated KiwiSaver. Actually it hated KiwiSaver at birth and it has hated KiwiSaver ever since. Every opportunity National gets to hack away at it to cut it to undermine it to destroy it it takes that opportunity. The Government did this when it cut the member tax credits and undermined that contribution. That helped hard-working Kiwis! And now it is having another go—now it is having another go. It is taking away the kick-start. It is taking away the kick-start because this is a National Party and a National Government that hates KiwiSaver. It cannot leave it alone. It cannot keep its hands off it—a bit like the Prime Minister and ponytails. It cannot keep its hands off it.So now the Government has taken the kick-start—the very thing that helps many people. For many workers I know the one thing that got them into the scheme when the scheme first came in was that kick-start—the thousand bucks. They thought: “I know I’m going to have a little bit of a struggle to get into this in the next few years until my pay increases but because I’m part of a good union and I know I’m going to get good pay increases I’ll make the contributions and I know I’ll get the $1000 kick-start and that’ll get me into the scheme.” That is why 2.5 million Kiwis are in the scheme—that is why 2.5 million Kiwis have made that decision. They knew that they could get that help and they were getting the member tax credits as well until this mob cut them and made that harder. They all got the kick-start—the $1000 payment. Those who were thinking about their kids and their kids’ future thought: “Yep we’ll make sure they get in and get a good savings habit started early.” So the mums and dads signed their kids up too and they got the kick-start as well. Well all that is going.It may have been lost on the National Party and its great planners—oh whoops it does not have any because it does not have a plan. It has never had a plan for the good of New Zealand. But let us do what economists do; let us make an assumption that the National Party has somebody who does planning. When National planned this it may have forgotten that actually kids are going to carry on being born in New Zealand. New Zealand parents will continue to have children. I think that we can safely make that assumption. So as more children are born as more children come into New Zealand and as they enter the workforce they might want to start their KiwiSaver account. They might need a bit of help and a $1000 kick-start would be that help. Well it would have been that help but National has destroyed it because again it hates KiwiSaver. It is bad enough that the Government is running down New Zealand superannuation. Oh yes 7 years in office and not a single effort has been made to make sure that the future of New Zealand and New Zealand retirees is safe and secure. Government members just live in splendid ignorance of the biggest issue facing the country. They just bury their heads in the sand. They do not want to touch it. It is bad enough for a country that is desperately trying to grow its own capital base and that is desperately trying to create the foundation for future wealth through things like KiwiSaver that this party in Government just continues to run it down.Government members sit there shamefaced—the only respectable look they have shown in the whole Budget debate. They sit there shamefaced because they know the damage that they are bringing on this country. They know the damage they are doing. It is just like the rest of the Budget actually because they do not have a plan they do not have a vision they do not know what they are doing. It is Budget by Budget and broken promise after broken promise. They are doing this because they have discovered poverty and they are desperate to do something to give the appearance that they are doing something. So they will crib it out of KiwiSaver take it off the future generations and try to kind of look after those who have been struggling for so long and give them a slight bit of reprieve now. But it is not a way to run a country it is not a way to build a foundation and it is not a way to improve the long-term interests of all New Zealanders and all New Zealand. They do not have an answer. They do not have a clue. They do not have a plan. They do not know what they are doing. They are out of touch out of ideas and rapidly out of time. They do not know what they are doing.Demolishing KiwiSaver taking away the kick-start is just another measure to further erode the strength that New Zealand desperately needs in its economic base. They have got nothing at all—they have got nothing at all to add to the long-term future economic base of New Zealand. Here was something—encourage people to get into savings encourage people to get into KiwiSaver give those kids a chance give them a start. And those workers who are on low and medium incomes give them help to get into KiwiSaver to build up their long-term savings and hopefully to give them a bit of dignity in retirement. But no Government members cannot look much further than the next balance date. And then they have to make up a fictional surplus as well to get them that far—to convince themselves that they know what they are doing to convince themselves that they have got a Budget that is going to make a difference. Well the only difference it is making is to make it much harder for hard-working Kiwis who just want a bit of help to get their savings under way. They just want a bit of help to get their KiwiSaver going and now it is being ripped from under them because this Government is desperate is out of ideas does not know what to do cannot manage the economy and is leaving all the problems built up for the next Government to have to fix and address.The problems are all mounting and this will be just one of them—the ongoing shallow capital base of New Zealand encouraged and fomented by this Government because it does not know what it is doing. It is thrashing around looking for an answer. It is thrashing around trying to convince itself that what it has done is going to be good for struggling hard-working New Zealanders and it is not. But the Government has got to do this. Government members have got to convince themselves that if they give the appearance of doing something and if they pat themselves on the back for discovering poverty then maybe they will be able to get through the next year as they rush around trying to find a solution to the other bigger problems.Government members talk about leakage. This is about their answer to leakage because apparently they are saying that the kick-start is not targeted at the right people. Well KiwiSaver is actually targeted at everybody. That is the whole thing about KiwiSaver. It is about giving every New Zealander a chance to have their savings. It is about giving every New Zealander a chance to get their savings habits under way from a young age—from a working age. But here National goes again. It never said this at the election. It never went into the election and said “That’s it.” The world knew they hated KiwiSaver. We thought the hatred had come to an end. We thought that they might do something constructive. We thought that they might do something to build New Zealand’s economic base. We thought that they might do something for the good of New Zealand’s economic future. But still they will not.David Bennett: Too little too late.ANDREW LITTLE: David Bennett thinks that the Waikato Expressway is doing something for New Zealand’s economic future. Well that is not enough—that is not enough. That is about ferrying people out of Auckland because they are desperate to get out of there and to get somewhere they can drive their car. It is not about building the economic base of New Zealand. National has got nothing to say about helping New Zealanders with their savings habits. Now we see that the most symbolic gesture of this Budget—the most symbolic gesture of this Budget—is yet more “short-termism” and ripping away the opportunity that hard-working Kiwis would have had to start their savings habit. Here National members are doing it on Saturday morning of Budget weekend. Here they go ripping away an opportunity for hard-working Kiwis who just want a chance to save and who just want a chance to contribute to the nation’s savings and to the good of the nation. Well here they go again. Here is the National Party again.The National Party as we know does not like KiwiSaver hates workers does not want to give them a hand and does not want to give them any support. It is pulling away the one chance they have got—the one bit of help they get—to get their savings habit under way. Here National is in Budget 2015 pulling it out from under them—ripping it up. National does not like working Kiwis trying to get ahead. It is the way the National Party operates—it has done so for the last 70 years. It is doing it again in office. It is about to come to an end. It will be the next Labour-led Government that restores KiwiSaver and that gives working New Zealanders a chance to get ahead for the good of all New Zealand.Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery):That is the sort of speech you give when you come to the party 43 years late. That is the sort of speech you give when you have got no ideas to offer the country at all. What we heard from Mr Little was that apparently there is no plan. Well I tell you what there are a lot of people in this country who think that the Government of the day is doing an extremely good job and they are very very happy about the Budget that has been brought down in the last few days.What we heard from Mr Little in a policy sense in that short speech was his reconfirmation that under Labour the retirement age will go up not to 67 not to 68 not to 69 but most likely to 70. That at least is something that Labour is standing for. Secondly we have heard that when people do get to what is a nominal retirement age if they are still working then there will be a means test applied to them. When you look at the Labour record for spending in Government everyone knows that it will not stop at just the earnings over and above wages; it will be everything for anyone over the age of 65 under a Labour Government.I find it really staggering too that Mr Little expects to be taken seriously when he talks about fiscal matters by offering the really insightful piece of information that if a Government makes a grant to someone so that that person might start some savings it is somehow the basis for having an expanding fiscal foundation for the nation. Well I do not mind saying that I have never really understood how someone can say that they are wealthier by virtue of their borrowing. That is fundamentally wrong and that is the sort of rubbish that Mr Little is going around saying on the stump at the moment trying to convince New Zealanders of the insightful idea that the Labour Party can somehow conjure up out of nowhere the money to make life better for everyone.The other point that was really interesting was the attack that Mr Little managed in this KiwiSaver bill to mount on this Government’s record when it comes to New Zealand superannuation. This Government has raised the superannuation income for superannuitants repeatedly over the last 7 years—repeatedly—and not just in the context of the Consumers Price Index but in other things as well. Although the numbers are not in front of me I can tell you that those increases are well in excess of $100 a fortnight in the last 3 years. That is real work by a Government. That is not some sort of penny-pinching.It is also extraordinary that in a Budget where there has been a big move to raise the benefit incomes for those New Zealanders who require that assistance that Labour members of all people—Hon Ruth Dyson: You’ve just cut 40 weeks of it in this.Hon GERRY BROWNLEE: —Ruth Dyson and the exiting crew from the back row—are all out there waving a bit of paper and asking: “Where’s the surplus? Where’s the surplus?”. So what we know is that a Labour Government will always put a surplus ahead of the needs of New Zealanders—it will always do that. That is its record. That is its record. That is why for so many of those 43 years since 1972—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I know that this bill has not been to a select committee and therefore the debate can be broader than normal but I am just going to ask the Minister to—Hon Annette King: Mention it.The ASSISTANT SPEAKER (Hon Trevor Mallard): —well that is what I was going to say—try mentioning it rather than having the entire speech as a prelude to his contribution to the Budget debate.Phil Twyford: He’s a senior member. He should know better.Hon GERRY BROWNLEE: That is right I should know better but I will also resist any temptation to note that at a very very salient point in my contribution to this debate there could well have been a partisan intervention but I am not going to say that.Just think carefully about what KiwiSaver does. KiwiSaver says to anyone coming into the workforce: “Sign up to this particular proposal put a sum of your money into the scheme and there will be an employer contribution plus a $521-a-year contribution from the Government as well.” None of that changes. That all remains in place. The really interesting thing is that young people going into the workforce and signing up to save in this way will now have access to those KiwiSaver funds for the purchase of a first home. These are not small grants—$5000 per individual if it is a second-hand home $10000 if it is a brand-new home or $20000 for a couple who have saved through this system—so it is utterly ridiculous for anyone to suggest that the incentives for young people to sign up to KiwiSaver are in any way at all damaged by this particular prospect.I heard the most interesting thing on TV the other night. It was a vox pop in the street where clearly someone from the Labour Party had managed to get themselves in front of a camera—[Interruption]—yes true; well it is a rare thing for someone from the Labour Party to get in front of a camera—and they were saying: “This is a terrible thing. I had hoped that I would be able to use my KiwiSaver and that $1000 to go towards my first home.” Well get real—get real. Saving over a 5-year period is going to see more than $2500 of Government grant going into that account plus up to $10000 at the time that the house is bought. People understand that. People understand that well.I can tell our opponents on the other side that there is a whole industry of people out there encouraging young people to join KiwiSaver under those conditions. That is why the number is at 2.5 million and why it will not fall is that young people actually do have aspiration. Young people do want to make the most of their lives. Young people will see that their getting up to $15000 worth of Government grant when they come to buy their home makes it well worth their while being in KiwiSaver regardless of this $1000.Dr DAVID CLARK (Labour—Dunedin North):This is a Budget of broken promises. It is short on vision and it fails to deliver a surplus. People around the country watching that speech from the Hon Gerry Brownlee will be saying to themselves: “I wonder—did those Ministers on the National benches take that $1000 themselves before they cut it off for hard-working families around the country?”. They will be asking whether the member for Ilam banked that $1000 before he cut it off from his hard-working constituents. They will be asking whether he encouraged his family members to take that $1000 before the Government cut it off from hard-working constituents. They will be talking to the member from Hamilton West and asking whether he took the $1000 before he cut it off from his hard-working constituents.David Bennett: He wouldn’t take a thousand bucks.The member from Hamilton East: did he take it from his family members for himself before he cut it off for the rest of hard-working New Zealand? They will be going into the office in Rodney and saying to the member there: did he take the $1000 before he cut it off from his hard-working constituents? There are some guilty faces opposite and I am not surprised. They will be going into the Rotorua office and saying to the Minister: did he take the $1000 before he cut it off from hard-working families? And I would be interested to hear what answers they get. I wonder whether the journalists will ask members opposite whether they took the $1000 KiwiSaver kick-start before they cut it off from hard-working New Zealand families. Over there they are quite happy to cut out the lunch for everyone else when they have got a big lunch for themselves and that is indicative of this Government’s attitude to the future of New Zealand.The Government has hit the panic button. It has hit the panic button and we can see it right there in the regulatory impact statement on the front page. On the front page: “The advice was requested in advance of Budget 2016 and therefore has been prepared urgently.” How long has the Budget been coming? Why did it need to be prepared urgently? The analysts have “not focussed on the effect of policy options on national saving”. They say it there in paragraph four. In paragraph two it is urgent; in paragraph four they have not focused on savings. And then paragraph five if we skip forward: “There has been only limited consultation”. And now we are passing it through urgency. Members opposite know what answer they would get. They know the hard-working New Zealanders who come into their offices would be furious that they took the $1000 and then said it is gone. It is gone. But it is what we get from this Government. It is out of touch. It has lost touch with middle New Zealand. It is looking after the interests of a very wealthy few and it is robbing Peter to pay Paul.Although there are a few good things in the Budget—and we on this side have acknowledged some good changes in the Budget—we see that there is sleight of hand and they are taking with the other hand and middle New Zealanders are the ones who are squeezed yet again. The Government is robbing Peter to pay Paul. Those improvements should not come at the cost of those who are just one or two rungs further up the ladder but that is what we see from this Government—a Government short on vision. There is no doubt that this change will reduce savings for New Zealanders and at the very time we need to be increasing them. This is a short-term plan and not a long-term vision. But it is what we have come to expect from this Government: a Government that is neglecting the regions that has failed to diversify the economy that has failed to address the housing bubble in any meaningful way and that has failed to diversify the skills of New Zealanders to prepare for tomorrow.We know—I remember from my time in Treasury—that one of New Zealand’s challenges is capital debt. It is actually having enough money for businesses to access for them to grow. That is a very serious problem. Treasury had an analyst on it in the 1970s. Treasury has still got an analyst on it and members opposite are doing nothing about it but cut cut cut when it comes to savings. They do not care about business in New Zealand—not small businesses and not medium sized businesses anyway. Across there all we see them doing is cutting. They have cut the contributions to the Cullen fund. They have cut the contributions to KiwiSaver on several occasions. This is one of a number of cuts. Last night my colleague David Parker outlined seven or eight cuts I think it was that they have made to KiwiSaver. This is a Government that does not care.In Australia they have got a superannuation fund that has got $1.3 trillion in it. That would have happened across here if Muldoon had not cut it. This is the same attitude as the Muldoon Government—this Government though has borrowed more than Muldoon. It is up to $88 billion in debt. It is drowning us in debt because $10 million a day is spent just paying off debt. Taxpayers are paying $10 million a day just to pay off the Government’s debt. That is the attitude it has. That is short-term thinking from a Government that is out of ideas.Half a million Kiwis are going to miss out on this $1000 over the next 4 years. Those are the Kiwis who should be going into the offices of those members opposite and saying: “Did they take the $1000 before they cut it?”. Did they take the $1000 before it was cut? I will be interested to see. I would like them to put up their hands to show that they took the $1000. I would be interested to see whether members opposite have the courage to put up their hands to show that they took the $1000. Let us see: how many of them took the $1000? How many took the $1000 across there? None of them! They are all saying that none of them took the $1000. I bet that is wrong. I bet we will learn in coming days that that is wrong. Those members opposite should own up. They took the $1000 and then they took the ladder away. That is just typical of this Government.We know this plan works. That is the crazy thing—2.5 million Kiwis have signed up for KiwiSaver; 2.5 million Kiwis have signed up for Labour’s KiwiSaver programme. And the Inland Revenue Department says in its recently released fairly thick and comprehensive evaluation report that this is an excellent scheme basically: 36 percent extra savings on top of the savings that would ordinarily have happened in our economy. It is because of course there are member contributions that encourage people to get involved. There is an opt-out clause so people are in the scheme and there are no overheads no hassle to get involved. People find themselves saving before they know it. Of course they are encouraged because there is a thousand bucks in there to start with.As my colleague David Parker outlined last night that makes a difference for somebody on $15 an hour with a part-time job when they are saving a couple of bucks a week: $1002 is much easier to be proud of than $2 in your account. It makes you feel good. Behavioural economics have happened. We are not still in the 1980s. Those people over there need to read a few new economics textbooks get the Hayek out from under their pillows get a few new books under their belts and get the spray-misters out to dry them off. Those people opposite need to have an up-to-date understanding of just how economics works. Thank goodness the Inland Revenue Department has a few insights because it is telling the Government that this policy works. This policy works.The beautiful thing of course is that people are signed up to the scheme already. A lot of people have got this and they will be thankful. But it is the half a million Kiwis who are going to miss out over the next 4 years we should be thinking about. Those half a million Kiwis—I hope just a few of them go and ask these National MPs and Ministers opposite whether they took the thousand bucks before they got rid of the scheme. They already cut the member tax credit in 2011 cutting savings. Cutting savings is not the way to manage the economy. It is what Muldoon did and this is the Government that has created more debt than Muldoon. It is the same plan and it did not work then and it will not work now and Kiwis can see that.We do not even know whether it can be implemented. The Inland Revenue Department says it is going to cost $210000 to implement this scheme. That is 210 Kiwis who could have had the extra thousand bucks. And will the Government be able to do it? Or will members opposite be coming back again like they have done with so many bills that have adjusted the tax system—to reverse the changes out because they cost so much under the old system in the Inland Revenue Department that they still have not fixed after nearly 7 years of Government? Seven years 7 long years and they still have no new ideas. They have not fixed the tax system. I doubt very much whether they will be able to do it.They are costing New Zealanders’ future. They are stealing from the future generations from the pockets of kids. This is what it has come down to. Members opposite will claim high and mighty. They will say they have made some positive changes and no one on this side of the House begrudges them that. But we do not want to do it by stealing out of the pockets of those who are one or two rungs further up the ladder. It is always the middle class and the lower class those who are struggling those who are really working hard those who go out to work every day on modest wages those who are on median incomes who are feeling the squeeze. It is not those at the very tip-top not those who benefited from the 2010 tax package not the top 1 percent.But we will see. Let us see whether Mr Bennett stands up shortly to say that he took the $10000 and he is proud to see that no one else—[Interruption] Sorry $10000—whatever even better. Let us see whether he took the $1000 and then cut the scheme. I bet Mr Bennett will tell us that he did take the $1000 and that he encouraged everyone he knew. This is retrospective legislation because members opposite know that if they pushed this out a whole bunch of people would sign up no matter what they say. This is a Government that is out of vision out of ideas and out of touch.DAVID BENNETT (National—Hamilton East):The speech that we heard from Andrew Little today was much better than 2 days ago. I think that was actually a better speech than the one he delivered on Budget night. It was too little too late but it did come from a member of that party. And in that speech he talked about how the Labour Party felt that there were shamed faces in this Chamber. The only shamed faces are over there. Those were the shamed people on Thursday because they realised that for over 43 years they have not delivered for the people who need help—43 years that will go down in the history of New Zealand politics. Forty-three years and not one Labour Government did a thing for those people. Every day they come into this Chamber and they preach high and mighty and they say how they are looking after people in need and in vulnerable communities—all that stuff. Do they deliver for them? No they do not deliver. Andrew Little does not want to do that.What does he want to do though? What does Andrew Little want to do? He wants to take superannuation away from hard-working New Zealanders—hard-working New Zealanders who have spent a lifetime working. When they retire they look forward to their superannuation. And Andrew Little wants to take that away. He wants to take superannuation away from New Zealanders. He has had 2 days to reflect on that and he still believes in it. Today in this House this morning he said that he would take that superannuation entitlement away from New Zealanders—from hard-working New Zealanders who have spent years in the workforce. They are going to lose it under Labour. New Zealanders understand and expect that from the Labour Party now.Labour’s grand plan is to give you $1000 in your KiwiSaver. Grant Robertson said that he would do that. He would reinstate that policy. This morning the Labour Party has said that it would reinstate this policy but its reason for reinstating this policy is that in good economics it makes you feel good if you have got $1000 in your account. Good economic policy according to the last speaker Mr Clark who did not come back to Hamilton after his last visit is that if you feel better for having $1000 in your account then that is good economics. Well where does that money come from Mr Clark when you have got Budget deficits? You have to borrow that $1000 to put into somebody’s account to make them feel good. Is that good economics?Maybe if you had actually run a business you would understand that you have to earn the money and then put it in your account rather than put it in there just to make you feel good. But that is the feel-good factor that you get from the Labour Party. Grant Robertson said after the Budget that the Labour Party is going to reinstate the KiwiSaver kick-start. He did not talk to his colleagues. He did not talk to them at all. He just came out and said it. He said it. That means that Labour has committed another $400 million in the next Budget and future Budgets—$500 million. So when we come to 2017 you can put another $500 million on what it promises in the election campaign.Hon Member: Whack it on the bill Phil.DAVID BENNETT: Whack it on—that is right. Whack it on the bill because that is what Labour has done.Mr Little when he was talking mentioned superannuation constantly during his speech. He talked about it constantly because he wants to attack the very people who have made this country strong—the very people who are in this room. I bet you that “Professor” Fletcher Tabuteau over there will not be agreeing with that. I bet you that “Professor” Tabuteau when he talks to his boss will know that New Zealand First is not supporting any changes to superannuation because for all of the faults that there are in New Zealand First—and there are many and you will see them lined up there now—there is one thing it has got and it is that its leader has a sense of the superannuation debate. He knows that it would be the end of the world for the Opposition to go out there and actually promise changes to superannuation. But the Labour Party is high and mighty and will do that. It is a bit like a capital gains tax. A member of the Labour Party promised a capital gains tax. Then they lost the election. Then they said no we are not having a capital gains tax.Dr David Clark: I raise a point of order Mr Speaker. I appreciate that my own contribution was somewhat wide ranging but I did try to tie it to the bill. If the member is trying to say that the cuts that he is making are tied to the bill then that might be in order but it seems it is going a bit far.The ASSISTANT SPEAKER (Hon Trevor Mallard): The question of relevance is one that is purely for the Chair and although I accept that I received some criticism from the Leader of the House when I attempted to narrow the debate earlier as a result of the advice that I have had from him I have let this member run a bit wider than would normally be the case.DAVID BENNETT: I do not know why the Labour Party cannot give dignity to people in retirement and why they want to attack the hard-working New Zealanders who have spent years working in our workforce to pay for those members to be in this room—to pay for them to have those grandiose ideas to pay for them to go around the country as if they are some kinds of lords and ladies of the world who can tell us what to do. And then when it comes to those workers’ retirement they are going to take superannuation away. They are going to take away hard-working New Zealanders’ entitlements in their retirement. But they want to give those workers $1000 now to make them feel happy. That will make them feel happy and they will be all right. When they retire they are going to lose more than $1000; they are going to lose their entitlements. They are going to have to wait until they are 70. Under Labour those people working on the outside of this building doing the hard brickwork on this building will have to work until they are 70—70 is the age Labour is going to make them work until. But those workers will get up each morning and they will do that work because they know that they got $1000 when they were 21 and they will remember that and think: “I am happy. I am a happy person because I got that thousand bucks.” That is what the Labour Party economic theory is all about.It is great to see and it is great to see Andrew Little smiling. It is the first time that I have seen him smile in 2 days. It is hard for him. It must be very difficult being the leader of a party that does not really exist any more and also a party that he does not have support from. The rest of them show more animation when a National Party member speaks than they do when their own leader speaks. It was really sad to watch them on Thursday night. When you look at a Budget you should attack a Budget if you are in Opposition.The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! [Interruption] Order! I think that even my sort of liberal approach is now being tested when the member talks about other debates on which he is yet to speak. So the member will now address the KiwiSaver Budget Measures Bill.DAVID BENNETT: Thank you Mr Assistant Speaker—and a very good Speaker as well. For 43 years we have delivered the Budget—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! [Interruption] Order! The member will resume his seat.JAMES SHAW (Green):Thank you for the opportunity to speak on the KiwiSaver Budget Measures Bill. I am going to take I hope a slightly different approach. I would like to start by acknowledging both Mr Brownlee and Mr Bennett for actually taking full calls on this bill and actually providing some form of argument in this debate because during the previous Budget debates over the last few days Government members have not actually even bothered to speak to their own bills. They have not actually bothered to lay out their case; they have just relied on their numbers. So I do appreciate the fact that Mr Brownlee and Mr Bennett did actually take full calls on this bill even if they relied more on volume than reason to make their arguments.There are a number of key points that I would like to address and I am inviting the Government to respond directly to these points because I have not yet heard any real arguments—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! Sorry there is noise from both sides at the moment and it is a bit hard to hear the member.JAMES SHAW: I was just saying that I am actually inviting the Government to respond specifically to these points.The first one is around New Zealand’s savings rate. We are still 22nd out of 24 OECD countries in our savings rate which even given the success of the KiwiSaver scheme over the last few years is a shockingly low rate of savings. We are a country that relies more on debt than we do on savings. We have weak capital markets partially as a result of this. National’s Savings Working Group itself said that our foreign debt is too high. This makes us vulnerable and our domestic savings are essential to try to redress that. Our investment needs to be funded from offshore because we do not have the domestic savings to provide those sorts of capital markets. Removing the incentive from KiwiSaver and reducing the likelihood that more people will be joining the KiwiSaver scheme reduces our domestic savings rate. So I would like to know absent the incentive what the Government’s plan is to increase New Zealand’s savings rate. That is the first point.The second point is around the loss of the incentive. I would like to thank David Clark for his contribution before about behavioural economics which is a more recent evolution in economic thinking. The question here is: why would you take away the incentive? Absent compulsion why would you take away the primary incentive? It is the one that most people know about. The ANZ chief economist Cameron Bagrie said in this morning’s Dominion Post that he himself—ANZ’s chief economist—would not have put his kids into KiwiSaver if it was not for the $1000 incentive.So the $1000 incentive is the most well-known component of the whole scheme. There are other incentives still contained in the scheme as Mr Brownlee said which include the tax rebate the matching contributions and so on. But actually my belief is that the Government would have been better off to cut or remove the tax rebate than the $1000 contribution. That would probably have had more fiscal impact but it would have retained the $1000 incentive. That is what people think of when they think of the incentive of this scheme. As far as I can work out what you are going to see is a reduction in the percentage of people who are taking up the scheme. So I would like to know what the Government’s response is to the loss of that incentive. How does it actually expect the same percentage or equivalent of people to continue to join the scheme absent the $1000 incentive?The third question is around the timing of the loss of the incentive. If for example you had said that this would take effect in 6 months 12 months or 2 years there would have been a window where people said: “OK there is still an incentive but I have got to get in now or it is going to be lost.” Even if you had given it a week you would have seen a rush of people joining the scheme. One of the previous speakers on the Government side said: “Well look if people have not joined the scheme now what is the likelihood that they ever will? Given that we have had the incentive for all these years what are the chances that they are going to do that?”. If there had been a time limit—and if my reading of behavioural economics is anything to go by—there are a lot of people who are out there thinking: “Oh yeah I will get to it one day but it is a bit complicated. It is a bit hard. I do not have enough money quite now. I will get to it.” If you had left a window and said: “Let us give this 6 or 12 months and then the incentive would go.” yes it would cost you a bit more money but you would get that tail of people who just had not quite got around to it. But instead by cutting it off immediately there is no chance for people to get it who were thinking about it but had not gotten around to it. I would like a response to that please as well.The next one is about intergenerational equity. The current generation of parents with young kids who are working are paying for their kids’ education through the high tertiary fees and costs. They are paying for their own retirement because they know that by the time they get to retirement age there is not going to be enough cash in the kitty to give them proper superannuation and they are paying for their parents’ retirements through taxation in the form of the existing superannuation scheme. So the current generation of families who are working are getting squeezed in terms of paying for three generations at once. In removing this incentive you are actually making it even harder for intergenerational equity to take place. I would like some kind of sense of what your plan is to redress some of the intergenerational issues that arise out of this.The fifth point is around the short term versus the long term. I think Labour have already made this point very well and frequently in the course of this debate which is that every time the Government gets concerned about its short-term books it relies on kicking the can down the road in terms of the long-term fiscal sustainability of the country. They cut the contributions to the superannuation fund in order to try to maintain the books now. Now they are cutting the KiwiSaver incentive basically balancing the books from New Zealand’s superannuation schemes and retirement schemes. I would like some sense of what your long-term plan is. How are you going to fix the long-term future rather than just deal with the short term?Those are my main points. What is the Government’s plan to deal with New Zealand’s savings rate? What is the Government’s plan to deal with the loss of the incentive that then happens and how do they expect the rate of take-up to stay the same or even increase? What is the impact on the rate of take-up of KiwiSaver when the incentive is lost? Why did they not consider a window to get people in who were thinking about it—the third point? The fourth point is around intergenerational equity. The fifth point is around the long term versus the short-term nature of this decision. There are five questions there that I would like answered during the course of this debate more bombastically or less bombastically as takes your pleasure. But I would like to hear those.Middle to low income earners are struggling to save. We know that. Under National those who are saving are the people who really can save—that is upper-middle and upper-income families. What this legislation does is this takes away the incentive and a little bit of savings for people at the bottom end of the pile people who could not get a thousand dollars together. What is your plan for the impact on inequality that the loss of this $1000 is going to have?We have got a number of Supplementary Order Papers that will come up during the next part of the debate which are in relation to restoring or retaining the $1000 kick-start for people who have got community services cards which would deal with some of those issues. We have got the Kids’ KiwiSaver programme that we launched a couple of weeks ago with a progressive savings component to it—all of which is designed to deal with some of the issues that I have raised during the course of this debate. I just wanted to flag that we will be speaking to those soon. We have got some ideas about how to deal with some of those issues. I would like to hear what the Government’s plan is for dealing with those kinds of issues. Thank you.FLETCHER TABUTEAU (NZ First):If I could continue along the same vein as the previous speaker James Shaw and bring some facts and some intelligent discussion rather than abuse into this morning’s proceedings. Let us take an example used yesterday. Take a 15-year-old who is about to open a KiwiSaver account today. If they had done it before this $1000 incentive was removed that $1000 would actually be—and these are not generous calculations they are quite modest—at the time of that person’s retirement given a 10 percent return which is actually reasonable considering the annual rates of return of KiwiSaver funds at the current moment over 50 years the calculation is about $117000 to $145000 at retirement.Clayton Mitchell: How much?FLETCHER TABUTEAU: It is $117000 to $145000 at retirement.I said yesterday that we might be balancing the books at the moment. It might look like you are balancing the books now but what you are doing is robbing those sums of money from future generations. That range like I said is modest and the multiplier effect on your annual returns the compounding interest effect is such a powerful thing. It has been spoken about in this House many times.Consider the reality out in the typical Kiwi household. The median income for a Kiwi is still less than $30000 per annum. That $1000 was not only a drawcard it was a real and meaningful sum of money. At the end of its investment life it was—it really was—going to make a huge difference in the enjoyment of life for those retiring. The Government has taken away $145000 in real terms from our future generations for those who would like to retire with some dignity from every person who missed out under this retrospective piece of legislation. This Government’s vision stretches only to the end of today. Mr English is literally robbing our children’s piggy banks.This surprise bill opens up questions about uptake the impact on our national and individual savings and as mentioned already the fairness or lack thereof across generations. The advice given to the Government on this bill was “The analysis has not focussed on the effect of policy options on national saving”. I will just repeat that: “The analysis has not focussed on the effect of policy options on national saving”. Here we are talking about $1000 contributing to national savings but the advice given to the Government the analysis of the policy itself does not take into account national savings. It beggars belief. In the first part the officials have admitted that the bill ignores the problems of savings and then they say “the analysis is concerned with addressing the poor”—supposedly I would put—“value for money and target effectiveness (leakage) of KiwiSaver subsidies.” Apparently we are told that the value for money and target effectiveness of KiwiSaver subsidies just is not there any more. The $1000 is not much of an incentive any more. I will come back to that.Earlier I highlighted that although $1000 may seem like a small sum we are talking about people on the median income in New Zealand of less than $30000. It is actually around $28000. I know the National caucus will not understand what that means but $28000 and trying to save $1000 from that—try to do that in a year. No I do not think you could. I have been there; you cannot do it. Try to do that over 10 years and actually you will not get a chance to grow your savings pool on the New Zealand median income and the Government has now taken away that little incentive that difference we spoke about last night and today—motivation for savings. Now the Government is taking it away. What the Government has not discussed is the future value of $1000 at retirement age. I will say it again: $145000.Consider those living in the regions of New Zealand—the productive heart of this country—who are currently not able to share in the wealth they create. Just think how hugely they will be affected by the removal of this incentive. Look at the unemployment rate in provincial New Zealand remembering actually that an hour of work per week is measured or ticked in the employment column. An hour of work a week is considered as being employed. It is 9.9 percent in Northland 7.8 percent in my home region of the Bay of Plenty and it goes on. On top of this the Government must acknowledge that regional incomes are well below the national average. What is the Government doing to our regions? It really is such a small amount of money now compared with the value that it presents in the future.I said yesterday that the supposed savings on the Government’s books today for every individual Kiwi still not signed up will be approximately $120 million a year for the first 4 years. As the fund reaches critical mass in terms of people subscribed contributions will decline. So these miniscule savings are short term and short-lived. They are not actually saving this country anything at all.The Minister has removed the incentive to save. Actually do not think about the regions now; think about this in the context of Auckland. People are not going to save. That $1000 was a real and meaningful incentive. People in Auckland are living day by day. The costs of living in our biggest city are just gigantic and the Government has taken away the opportunity or incentive of Aucklanders to get into a savings scheme where they might have been able to subsidise their superannuation. It has taken it away.We have been speaking to Grey Power members and they noted: “The axing of the $1000 start-up boost for KiwiSaver contributors means that many New Zealanders will be much poorer when they retire as it removes a vital incentive for workers to join up and means more people will be dependent solely on their superannuation on retirement.” They go on further to say: “Many New Zealanders currently aged 45 to 65 do not own homes and those who do are actually still paying mortgages. They are on low incomes and are not enrolled in KiwiSaver. They are already facing increasing rental costs in a tight housing market made worse by the removal of many State houses across the country.”Even though many Grey Power members have missed out totally on the KiwiSaver programme they know that this Government is robbing from their children and their grandchildren. This bill does nothing for the children of this country in a time of Generation Rent skyrocketing house prices high student fees and the loans that go with that. This bill is not fair or reasoned. I can expect soon that everyone will be automatically enrolled with the rest of New Zealand made to compulsorily join the scheme. I suppose this bill makes compulsion cheaper. The cynicism is hard to take to be fair. Thank you.CHRIS BISHOP (National):I quite like Fletcher Tabuteau but I have to say that if I were a pupil in “Professor” Tabuteau’s economics class I would be quitting and asking for a refund because that speech was woeful. But I do like Mr Tabuteau.What a contrast it has been between last night and this morning. Last night at 5 to midnight the Government benches here were full. We had 30 or 40 Government MPs here backing our Ministers backing this Budget and backing these important bills that we are passing this morning and last night. There were only three or four Labour MPs last night at 5 to midnight. Something has twigged in the Labour Party overnight and that is that Andrew Little’s leadership is in mortal danger. What do we see this morning? They have flooded the Opposition benches—[Interruption]The ASSISTANT SPEAKER (Lindsay Tisch): Order! I would actually like to hear what the member is saying.Hon Annette King: Yes but he should be talking about the bill.The ASSISTANT SPEAKER (Lindsay Tisch): If I could hear what the member was saying I would know whether he was talking on the bill.CHRIS BISHOP: Thank you very much Mr Assistant Speaker. I was making the point that when we were debating the KiwiSaver Budget Measures Bill last night the contrast with this morning is very very stark. The Labour Party twigged overnight that Mr Little’s speech in the Budget reply debate on Thursday was so woeful that his leadership is now in danger. The Labour members have had to come down here this morning for this KiwiSaver bill and flood the Opposition benches to hear another appalling speech from Andrew Little about matters that are important to the country.It was an interesting contrast with the Budget and this bill was it not? We had the members on the Government benches outlining a clear programme of action including for this bill and the members on the Opposition benches had nothing to say—absolutely nothing—about the benefit increases the National Government is passing. The party of the dispossessed the party of the disenfranchised the party of the working poor the party of the workers and the party of beneficiaries—what did it have to say about the National Government’s increase in benefit levels? Not a sausage. It is disgraceful. Then the Labour members come down here for this bill and they cry crocodile tears about the prudent and sensible—prudent and sensible—cuts that the Government is making to KiwiSaver.Let us get some facts on the table. No. 1: there are 2.5 million people in KiwiSaver already. OK? That is fact No. 1: 2.5 million people in KiwiSaver. It has proven to be very very popular. When Michael Cullen set up KiwiSaver back in 2006 by this stage the prediction was that there would be 700000 people in KiwiSaver. That target has been smashed absolutely exceeded. It has been a huge success. It has been extraordinarily successful—far in excess of what the architects of the scheme would ever have predicted.But that leads to the second fact and this is the second fact that is important to remember. No. 2: the $1000 kick-start contribution has been very expensive. The Government has spent $2.5 billion over the last 7 years on the kick-start contribution. At the time of the global financial crisis and the Canterbury rebuild and at the time at which as the members opposite rightly and adroitly point out so often we are trying to get the books back into the black $2.5 billion is a decent chunk of change. The ongoing fiscal costs of that are also very expensive. It is very expensive and KiwiSaver has been proven to be popular.What that means now—and this is a very important point about this bill—is that this is now a “nice to have”. It is not necessary. There are 2.5 million New Zealanders in KiwiSaver already. Let us not forget the existing incentives that remain to continue in KiwiSaver—the member tax credit of $521 a year the employment contributions that employers are required to pay. So there are plenty of good reasons to join KiwiSaver and we on this side of the House are sure that we will continue to have it.Members opposite cry crocodile tears and there are huge amounts of hyperbole about how we are taking the ladder away. Well sorry but removing the $1000 kick-start contribution for joining an already generous scheme that will provide for people’s lives in the long term is not taking the ladder away from somebody. Taking the ladder away might be opposing important changes to benefit levels like the first ones that have been made in 43 years. The party of the dispossessed and the poor has nothing to say about the fact it is the National Government that is actually making life better for those least well off in our society.Then we get to what Labour has promised and the schmozzle it has had in the last couple of days about its stance on superannuation and its stance on KiwiSaver. Grant Robertson in one line spent $500 million of the next Labour Government Budget which hopefully will never happen. In the unlikely event that it does he spent $500 million in one line when he was asked on the Stuff chat website whether he would commit to bringing back the $1000 kick-start contribution and he said yes. OK that is fine. You can make that choice. It is the role of the Opposition to outline alternative fiscal spending plans. But that one line those three letters typed away—or that a staffer had typed on the Stuff chat website—cost the Government $500 million over 4 years and it is just in line with the Labour Party’s big spending agenda. You can add it to the very long spreadsheet that exists of Labour Party spending promises that Mr Cunliffe promised at the last election that Mr Shearer promised at the election before that and that Phil Goff promised at the election before that: the promise to start the Cullen fund superannuation contributions again the promise to bring back Moroccan cooking course subsidies.Remember that? Remember when the Labour Party was outraged about the fact that we were making middle-class people who wanted to do macramé classes and Moroccan cooking classes at their local high school actually pay for them themselves as opposed to getting money from the taxpayer for them to go and learn how to rub spices on chickens. How ridiculous! So we are going to add this very expensive promise to bring back the KiwiSaver kick-start contribution to the very long list of promises that the Labour Party has made. Labour members have absolutely no fiscal credibility whatsoever. They took us into recession before the global financial crisis they left us with a decade of deficits and now they have the temerity to come down to this House and complain about debt and about how we are not back into surplus. Well their record speaks for itself. It is appalling and they should be apologising to New Zealanders for it.This is an important part of the Government’s post-Budget measures to continue this economy on its growth track and to continue to provide support to the most vulnerable New Zealanders. It is telling that on a Saturday morning the Government is removing essentially a form of middle-class welfare a “nice-to-have” but something that is not necessary any more. We are removing that and instead we are supporting beneficiaries and the working poor. We find ourselves in this weird parallel universe where the Labour Party is supporting $1000 for people who frankly do not need it and opposing more money for the working poor whom they have liked to cry crocodile tears about for the last 9 years—disgraceful!The ASSISTANT SPEAKER (Lindsay Tisch): Order! The next call is a split call. [Interruption] Order! The next call is a split call. Jan Logie—5 minutes.JAN LOGIE (Green):I rise to take a call on the second reading of the KiwiSaver Budget Measures Bill. Traditionally in Parliament second readings are the time when we reflect on the select committee process when we feed back what submitters have raised with the committee. After consideration and debate within the committee we reflect on those discussions in the House and the amendments to the bill that have happened as a result of that. Of course because again this is happening under urgency this speech is not able to be as fully developed as it would have been otherwise and the public have not had that opportunity to have input.So what I would like to focus on in this speech are the few comments I have been able to gather from people in New Zealand through Facebook on their views on this initiative.Hon Annette King: Real submissions.JAN LOGIE: Yes some actual submissions. That is what I am going to do in this speech. The first one is actually not necessarily disagreeing with the Government’s view and what it is doing here. This is an academic whom I know who is saying: “I am in mixed minds. I think it’s very disappointing they have further downgraded the incentive for people to save for their old age. But at the same time I’d be interested in seeing the demographics of those enrolled in KiwiSaver to know whether the kick-start was effectively operating as a wealth transfer from the poor to the rich in which case removing the kick-start would bother me less than if it was operating the other way. Now I’d like to see that evidence from the Government so that actually this country and this Parliament can make a considered decision around that.”Some of the other comments from now on are a bit clearer on their view about this initiative. Brenda Pilott ex-head of the Public Service Association is saying: “It’s an inexplicable move. We’re told that it’s vital people create savings for their retirement and KiwiSaver has been a great success partly due to this incentive. It makes no sense to cut it.” Another person Jacob is saying: “I feel like it’s making things harder for us future generations to save up for housing and retirement. This was a positive boost from the Government which I saw as a good incentive to join but now I’m like ‘Why join?’ I might as well just put my money into a savings account and then I can use it when I want however I want and it won’t be there for retirement.”Another person is saying: “Before KiwiSaver was introduced I’d never saved a cent in my life. I decided to join because of the kick-starter and have now got a tidy wee sum accumulating every month and I feel proud of that.” So the incentive the kick-start was an incentive for somebody to save for the first time in their life and that is backed up by policy advice from the Inland Revenue Department.Another person was saying: “They should have given 3 months for those of us who were halfway through the paperwork for our kids to have a chance to get this incentive.” So the fact that this has been brought in without any notice means that some people were halfway through the paperwork to get this incentive for their children and they have missed out. So again as raised by my colleague I would like to hear the justification for that.We have heard from Government members that “Two and a half million people have signed up. Really—how many more people are going to do it?”. Well some people were halfway through doing it. Somebody else is saying on that point: “Glad I took advice from the bank when I opened up an account for my daughter. But I hadn’t got on to it for my baby. Gutted she missed out.” One other person says: “Yeah working for the people huh? Note the kids these days just got set back yet another grand to buy that house they’ll never have because some old dudes in Parliament wanted a teeny surplus. Pathetic.” Another person is saying: “So this cut’s going to fund our $200 million fight against ISIS. What are you not telling us John?”.These are some of the views of New Zealanders and again we have been told by this Government that there is no choice but to do this if it is going to be fiscally responsible. It is interesting what it focuses on and what it is not focusing on in that discussion.The ASSISTANT SPEAKER (Lindsay Tisch): The Hon Damien O’Connor—5 minutes.Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman):There is an old saying “Follow the money.” and so too with this piece of legislation. This country was built on capital from England coming into this country and we have been told for many many years that we have been very poor savers. So that terrible Tory Robert Muldoon destroyed what was a Labour Party initiative through the good work of Kirk and Rowling to build up a superannuation scheme and savings that would have given our country proper savings and proper investment funds. The terrible Tory Muldoon destroyed that and so too does this Tory Government intend to destroy the savings scheme we have. Michael Cullen brought in KiwiSaver Kiwibank and the Superannuation Fund to offer us security in superannuation and to encourage savings that would have given this country real investment capital—and indeed that has occurred. But what we have got now is a Tory Government intent on destroying that savings ethic. It is not the $1000 that has given real effect here to the cuts; it is the disincentive to the hundreds of thousands of Kiwis out there who have wanted to get into KiwiSaver. This will destroy that incentive. Why? Well follow the money.If we have as we do now a building capital fund to invest in our future to take ownership of our own assets we can control our own destiny. But I will tell you what—if you are a Tory a money trader or a traitor you do not want that. You do not want that. So what we have got is Jenny Shipley Chris Tremain and Don Brash in charge now of Chinese banks that are coming in to this country with trillions of dollars available to invest in New Zealand. KiwiSaver the Superannuation Fund and Kiwibank are the only fair honest New Zealand players to counter that investment. What this bunch of terrible Tories is doing is exactly the same as Robert Muldoon did: undermining the ability of New Zealanders to invest in our future through a building capital fund that has real wealth and real capability.I think it is an absolute outrage that the Government is taking from New Zealanders from young New Zealanders the incentive to invest in the future not just in their own personal accounts but in the building of a capital fund that can invest in the value-added investment we need. In fact we have got Ruth Richardson in the ANZ bank trotting around the country at the moment saying two things: firstly that cooperatives are no good so get rid of Fonterra; the second thing she is saying is that we need billions of dollars to grow this economy into the future. And who is going to provide that? Oh your mate Jenny Shipley through her Chinese bank your mate Chris Tremain through a Chinese bank and Don Brash as well. The Tory Government in power now wants to undermine the growing focus on savings and investment from within this country. I think it is an outrage and I think this is a treacherous act that might seem on the face of it just fiscal responsibility.As the bill says quite honestly this “will achieve significant fiscal savings” but then it goes on to say a ridiculous statement that cutting back this $1000 “will therefore improve the value for money of this KiwiSaver scheme.” This is about undermining the objectives of the KiwiSaver scheme. It is about undermining the savings ethic of a country that has just started to realise the value in that. And the Tory mates in here and the ones out there are conspiring to ensure that we are fed a diet of foreign investment in capital rather than that built up by our own people for our own future. This is an outrageous piece of legislation and I am sure Nick Smith is going to get up on his hind legs and say it is wonderful. Justify what Jenny Shipley is doing. Justify how you can take a $1000 incentive away from the young New Zealanders who want to own their own future.Hon Dr NICK SMITH (Minister for the Environment):That speech from Damien O’Connor was another speech that shows just how financially illiterate people are on the Opposition benches. Here is their line: you borrow to save because the only way the Government in the next year would be able to provide the $1000 kick-start for KiwiSaver is to borrow the money. The members opposite have got this sort of smoke and mirrors approach that if the Government goes and borrows money to save somehow you are better off. That is a loopiness that reflects why they are on those benches and we are over here.The second point I wish to make is in respect of the issue of New Zealand’s net foreign investment position. I agree with Mr O’Connor that it is absolutely critical that we grow the net wealth of this country but I want to invite the member to have a look at the Budget tables. What they show is that over the course of the years that Mr Damien O’Connor was in Government New Zealand’s net investment position declined in every single year. In fact—Hon Damien O’Connor: How much did you borrow Nick?Hon Dr NICK SMITH: In fact Mr O’Connor look at the figures for 2008 in which New Zealand’s balance of payments was a record worst in 50 years of minus 9 percent. Look at what New Zealand’s net investment position was when you left the Treasury benches where we had reached the point of minus 100 percent of GDP a figure that has consistently improved and these Budget documents show that it is continuing to improve.Let us come to KiwiSaver. When I sat where Damien O’Connor sits on the Opposition benches the Government of the day said that it had a target that by 2015 there would be 700000 people in KiwiSaver—700000. Do you know how many people are in KiwiSaver now as a consequence of the changed savings culture? There are 2.4 million in KiwiSaver—2.4 million. So how can the members opposite bleat whinge and moan that we have not changed the savings culture of New Zealand when we now have 2.4 million people over three times as many—three times as many—as the architect of KiwiSaver promised us back in 2007 when the scheme was launched?But I want to talk about broader superannuation issues. I listened to the radio yesterday and heard the Leader of the Opposition say that it is now Labour Party policy to means test superannuation. I was saying to myself: “Well that sounds a little bit like policy on the hoof.” I could hear the jitters right through Labour’s ranks as it realised that its latest Leader of the Opposition had suffered a severe dose—Kris Faafoi: This Budget is policy on the hoof.Hon Dr NICK SMITH: I am sorry. Does that member support the means test for superannuation? Answer the question. Answer the question. Does the member support his leader’s statement yesterday that Labour wants to means test superannuation? You see what we know is going on is that Andrew Little has a secret plan for New Zealand and he will not come clean. We found out yesterday. We got a window into his ideas for New Zealand. He has got a sneaky plan to change New Zealand superannuation which I know in my electorate in Nelson will see support for Labour further plummeting from the lowest levels ever that it achieved in the 2014 election.You see the problem is that members opposite know how to moan. They are quite good at it. They know how to whinge. They know how to criticise. But they are absolutely blank when it comes to a positive plan to take this country forward. It is illustrated by what has happened with the bills flowing from this year’s Budget. You see they have criticised the support we are providing in our children in hardship package and then voted for the bill.But here is the contradiction. Members opposite cannot vote for a bill that provides for more support for New Zealand’s poorest families in one breath then in the next breath vote against the changes that will enable us to fund that and then in the third breath criticise us because the surplus is not big enough. Well I am sorry it is time for them to go back to primer 1 or year 1 maths. Your numbers have to add up. Budgets are about choices. We are making wise choices that enable us to support those families that are most in need while at the same time being fiscally responsible.My very last point is this. I have heard in this Budget debate the whingeing and moaning about the variation of the Government’s Budget figures that showed that over the last year rather than receiving a surplus of 0.4 percent of a billion dollars we have a deficit of 0.6 percent of a billion dollars—a variation of 1 percent. I would remind members opposite before they give one of those chest-pumping vein-breaking speeches about the evils of that of what happened in Labour’s last Budget. It promised a surplus of $1.3 billion. It actually delivered a deficit of over $3 billion and was out by over $5 billion. That is it was out by 8 percent in its numbers. Bill English was out by 1 percent.Members on this side know the definition of good fiscal management. We are the first OECD country to be back in the black. We have got increasing surpluses into future years—increasing surpluses into future years. That is a fiscal record to be proud of and if any member doubts it I just ask them to have a look across the Tasman where last week the Australian Government delivered a Budget with a $40 billion deficit—a $40 billion deficit—and deficits out into the next 3 years. That just illustrates how well we are doing.The final proof of the pudding is this. New Zealanders know we are doing well. That is why this month for the first time—Hon Damien O’Connor: No they don’t.Hon Dr NICK SMITH: No they do not? Well explain this. Why is it that for the first time in 20 years there are more New Zealanders choosing to come home than leaving? Are they wrong? They are absolutely right. They know that this is a country that is doing well a country that has a plan a country that has a Prime Minister and a Deputy Prime Minister who mean what they say and do what they say as illustrated in this Budget. I am proud to be part of it and part of this bill which is part of ensuring fiscal discipline and the right choices for our country.DAVID SHEARER (Labour—Mt Albert):Would you really believe the numbers coming out of the head of that man Nick Smith the “Minister for Housing Inflation”? Here is a number for you: $800000—$800000. That is the average price of an Auckland home today and that has occurred under that man’s watch. So when he stands up and tells you about numbers do not even believe it. The worst inflation in New Zealand’s housing history has happened under his watch.If there is a Budget that separates this side of the House from the other it is this Budget and it is about “short-termism” versus putting something away for the future. This change to KiwiSaver is exactly—exactly—what I am talking about in terms of good fiscal management. It is about broken promises. Here is a promise I want to read out to you. Here is a promise I want to read out to you: “The $1000 kick-start for KiwiSaver’s members will remain as it is now.”—will remain as it is now. Who said that in 2011? Well the Prime Minister said that—the Prime Minister said that. It is another broken promise.This Government is going down the same track as its ancestors did back in the 1970s when Muldoon came in and killed the superannuation budget that was around then. He pulled it apart. People had accepted it. People believed and knew that that was going to ensure that their savings were protected and that New Zealand would have a pool of investment for the future. That pool if that vandal Robert Muldoon had not pulled it apart would have been worth $280 billion today—$280 billion. The big point about this is not just about the ability to save and to ensure that that is there for the people in the future. It is also about ensuring that that money that $280 billion is able to be invested into the New Zealand economy. It does not require us to sell off our assets. It does not require us to go into debt—and this Government has gone $70 billion into debt. It enables us to invest in our future with our own money. This Government axed that. It poleaxed that.Let us look at what has happened. In the same tradition as the Muldoon Government and the same tradition of not looking at the future and looking at cynical short-term smart alec Budgets what has happened here over the last few years is this Government has gone on and progressively cut and chopped KiwiSaver. Let us go back and have a look at what the legacy of this Government is with regard to KiwiSaver because this is not the only time it has stepped in and had a chop at KiwiSaver and tried to vandalise it. The minimum member contribution—remember that? That was 4 percent. That got cut to 2 percent in 2009. It was a cut. There is the first one.The second one is the member fee subsidy. That was cut in 2009—another cut to KiwiSaver and the incentives of KiwiSaver. Here is a third one: compulsory employer contributions. They were cut by that Government in 2009. That is three—three cuts to KiwiSaver since this Government has been in power. Four: employer tax credits—cut. Employers no longer have an incentive. That was cut and taken away. There are four changes to KiwiSaver that this Government has brought in. Five: the member tax credit—cut by $500 to members who used to get that. That was back in 2012. The last one today that has happened under this Budget is the KiwiSaver kick-start—cut. One thousand dollars has been removed from future generations—and it was given to those guys over there for sure and their families. They made sure that their families got their $1000 before they stepped in and chopped it.They were making a big play over on that side of the House that somehow this is not going to affect the take-up of people in KiwiSaver. Let us face it; KiwiSaver is fantastically successful—fantastically successful. Two and a half million people in New Zealand have signed up for KiwiSaver. Two and a half million people have gone into that system so that they can start saving for their retirement. What does the Inland Revenue Department say about that? In its analysis from people it has asked and the various surveys it has done what does it say? Well here is a fact. The Inland Revenue Department—a Government department—says that 67 percent of members joined KiwiSaver because of the kick-start. Two-thirds of those people joining KiwiSaver voluntarily did so because of the kick-start. This Government—the vandal that it is the “short-termism” that it is—has gone out and removed that and removed that incentive. It is like you have got a successful policy and what you do is you keep cutting and cutting it and cutting it and cutting it until it falls over. Then the Government will blame it on somebody else or it will not be in Government. It will leave it to us to actually have to fix up. This is a travesty. This is a Budget about “short-termism” broken promises and not looking out for future generations.But look do not take our word on how stupid this policy is. Let us take the Financial Services Council’s word. The Financial Services Council chair is Jenny Shipley a former National Prime Minister and what does it say? What does it say about this policy of cutting the KiwiSaver kick-start? Listen to this: “This is like a parent raiding their own child’s piggy bank to pay for a round of drinks already promised down at the pub.” Let me read that again just in case you did not get it clear. This is not coming from the Labour Party; this is coming from the Financial Services Council. “This is like a parent raiding their own child’s piggy bank to pay for a round of drinks already promised down at the pub.” Does that not say it all? It is about “short-termism” looking at what is in front of you smart alec gimmicky little promises and forgetting about what is actually happening further down the road for the future generations.“Raiding the piggy banks”—the council goes on to say—“of the next generation is not the smartest move when the population is ageing. It is a pity that the Government’s failure to manage its own finances will hold back some younger New Zealanders from better managing their own future finances.” In other words not only is this stupid but also it sets an extraordinarily unfortunate example to everybody else out there who says: “Look out for yourself now because who knows what is going to happen in the future.”The issue about retirement policies is that they are about certainty. You invest in them now hoping that everything will be fixed and right in 20 30 or 40 years’ time. When with every single Budget this Government comes in and cuts cuts cuts what people have come to believe is their right—and when they are putting in their money every week on the understanding that there is going to be some sort of nest egg at the end and this Government comes in and cuts it and changes it every single time—then they have no confidence in it. Suddenly we kill what has been a fabulous means of being able to save and being able to invest in New Zealand’s future. This Government is about “short-termism” it is about broken promises and it does not deserve to be sitting on that side of the House.ANDREW BAYLY (National—Hunua):It has been a perverse couple of days I have got to say. We announced a policy of providing $790 million to families in need—and it is a great thing to do for New Zealand families—and yet we have got an Opposition saying: “No we do not want to support that.” Then we have got an Opposition that says: “We should not be removing this $1000 subsidy for the KiwiSaver.” and that it wants to support other people. Then at the same time we have got an Opposition saying that we need to be in surplus. The reality is I just cannot see how the Opposition can make those numbers work. What we are doing is actually focusing on the people who really need it. That is why we are putting $790 million into a scheme that is going to support the people whom normally the Opposition wants to support. We are the ones who want to care for them. We are the ones who want to respect them. It is not only a financial package; it goes with all the other things that we are doing such as the free doctors visits for children under 13. It is also about providing better housing for those families in need. It is about getting better outcomes for the children from those families in need and that is why this Government is so focused on it. I just cannot understand why this Opposition wants to stop all of these good measures that support these families in need. It is disappointing; it is actually illogical.I just actually want to now turn to the KiwiSaver issue itself. As our colleague before just spoke of the original target was to get 700000 people into KiwiSaver. Luckily and with good management and with setting the right parameters we have got 2.5 million people in this KiwiSaver scheme—2.5 million New Zealanders who have invested in it. That is a fantastic thing and I think that we should be celebrating that. But what people do not understand is that there are still very strong incentives to continue to invest in KiwiSaver and to want to join that scheme. I point to the $521 per annum that will be paid automatically by this Government into everyone’s KiwiSaver account when they turn 18 or when they get a job—$521 per annum every year until they retire. The second thing is that there is now another strong incentive for people to want to join this scheme and that is because we have introduced this package of housing measures—the KiwiSaver HomeStart grant package—which means that people should invest in KiwiSaver because they can access more money to get the first deposit to buy their first home. That is why there are still incredibly strong incentives to be involved in this KiwiSaver scheme.I now just want to turn to some advice we received from the other side of the House. I heard these strange figures. If you invested $1000—and I presume that is from when you are born—due to compounding interest I think the figure was that you would get to $140000. I sat down before and did just a couple of little calculations and I am just struggling to make it work. Let us assume that from year zero to 65 years old we are averaging say a 5 percent per annum return. I realise that because of the wonderful management of the New Zealand Superannuation Fund we are achieving 10 percent but I have used the figure for the long-term run average of 5 percent. Actually if you used discount rates and things you are normally work about 6 percent but anyway at 5 percent do you know what the figure is? It is certainly not $140000. If you invested the $1000 at day one it would actually be worth about $23600 over 65 years. That is just a far cry from what I heard from over on the other side.Look the reality is what we are doing with that $1000 is diverting it to the people who we believe need it most. I just cannot understand why anyone in this House would want to sit there and shout out and decry what this Government is doing. This is about a Government that cares about families and that has done concrete things to make it achieve those things that will improve the lifestyle of these people create jobs and give them the dignity and the respect that they deserve. I commend this bill.A party votewas called for on the questionThat the KiwiSaver Budget Measures Bill be now read a second time.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Bill read a second time.In CommitteeClause 1 TitleDr 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.TRACEY MARTIN (Deputy Leader—NZ First):Kia ora and thank you Mr Chair. I will take just a short call on the KiwiSaver Budget Measures Bill—just around the title of the bill. New Zealand First would like to offer some more appropriate alternative titles. Let us start with the “I’m All Right Jack Bill”. This is a Government that has forced beneficiaries into budgeting services so that they can better manage the little amount of money that they have and so they must go into budgeting services when they go to seek food because they are so desperate. This is a Government that does not understand the maths of its own Budget. This is a Government a member of which stands up and says: “I actually can’t make the numbers work.” and yet this is the bill it has put on the Table. Also the reason why “I’m All Right Jack Bill” would be a better title for this piece of legislation is that every member in this House has a substantial contribution from the taxpayers of New Zealand to their KiwiSaver accounts. How about we did not have a look at cutting that. How about that instead of taking this incentive from the everyday New Zealanders who require it and from the young people who are going to come into the workforce ongoing? To say that people are not going to sign up to KiwiSaver ongoing just does not make any sense when we continually have young people growing up and joining the workforce. For goodness’ sake! Think it through before you bring legislation to the House.Here is another one. Here is another title: the “Chop Our Nose Off to Spite the New Zealand Public Face Bill”. No matter what we are going to get into some sort of—an artificial—surplus. I will take a bet with you Dr Clark. I will take a bet. I will bet that this Government will not reside on those benches long enough to get into a real surplus—a surplus that is actually real. You and I—a bottle of lovely red wine that my husband produces. If I lose that bet it is on you. Here is another title that we might like to consider: the “KiwiSaver Blind Ideology (Surpluses At All Costs No Matter What It Does to the New Zealand Public) Bill”. How about that? Listen to the maths. I actually noticed that there was silence for a moment there when Fletcher Tabuteau who knows what he is talking about went away and did the maths. Mr Woodhouse has not done the maths and neither has any other member on the backbenches. I would actually suggest that it was very interesting that Mr Bishop remarked how many members of the Government benches there were down here today in the daylight actually talking or being around here for this very important bill as they stripped away an incentive from the New Zealand public from the young people who are going to come into the workforce and are going to join that scheme. So I suggest that the New Zealand public go and have a look at 8.35 p.m. 9.35 p.m. 10.35 p.m. and 11.35 p.m.—go and check out Parliament TV from last night and just tie that in with the comments that Mr Bishop made earlier today.Here is another title: the “KiwiSaver (I Don’t Know What I Stand For But My Whip Told Me To Vote For It) Bill”. This is what we have here. This is actually an incredibly important piece of legislation that has major downstream effects for the New Zealand family whether it be through the economy side of the New Zealand family or for each individual New Zealand family or each individual New Zealand worker. There are downstream effects of this for money flowing back into New Zealand and New Zealand being able to invest in itself the New Zealand family being able to back itself with its own money as opposed to seeking overseas money. This Government is very good at saying that New Zealand needs more investment. We agree. We would like to see New Zealanders being able to back themselves and long term this is exactly what this fund has done. But not only has this Government decided to strip away the incentives at the start of the scheme for any young person who wants to join up it has decided that you can now rip your contribution out. Instead of the purpose the scheme was made for you can rip it out and go and buy a house with it. So basically what the Government has done with this bill is again it has removed its responsibilities and its obligations to manage the economy wisely. It has decided that it is going to put this back on to the New Zealand public and the New Zealand public needs to be aware of it.CHRIS HIPKINS (Labour—Rimutaka):This is where the Budget spin starts to become unravelled because although the National Government in its Budget on Thursday proclaimed that it was going to do something for New Zealanders who were feeling left behind for New Zealanders who were struggling to get ahead the reality is when you break it down when you get through the spin this Budget actually penalises those people some more.So let us look at some real examples of real people who might be affected by the changes in this year’s Budget and let us take someone who is on an unemployment benefit for the average amount of time. Bear in mind that despite all of the rhetoric people are typically on the unemployment benefit for less than 6 months at a time. You might not know that when you hear the rhetoric about the unemployment benefit but the average person who has one is on it for less than 6 months.So let us assume that they are on the unemployment benefit for 6 months and they have children. They would benefit by about $650 from the changes that the Government has proposed to increase their benefit. Let us say that they then get a job and this is the first time in their life that they have a job with sufficient income to sign up for KiwiSaver they lose a thousand bucks. That is the reality. So the National Government gives them $650 with one hand and takes $1000 off them with the other. That is the reality. Break down the spin go through it and then you work out that actually they are not going to be better off; they are going to be worse off under the Government because it is giving a small amount with one hand and taking a larger amount with the other. That is the reality and there are everyday New Zealanders who will be in that position.When members on the other side of the House talk about beneficiaries they only ever talk about the people who are on a benefit for a long time and they neglect to tell the public every time that the vast bulk of New Zealanders who rely on some form of benefit do so for a short period of time. It is a stop-gap measure for them when they find themselves in hardship and this Government neglects to tell the public about that. It is happy to stereotype people living on benefits when actually the vast bulk of people who are on a benefit are on a benefit for a short period of time. They will be penalised by this because they will lose the opportunity to get the $1000 KiwiSaver kick-start and I think that is wrong.I think it is wrong that somebody who signed up their child to KiwiSaver on Wednesday gets $1000 and somebody signing them up on Friday does not. That is simply unfair. It is unfair that the Government did not signal this. It was never promised in its manifesto. So New Zealanders had the comfort of knowing that at some point in the future if they found themselves in a position to join up to KiwiSaver that kick-start would be there. Had they known had the Government had the decency to give them warning they could have signed up and got the $1000 kick-start. The Government knows that because if it did not we would not be here under urgency backdating this legislation to Budget day and robbing all of the New Zealanders who are not in KiwiSaver of the opportunity to sign up and get the $1000 kick-start.Let us just be clear here. The people who are in KiwiSaver now are more than likely to be in middle and upper income brackets. It is the people in the lowest income categories who struggle to get into KiwiSaver and yet that is something that I know they aspire to. Aspiration used to be something that the National Party was proud of. Now if someone is on a low income and aspires to be in KiwiSaver they are kicking them in the guts by taking away the $1000 kick-start that middle and upper income earners benefited from.This is another kick in the guts to people on low incomes and to future generations of New Zealanders. To the tertiary graduates who will be leaving university or polytech or their apprenticeships and moving into full-time fully paid employment for the first time signing up to KiwiSaver—they have lost the $1000. And of course we know that tertiary students continue to be hammered by this Government as well. It is simply unfair.The National Party hated KiwiSaver from the beginning. It was a package of measures that John Key called communism by stealth. Let us not forget that. When Working for Families and KiwiSaver were introduced by the last Labour Government a Government that I should remind people produced nine surpluses in a row to National’s seven deficits—when we used those surpluses in the good economic times to introduce KiwiSaver to save for the future to boost family incomes through Working for Families to reduce the burden on students by having interest-free student loans John Key railed against those policies and called them communism by stealth.National hates KiwiSaver and that was absolutely evident from the very first moment it became Government. What did it do? When National first became Government it cut the member contributions. That was cut No. 1. It then cut the member fee subsidy of $40 per annum. That was cut straight away. It cut employer contributions. This all happened straight away. National halved the size of KiwiSaver straight away in its first Budget and it ceased to provide the employer tax credit. Those four cuts were all made in its first Budget. Those were the first of the KiwiSaver cuts made by the National Government.But then the Government came back in 2011 and it had another go. It halved the member tax credit in that year as well. This was yet another cut. And then it made further cuts to KiwiSaver and now this is the latest one. Eight cuts all up this Government has made to the KiwiSaver scheme since it came into office.This is a Government that hates KiwiSaver. Yet Bill English knows in his heart of hearts and they all know in their heart of hearts that New Zealand still has a savings problem. Anybody looking at the wider set of New Zealand’s accounts knows that we are spending more than we are earning and that that has been the case for a very long period of time. KiwiSaver was one of the measures introduced to try to curb that to try to get New Zealanders saving more. It was a good measure and it still is a good measure and I am pleased it is still there. But we should be looking at getting more people into KiwiSaver and putting more money into KiwiSaver because it is a key part of making sure that New Zealanders break even and make ends meet.We heard a lecture from Nick Smith about the Opposition not being able to get their numbers to add up. This Government has not managed to get its numbers to add up for 7 years because if they did add up we would not be in deficit. For 7 years its numbers have not added up. The Government has been in deficit every year. What does that mean? It means borrowing. National has been borrowing every year that it has been in Government. It has been contributing to the problem of New Zealand as a country spending more than it earns. We have to deal with that and Bill English knows in his heart of hearts that that is a challenge for New Zealand. So why is it that time after time he comes to the House and proposes cuts to one of the few things that we are doing that is designed to turn that round and to increase our savings rate?Then of course we have got the Government saying: “Well actually you can cash up your KiwiSaver for your first-home deposit.” That was something that the Labour Party has supported as well. But is it not sad that we have reached that reality now where New Zealanders even if it they cash it up cannot afford to buy a first home? Those in the middle-income brackets who can are having to face a trade-off between saving for their retirement and buying their first home. I think that is a tragedy. I think it is a short-term stop-gap measure. It is good—it is a good way to get people on to the property-buying ladder but long term we have got to look at other things. We have got to look at ways that people can own a home and save for their future. Furthering KiwiSaver by making sure that there are good incentives to join by making sure that we are increasing contributions to KiwiSaver—whether it be through Government contributions employer contributions employee contributions and the like—will all make New Zealand a richer country in the long term. Instead what we are seeing with the current Government is that it is content to manage things for today and not plan ahead for the future.So many of the things in this year’s Budget are designed to create the illusion of doing something but they do not. When you break down the spin when you look at it they are not actually helping the people they claim to be helping. I want to just reiterate that point that I made that for somebody who is moving off a benefit and into work if they have been on a benefit for 6 months—which is about the average time that someone is on an unemployment benefit—they would have benefited by $650 through the increase in benefits and that is great. I think that they would enjoy that and I think that they would find that as a welcome relief. But when they finally get into work and they finally get to join KiwiSaver for the first time they find that not only is that $650 taken away from them but another $350 is taken away as well because they lose the $1000 KiwiSaver kick-start that they otherwise would have got. That is the reality. So let us break down the spin. Give a small amount with one hand take a larger amount with the other hand—that is the reality of what the current Government is doing.KiwiSaver is a good scheme. The kick-start has resulted in a whole heap of people joining KiwiSaver. Removing the kick-start penalises people who for whatever reason—Joanne Hayes: I raise a point of order Mr Chairperson. The member is not even addressing the clause—the title.The CHAIRPERSON (Hon Chester Borrows): The debate on this clause is wide ranging. It will continue to be wide ranging for some time yet. When we get into the other clauses they are much narrower and so that will be enforced most closely.Hon Michael Woodhouse: As I understand it there was no leave sought for these clauses to be taken as one question and traditionally in the Committee stage of the House the title part of the bill is at the end of the Committee stage not at the start which does of itself form something of a wind-up. But in this situation we are debating clause by clause—CHRIS HIPKINS: 114/7—read it.Hon Michael Woodhouse: —and my understanding is that that requires the member to stick to that clause.The CHAIRPERSON (Hon Chester Borrows): I do not need any further help with this. In spite of the unlawful interjection I do draw the member’s attention to Speaker’s ruling 114/7. Because there was no select committee process on this bill the convention is that this is a wide-ranging debate. It will continue to be no doubt for both sides of the Chamber who may want to seek the call. Chris Hipkins has 20 seconds.CHRIS HIPKINS: Thank you and I intend to use every one of them. I will be very brief. KiwiSaver is a good scheme. The kick-start was a good way to get people in it. We should not be penalising people who are not in it now but who aspire to join it. We should be encouraging them to join KiwiSaver. It is wrong that the Government is taking away this kick-start and it is wrong that it has not foreshadowed that it intended to do so.CLAYTON MITCHELL (NZ First):Just on the point of order that was just mentioned before by Mr Woodhouse I think I will start with the naming of this bill. I think this Government loves to use acronyms that confuse most of us out there in the real world who understand what the real world is about. I have got an acronym here that I think sums up this piece of legislation: the “OMG YOLO #nofuture Bill”. I know everybody back home the younger ones particularly will totally get what I mean because this bill gives no future to our New Zealanders who need this future the most.I have many times stood up in this Chamber and said that New Zealand First is not in the game of opposing bills that the Government puts forward if they make sense. If there is any sense to a piece of legislation New Zealand First will support it.Matt Doocey: Sit down then. Sit down.CLAYTON MITCHELL: Just to that Matt Doocey let me say that we supported the Telecommunications (Development Levy) Amendment Bill yesterday because that makes sense. On this bill however we could not even get a furthest widest-ranging view to conclude that this is good for the future of New Zealand. This bill is absolutely against what this country should be standing up for—the people’s future.In 2006 the Labour Government came up with the KiwiSaver legislation which gave Kiwis a $1000 kick-start incentive to get them thinking about their future. I took advantage of that and I am sure everybody on the other side of the House took advantage of that even if they were not in politics because it made sense to. It does not matter what compounding interest rate you are going to be using there Mr Bayly. Whatever that is whether you want to make it 5 percent under your calculations and say it is going to be only $24000 or whether we are going to be using 10 percent—and let me remind you 10 percent is conservative at the moment when the AMP KiwiSaver investment scheme is averaging out at 16.8 percent at the moment.I know this because I have just changed mine into a bit more of a dynamic fund. It is getting 10 percent so it is going to give you a heck of a lot more even if it is $100000—that is $145000. You are taking money away from Kiwis. It is short-sighted for the future of New Zealand. I have to say Mr Bayly that you justify it by saying that even $23000 is not enough. I dare say that when you retire at 65 years old $23000 will go a long long way.We have heard from people emailing and calling us over the last few days. I would love to say I had got some faxes but we do not have fax machines anymore. We have actually moved into the 21st century.Iain Lees-Galloway: Really?CLAYTON MITCHELL: I do not do the fax thing no Mr Iain Lees-Galloway. My father does and if he could he would send me smoke screens. He does not even text. The point is that we have had Grey Power come and speak to us with some serious serious concerns. This population that we are currently living in is like an hourglass population. There is a very very bulbous population of ageing people at the top a very very skinny working class of people—those who are of the age to work—and a very very large bulbous group of young people coming into the workforce.The point is that we should be thinking long term now. I know Mr Matt Doocey that you are trying to create your perfect life there but this is a very serious curve that we are talking about—[Interruption]—and I apologise to the people at home who just got an earful of me hitting the microphone. But seriously if we do not start thinking about the future and get this Government to rethink this legislation and the way that it votes we are going to have this population who are now currently working starving on the streets with very very little money to support them. I am sure Mr Chair that you have got some investments that would make—The CHAIRPERSON (Hon Chester Borrows): Do not bring me into this.CLAYTON MITCHELL: I apologise. The point is that if we do not think about the future of our New Zealanders now and bring this legislation back into the fold then we are going to have some grave concerns for the future. I had a phone call from a gentleman who is a constituent in Tauranga. He has also contacted the local Minister from Tauranga to put his concerns forward. He was right in the very stages of signing up his three children aged 4 6 and 9 years old to the KiwiSaver programme—we are talking about filling out the forms to get them sent in. But this retrospective piece of legislation which takes effect going back to Thursday of this week stops his ability to get his children signed up. In fact just last week my wife and I were talking about the same thing for our three young children—that we should be thinking about getting them signed up.How many New Zealanders are missing out because of this quick fire from the hip? The Government is shooting down the legislation pulling the carpet from underneath their legs and not giving them the time they require to ensure that they have the means to put that into place. Two years would not be unreasonable. When you look at all the legislation that is coming through now and the 2 to 4 year time period for the implementation of the legislation that would not be unfair. In fact there is an amendment on the Table in the name of Mr Fletcher Tabuteau that actually if it could get support might be a little more palatable than cutting the legs off before we have got the chance to actually speak to it. We strongly hope that this Government reconsiders this motion. To that end we understand the fiscal constraints of any Government. This Government with its bad budgeting over the past 7 years is clearly having some issues with getting the books to balance up so we understand that some cuts need to be made. But it is a zero-sum gain. When you are giving $25 a week to the people who need it the most—and hey look at the end of the day a little bit helps; I do not think it helps enough I think GST off food would help far more of our poor starving and impoverished people than giving them a $25 a week handout. Taxing food to me is just obscene. But at the end of the day the Government has given that and well done for that but taking away from their future is absolutely crazy thinking.I would like Government members to reconsider what they are doing there because if they even thought about looking after the fiscal constraints and reducing the $1000 kick-start to even $500 in 2 years’ time we could probably understand that—decisions need to be made. But what about the uncollected taxes? Again I will give credit to the Government where credit is due: in the latest Budget it has just put $74 million to increasing its ability to actually go out and get the tax that needs to be collected. Twenty-nine million dollars 40 percent of that $74 million is going to specifically target those people who are using their housing schemes their residential properties and that will increase the tax collected.The rest of that money should be going into corporate tax evasion. The very wealthy in this country—we are talking about people who have got hundreds of millions of dollars—are gloating that they pay only 12 to 15 percent tax when the rest of us are paying more than our fair share. And why should we not pay our taxes? We owe it to society. The money that at the moment is sitting in the red is about $7 billion—$7000 million in uncollected taxes and if this Government spent some of that money to go and collect we could actually afford to do both—$25 a week as well as a KiwiSaver kick-start. It makes good economic sense for the now and it makes good economic sense for the future.We do not support this bill in its current form and we would like to see this Government change the way it is thinking about the future of New Zealanders. Thank you.KELVIN DAVIS (Labour—Te Tai Tokerau):I would just like to take issue with my own colleague Chris Hipkins because towards the end of his speech he said that KiwiSaver is a good scheme. Let me tell you this: KiwiSaver was a good scheme. It was a good scheme in 2006 when Michael Cullen had the courage to set up a far-reaching scheme with a vision for the future. But what has happened? All we have seen under this Government is KiwiSaver get cut cut cut cut cut. Eight cuts we have heard of today.There was the minimum member contribution cut. That has been taken. The member fee subsidy—that has been cut. The employer tax credit—that has been cut. Compulsory employer contributions—they have been cut. The member tax credit—that has been cut. And now the $1000 kick-start—that has been cut. We have a member on that side of the Chamber saying they will still be able to get $521 in annual payments. I just query how long before that $521 a year is also going to be cut. The KiwiSaver scheme has been absolutely gutted.The Government lacks vision. They lack courageous policy. The KiwiSaver policy was far-reaching. It was going to help our generations into the future and that is why I say that this bill should be named the “Dismantle Our Children’s Future Bill”. It is just dismantling the future so that people can scrape by in the present. It is doing nothing at all to look after future generations. This is terrible.We had Nick Smith sitting over there. He was throwing figures around facts and figures. He is trying to make himself sound intelligent and then he says that New Zealand is the first country to get into the black. I was sitting here and on Thursday I am sure I heard the Minister of Finance say that we are still in deficit. I am positive that is what I heard. Two days later Nick Smith is standing up and saying we are in the black. He does not even know his colours let alone his figures and that is why I resent that party over there standing up and saying that this side of the House does not know what we are talking about when it comes to the economy. It is an absolutely shameless distortion of the truth to hear these people say that they know what is good for the country.National has absolutely gutted KiwiSaver. This bill should be called the “Money-Go-Round Bill” because all it is doing is taking from this side and giving it over here. There is absolutely no long-term vision. This is just about living in the present. The difference between our side of the House and that side of the House is that we do not only live in the present; we live in and think about the future. We think about the future and our kids and we know that there are going to be more good moments in the future not just living here and thinking about this moment in time just to make ourselves look good in this moment in time. It is about thinking about the future.Working for Families was thinking about the future. And as we have heard John Key was the man who said this is communism by stealth. That party over there is taking credit for our policies. That party over there is taking credit for what this side of the House did those years ago. KiwiSaver—those members are saying there are 2.5 million people on KiwiSaver. And it is just more popular than ever—well it is more popular because it was a courageous policy from this side of the House and now National members are taking credit for it. They live in the past; we think about the future. They are taking credit for what the last Labour Government did in 2006. That is because Labour always thinks about the future. Labour thinks about what we are going to do to make the country better off in the future. These guys are just worrying about the next Budget.Five hundred and twenty-one dollars a year—I would say that is going to go from KiwiSaver in the next Budget. And we are going to have the ninth cut to the KiwiSaver policy. National is just making things worse for the future. It has absolutely no idea about how to make the lives of our children better off. This is a panicked knee-jerk reaction—JACINDA ARDERN (Labour):This is our opportunity in this part of the debate on the KiwiSaver Budget Measures Bill to talk about what we believe this bill should be called. The most obvious thing from my perspective is that if this bill were really speaking the truth it would be called the “Widening Intergenerational Inequality Bill”. It feels like Groundhog Day for me to be in this Chamber yet again debating another measure to cut the savings base for New Zealanders in this country.Chris Bishop: It feels like that for you? Goodness me.JACINDA ARDERN: I still remember Chris Bishop my very first Budget in this House when that National Government made substantive changes to KiwiSaver. I remember vividly walking outside to the Noes lobby and seeing Michael Cullen sitting on the couch there with this absolutely devastated look on his face. All of the work that the Labour Government had done to build up savings in this country to make sure that New Zealanders had a nest egg that meant that they would not just scrape by on a pension but have quality of life in their old age—in one fell Budget that Government gutted it. I remember that Budget to this day. National has done it eight times since—and that is just during my time in this House. That is not to mention what National did under Muldoon to devastate the potential that we had in New Zealand to have a massive savings base.We talk about the gap between New Zealand and Australia—that is when that gap started. The Australians made the sensible decision to have a decent superannuation scheme across the entire population and we had that opportunity under Kirk. But once again National demonstrated its short-sighted approach when it comes to savings and it gutted them. They absolutely gutted them. Everything that we have been doing since then has been to try to regain that ground. And again here we are with another demonstration of the fact that that Government is absolutely disinterested in what it is doing for future generations. It is not just savings. It is housing where we have a generation of renters. It is education where student loans are mounting for the next generation. And it is even things like climate change.If that Government wants to prove that this bill is not about intergenerational inequality that it is not about their having more than what the next lot will get I challenge just one of them to stand up and say that they did not take the $1000 KiwiSaver kick-start themselves. Because that is what we are cutting today. We are cutting something that I would almost guarantee every single one of the MPs on that side of the Chamber took up. We did—we did. We put it out there and said that it was for everyone who joins. Did that side of the Committee do the same? I challenge just one of them to say that they did not because if all of them did then they are absolutely depriving everyone else of something that they benefited from. I also challenge members on that side of the Committee to stand up and tell us—give us a guarantee—that they did not tell their kids to sign up before they took it away as well because that is what we are debating today. This bill will stop anyone else from getting that $1000 kick-start contribution which we know so many would have taken.In my short time available I also want to point out that this bill starts from the time that the Budget was passed and yet how long are we waiting for $25 a week to go to beneficiaries? It is not happening until next year. So we take immediately and we leave everyone else to wait until they can gain that kind of small amount of money.This is a bill that should be renamed the “We Choose Sticks Instead of Incentives Bill because this bill was always about incentivising people to join KiwiSaver. But we know that that side of the Committee never wanted people to join. And where is the evidence of that? Well I have got a little article here from the New Zealand Herald dated 1 March 2006. When Michael Cullen introduced the idea of KiwiSaver he said that it was his aspiration that 25 percent of workers join it and things like the kick-start contribution were there to motivate people to do that. What was the National Party’s response to that? The National Party members’ response to that was to say that they thought he was dreaming. They said in 2006 that Michael Cullen was dreaming that people would join up at a rate of 25 percent. Well how many do we have now? We have 2.5 million people in this scheme. That Government never wanted Kiwis to have KiwiSaver.Hon ANNETTE KING (Deputy Leader—Labour):I have to say we started off this morning with a very spirited debate from the members opposite defending the indefensible. I have to say it was such a good start that the Minister who is in charge of this bill the Hon Todd McClay did not know he was in charge of it and tried to move it in somebody else’s name.We have had to listen this morning to National members sitting opposite crowing about how great they have been to beneficiaries and the payback is because they are going to take it off KiwiSaver. They said: “We are the first Government in 43 years to give money to beneficiaries.” What they forget is that they were the first Government in 43 years to cut the benefits to beneficiaries—to cut the benefits to beneficiaries. They have forgotten about Ruth Richardson and the “mother of all Budgets”. That has all been glossed over. When we brought in Working for Families that was communism by stealth! Have they got rid of it? No they have not. They just fiddle around the edges of it. When we brought back income-related rents which helped those on the lowest income they opposed it. When we brought in 20 hours of free early childhood education they opposed it. The one that I really like because we have had to listen hour after hour to Paula Bennett speaking on it is that we kept the training incentive allowance to help people get off the benefit but she took it for herself and then canned it. This is another example of National members taking what they can for them and taking it off others. That is exactly what is happening with KiwiSaver today.I wonder whether National has any idea of how many people under 18 have signed up to KiwiSaver. The latest figure we have got from 2013 is 352600 young people under 18 have signed up to KiwiSaver. So we have got young people signing up. Why were they signing up? Not because they were necessarily in work; most of them were not. They signed up because they had the incentive of the $1000 that was going to be there for them to build on when they became KiwiSaver contributors. They had the $1000.What National has forgotten is that there are going to be more babies born. It is just a fact of life. There are going to be about 60000 children born every year in New Zealand in the foreseeable future. They might have wanted to join up to KiwiSaver. Maybe their parents might have liked to join them up to KiwiSaver. I challenge the members opposite—just one of them—to say that they did not sign their children up to KiwiSaver. Well I wonder whether the member himself took the $1000 for KiwiSaver. Would he like—[Interruption] He cannot remember. Well that is always a sign that you did. So he cannot remember.Hon Michael Woodhouse: I did.Hon ANNETTE KING: Oh he did take it. So why would the Minister in the chair take $1000 for himself and deny it for future generations for our kids for those who have not yet joined KiwiSaver? It is a pretty mean-spirited approach.Government members say we have to do this to pay for the beneficiaries. Are we not generous? Well just go back and think National members. If you had not given billions of dollars away in tax cuts to the wealthiest which included everybody in this Committee you would have money to give to beneficiaries you would have money to invest into our regions in New Zealand and you would have money to invest in jobs. But you saw that you ought to give it to the top 10 percent of New Zealand and then we did not have the money for beneficiaries. We did not have the money for health. We did not have the money for a whole lot of things.I wonder whether the members opposite can remember the promises their party made in 2008. I have to say you are meant to believe the word of a Prime Minister. The Prime Minister then in Opposition said National would retain the policy. There would be no radical changes to this policy. There were eight cuts to the KiwiSaver scheme in the 7 long years National has been in Government. That is one for every year and that is on a solemn promise that National would not change this scheme radically. I have to say I would actually rename this bill the “Fess Up to Chicanery Bill” because that is exactly what this is. The Government makes promises and then breaks them. It tells the people that it will do one thing and then it does something quite different.Hon MICHAEL WOODHOUSE (Minister of Immigration):I find myself drawn into the debate in a way I did not quite expect simply by putting up my hand and saying that my own children are not in KiwiSaver but I am. That is fair enough. Yes I thought as the chief executive of Mercy Hospital in Dunedin that all of my staff regardless of whether they were doctors at the top end of the salary scale or our lower skilled workers should take up KiwiSaver but the question and the thesis we have now is whether or not the incentives have been destroyed. The simple challenge that the members opposite have made is that every single member of the National caucus should give the $1000 back. So here is my challenge to them: if they are so principled about the changes that this Government has made I want every one of them who are currently paying the 39 percent top marginal tax rate when they do not have to to put their hands up—but they oppose that tax cut. So if they can say that they refused the benefits that this Government imposed that they were so principled that they continue to pay the 39 percent top marginal tax rate I will pay my $1000 back. I will write the cheque today because what is good for the goose is good for the gander.I want to come to Mr Tabuteau because Mr Tabuteau is the one sensible rational New Zealand First member who has half an ear on economics. I understand he lectured in economics but he is very tricky about those numbers. I like Mr Bayly the very smart fellow chartered accountant on the National caucus was fascinated by the use of the 10 percent rate of return. What is really interesting is that if you do get the excel spreadsheet out and calculate the future value of that lump sum using a 10 percent hurdle rate in the 50 years that Mr Tabuteau described between the 15 years and 65 it is indeed nearly $118000. Except what Mr Tabuteau forgot was that people have to pay tax. Maybe he does not but that 10 percent rate of return is a gross return. We know that the long-run rate of return in investment schemes is not 10 percent because there are hard times not that Mr Cunliffe would have told you that when he said that we should have been borrowing to invest in the New Zealand superannuation scheme. He never said that. In fact if he was such a genius about how to predict the market why in 2007 did he not trot along to the good Dr Cullen’s office knock on his door and say: “Guess what Mike? I think the rates of return are going to drop. We should pull out of those equities and go into fixed interest before the super scheme plummets.”?The simple fact is we cannot. Over 50 years there are good times and bad times. So the long-run rate of return at an after-tax pay rate of say a generous 6 percent in those 50 years is $18000. It is not to be sneezed at but it is not $118000.Hon David Cunliffe: You’re a medical doctor not a PhD.Hon MICHAEL WOODHOUSE: I am a chartered accountant Mr Cunliffe. Here is what else he did not say. The future value of the $175 million annuity which is the investment the Government would have to make if the Labour Opposition kept it—and that is fine; it has that prerogative to campaign on that—at the same 6 percent rate of return is $54 billion. So we take away the $18000 future value of that initial investment and we burden those 15-year-olds with an extra $54 billion of debt because we do not have cash in the bank to pay that $1000. We would have to borrow it. If we use the Government’s average interest rate of about 6 percent that is an extra $54 billion burden that this Opposition would have us have. It only knows how to borrow spend other people’s money and tax. Just remember it knows how to tax people but it is not so principled that it would pay the 39 percent marginal tax rate. I will get my cheque book out and I will write that $1000 cheque when one of them—one of them—can demonstrate that they are paying a 39 percent marginal tax rate.The CHAIRPERSON (Hon Chester Borrows): It is going to be a long day. I note that last night we were tired and giggly. Today I would like us to not get tired and scratchy. I can assure the members on my left that I heard their cunning and clever interjections the first 15 times they repeated them. Just remember the directions of Speaker Hunt that interjections are rare reasonable and hopefully witty. I look forward to those colourful comments through the course of today into tonight next Monday or however long it takes. If you just manage to match the noise levels speaker to speaker I am sure we will progress very well through the business of today.IAIN LEES-GALLOWAY (Labour—Palmerston North):Let me start where the Minister left off. The Minister said that members on this side of the Chamber only know how to borrow. That is from a Minister of a Government that has been in Government for 7 long years and has borrowed for every single one of those 7 years. There has been $83 billion worth of debt amassed by that Government over there and it has the temerity to lecture this side of the Chamber the parties that ran the Government that got New Zealand into a zero net debt position for the first time in our history that ran 9 years of surplus 9 nil. That side of the Chamber cannot lecture us about borrowing because all the Government knows is how to borrow. It borrows so that it can afford tax cuts for its rich mates. That is what it borrows money for—so that it can afford tax cuts for its rich mates.The title of this bill is the KiwiSaver Budget Measures Bill. I wonder whether any of the people who have come along and are sitting in the gallery on a Saturday morning watching this would have any idea reading that title what the KiwiSaver Budget Measures Bill actually does. This title tells us nothing. This Government is perfectly capable of giving bills titles that tell us what they do. We had the Anti-Money Laundering and Countering Financing of Terrorism Bill. That told us what that bill was pretty much about. We had the Crimes (Match-fixing) Amendment Bill. I think we all knew what that one was about. Even the rather dry Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill gave us a pretty good hint of what that bill did. I could probably spend hours reading out names of bills but I will not do that. The thing is what the Government does is it gives a bill a title that is meaningful when it is proud of it. The Government is not proud of this bill because it is hiding what the bill really does by giving it the driest most bland title that would not give anybody outside of this House the slightest hint of what this legislation does.I have got a better title. I would call this bill the “KiwiSaver Cut Bill (No 8)”—the “KiwiSaver Cut Bill (No 8)”. Because what it does is it implements the eighth cut to KiwiSaver that has occurred under this Government in less than 7 years—eight cuts in less than 7 years—although we are not that surprised because members on that side of the House hate KiwiSaver. They hated it when it was first brought in. They hate the idea of people in New Zealand saving for their future.It was the National Government under Muldoon that got rid of the Kirk Government’s superannuation scheme. This country would be unrecognisable to us today if that superannuation scheme had remained in place. We would not be so desperately reliant on foreign capital if that superannuation scheme had been left in place. But the National Party does not think of the future. The National Party never thinks of the future. The National Party is always worried about the next Budget and the next election the here and now. There is never a plan. It is always about how to retain power.Why is this the “KiwiSaver Cut Bill (No 8)”? Well cut No. 1 was to reduce the minimum contribution rate from 4 percent to 2 percent. What did the Government tell Kiwis at the time? It said: “Oh we are putting more money in your bank account by cutting your contribution rates from four percent to two percent.” That is actually like telling someone that you have taken money out of their savings account and put it into their cheque account and that you have given them more money. Actually it just shows that the only way this Government can think of getting more money into people’s bank accounts is not through economic growth is not through wage rises; it is from stealing from their superannuation scheme and putting it into their cheque account. That is the sum total of this Government’s plan.The second cut was to the member fee subsidy—$40 per annum. That was just a little sweetener to make sure that the fees that are charged by the outfits that run the KiwiSaver accounts did not eat away too much at your KiwiSaver savings. Of course the Government’s second cut was to remove that.The third cut was to cap the compulsory employer contributions at 2 percent. Again this was saying to employers that the Government wanted them to be able to hold on to more money not through growing the economy not through ensuring that businesses’ consumers had more money in their pockets so that there was more demand for their goods and they could employ more people and pay them well. No it was by taking money out of people’s savings accounts and putting it into the employer’s accounts.JAMES SHAW (Green):I also have a suggestion for the title of this bill which is that we amend it from the KiwiSaver Budget Measures Bill to the “KiwiSaver Arbitrary Budget Measures Bill”. I say “arbitrary” because there does not yet seem to be much reasoning behind the move to remove the incentive.I just wanted to thank the Minister Michael Woodhouse for his contribution earlier because it was the first contribution from a member of the Government side that actually included facts. I found that very helpful. It included actual information and actual facts. However it simply reinforced the Government’s case that this is all about cutting costs reducing the deficit and so on. I wanted to pick up on one point with that but then I also wanted to restate some of the questions that I asked earlier on in the debate and to invite Mr Woodhouse to take another call at a later stage to respond to some of the specific questions that lead me to the idea that this is in fact an arbitrary bill. First of all he mentioned the 39 percent top tax rate before. When National first came to Government it reduced taxes for the wealthiest people in society which has left a hole in the accounts of about $1 billion a year. That would have covered the deficit and it would have allowed us to continue this scheme.The questions that I asked earlier that I have not yet received an answer for are No. 1: New Zealand is 22nd of 24 OECD countries for savings. Cutting the KiwiSaver incentive reduces the savings rate. What is the plan to increase savings? The second question is: the ANZ chief economist says that removing the KiwiSaver incentive will reduce the rate of take up. What is the plan to maintain or increase the rate of take up? Three: did the Government consider leaving the kick-start contribution in place for say 6 or 12 months in order to incentivise those currently not in the scheme to get into the scheme or to give people who are currently processing paperwork a chance to actually get it completed? Four: how does reducing the KiwiSaver take-up rate impact the intergenerational equity of today’s working parents paying for three generations’ worth of costs? How does it deal with the change in the dependency ratio from 7:1 today to 2:1 in 30 years’ time?The fifth question is: the Government is reducing a short-term deficit by raiding New Zealand’s retirement schemes—again. What is the Government’s plan for long-term financial sustainability? Six: why cut the kick-start contribution rather than the member tax credit given that we know that the kick-start contribution is the incentive that people actually know about and is the thing that actually gets them into the scheme? Reducing or removing the member tax credit would actually achieve the Government’s goal more substantially because it is the more expensive part of the scheme but it would leave in place the incentive to get into the scheme which is the most important thing.As yet during the course of this debate I have not heard responses to any of those questions and that leaves me in the position of simply having to oppose this otherwise arbitrary bill.MELISSA LEE (National):I move That the question be now put.KRIS FAAFOI (Labour—Mana):It is a privilege to speak on clause 1 I think it is of this Committee of the whole House stage. This is an opportunity for some members on this side of the Chamber to have a bit of fun with the title. My colleague Iain Lees-Galloway has come up with a few interesting titles but mine is quite a mundane title. This bill should be retitled the “KiwiSaver (Reduction and Privilege) Bill” and for the benefit of the Committee I am going to use the acronym to make things easy—the “KRAP” because that is what this is. The “KRAP” is a mean-spirited bill that takes away saving opportunities from our young people. That is essentially what this bill does. The “KRAP” will basically take money from those people who have not yet signed up to KiwiSaver and from some of our youngest and unborn children. That is what the “KRAP” does. The “KRAP” is an awful piece of legislation. When you look at the numbers the “KRAP” as I want it to be changed to is not only a mean-spirited bill in terms of what it will do for the savings regime and the culture of savings in New Zealand but it is also a fiscally cynical piece of legislation. By cutting the $1000 kick-start payment for Kiwis this Government will save about $175 million next year. The projected surplus next year just happens to be $176 million. So this is a lazy Government. It could not look to save a bit here and to save a bit there. It just takes away the KiwiSaver kick-start as part of this “KRAP”.As part of this “KRAP” we have been I guess antagonising members on the other side of the Chamber as to who should pay back their KiwiSaver contribution. It is not very often that I get to stand in this Chamber and praise a member on the opposite side of the Chamber. As it stands now—of the National members in the Chamber now—David Bennett is the only one who has not signed up to KiwiSaver. He is the only one on that side of the Chamber who has not signed up according to the Register of Pecuniary Interests. So he is the only one to whom we are not offering the challenge to pay the $1000 back. David you can leave the Chamber in the next 2½ minutes and I challenge your colleagues who have all taken the $1000 kick-start because they are all signed up to KiwiSaver. You can leave. You are not going to be criticised here. Your colleagues who are sitting in the Chamber right now are quite happy to take $1000 but from 21 May at 2 p.m. no one else can. That is the reality. Every member on that side of the Chamber who is signed up to KiwiSaver—then fine; I will take that $1000 but from 21 May at 2 p.m. no one else can. Not one person.David Bennett you are either principled or you might be a bit stupid because you should have signed up to KiwiSaver. You should have signed up because it is a great scheme which was started by the Labour Government. It is so good that 2.5 million New Zealanders have signed up to it and that National Government is trying to take credit for it. But under this “KRAP” the Government is ruining KiwiSaver. It is ruining it and it is not the first time. The Government has got a track record of doing this. This is the eighth time—the eighth time—that it has taken the knife to KiwiSaver. This “KRAP” is an embarrassing piece of legislation for the Government because it is trying to get it to a surplus that it will never achieve and it is ruining the savings culture of New Zealand. Why if something is working do you in this “KRAP” take away something that is an incentive for the 2.5 million people who have signed up to KiwiSaver? It does not make sense.Here is the challenge again—and David I do appreciate that you have not signed up. The tragedy for David Bennett is that he cannot sign up. He cannot sign up. The challenge to the other members of the Committee on the other side of the Chamber is that you have got $1000 but you are now denying every Kiwi who has not signed up to KiwiSaver. You got $1000 that at least 1.5 million Kiwis are not entitled to now. You do not have to David; you did not get it. If you on that side of the Chamber are quite happy to sit there and pass the “KRAP” pay the $1000 back. Give it back. That is essentially what you should do if you have got some honour and you want to pass this “KRAP”—give the $1000 back. It is the decent thing to do and it is the honourable thing to do. David Bennett—good on you.LOUISA WALL (Labour—Manurewa):Kia ora Mr Chair. Thank you very much for the opportunity to contribute to this Committee stage debate on the KiwiSaver Budget Measures Bill. I will talk about some alternative titles later but I just want to provide some context for this piece of legislation. We have 4.41 million people in New Zealand and of those 2350000 are enrolled in KiwiSaver. Of those people who are enrolled 352000 are zero to 17-year-olds. So actually our children have engaged in this process and are taking advantage of KiwiSaver because like us we want them to prepare for the future. Seventy-eight percent are not enrolled. That is 2.12 million people but within that cohort actually 338000 people have opted out. So this bill actually has relevance to 1.7 million New Zealanders—that is the 40 percent of New Zealanders who are not enrolled in KiwiSaver. I would like to highlight the fact that of those not enrolled New Zealanders who earn under $30000 are actually the most disadvantaged. They are the ones who have chosen not to opt into KiwiSaver presumably because of their circumstances.I want to take the opportunity to also highlight the Greens’ Supplementary Order Paper 81 which would retain the $1000 kick-start contribution for those holding a community services card. Why that cohort? Because actually that is the cohort of low to middle-income earners who are not engaging. So it is very much about ensuring that those who are not in the system have opportunities to participate. I have been looking at the Inland Revenue Department’s report Who is enrolling in KiwiSaver?. It is dated February 2015 and it was prepared by the KiwiSaver Evaluation Steering Group. Of most relevance to me is that of the New Zealanders who have chosen to enrol there are three enrolment types. The first enrolment type is people who enrol directly with a provider. So 40 percent of people who enrolled with KiwiSaver did so with a provider. Forty percent of people are automatically enrolled and 22 percent opt in.The rest of my speech is going to be focused on that particular cohort—the 40 percent of people who automatically enrol. These are 18 to 64-year-olds who are in new jobs with a new employer and where that job is either full-time permanent part-time or it has got some sense of longevity to it. Here are some of the titles that I think this bill should have actually. If you are auto-enrolled this bill could be the “KiwiSaver (If You Are Single and Aged Between 18 and 24 We Don’t Care About You) Bill” because it is that cohort that is automatically enrolled.This bill could also be called the “KiwiSaver (If You Are Māori and Pacific Islander You Are Not Our Priority) Bill” because again it is Māori and Pacific Islanders who automatically enrol. This could be the “KiwiSaver (If You Are Secondary School - Educated Hard Luck) Bill” because actually hard luck to you. You have got only a secondary school education so too bad; we are going to take this opportunity away from you.This could also be called the “KiwiSaver (If You Are Working in Lower White-Collar Positions Work Longer Hours to Feed Your Family) Bill”. How about we title it that? What about this one: the “KiwiSaver (If You Are Working in the Retail Trade and Accommodation Industry Get More Tips) Bill” because you have got to go and do things yourself. Obviously this Government does not care about you. Finally what about the “KiwiSaver (If You Are Earning $35000 or Less in Employment Income Be Grateful With What You Have Got) Bill”?From our perspective there is a lack of analysis of this piece of legislation in terms of whom this piece of legislation is going to hurt the most. This Government likes to stand on platitudes and talk about helping people out of hardship helping people to create a better life for themselves and their families. But this report actually proves that it does not care that this is all about saving money and that at the end of the day evidence like this which they have should have gone to whoever is responsible for inland revenue and you should know the impact of this piece of legislation on the specific New Zealanders who are now going to have these opportunities taken away from them. If you out there think—ANDREW BAYLY (National—Hunua):I move That the question be now put.The CHAIRPERSON (Hon Trevor Mallard): I call Jan Logie.JAN LOGIE (Green):Thank you Mr Chair that was a great decision. I am happy to take a call on the Committee stage of the so-called KiwiSaver Budget Measures Bill which as has already been well canvassed has very little meaning and conveys very little meaning to anyone.I have several alternative titles for this bill which I would like to explore in this Chamber. My first one is the “It’s Working So Let’s Fix It Bill” because actually we know that New Zealand has a massive problem with savings or a lack of savings. It has been much worse than what it is now. My colleague James Shaw has already mentioned that New Zealand is 22nd out of 24 countries in the OECD in terms of low levels of savings. So in international comparisons we have a real problem and this shows up quite significantly in our current account deficit. We have seen it over time in New Zealand. The Committee might be interested to know that household savings per capita in 1992 were $752 which is not particularly high. But you might be even more interested to know that in 2006 before KiwiSaver was brought in household savings per capita were negative $1359. We were in a crisis in terms of household debt at that point which is what triggered the introduction—I understand; I was not really involved at that time—of KiwiSaver. Now since we have had KiwiSaver the levels of household savings are up to $627 per capita so we are not even back to the point we were at in 1992.I have some ambivalence over KiwiSaver. I will admit that upfront because we live in such an incredibly unequal society where so many people are surviving well below the breadline in poverty. We know that a quarter of a million children are living in poverty and we know that so many workers the majority of whom are women Māori Pasifika and migrant workers are in precarious work living below that poverty line as well and that two out of five children living in poverty are in families who are working.So in that context KiwiSaver is a voluntary scheme—it would be even worse if it was a compulsory one. When people are struggling to put food on the table KiwiSaver actually exacerbates inequality in some ways because those who are earning the most are able to contribute the most and get more contributions from their employers so their KiwiSaver savings go up. That is good for our current account deficit that is good for our household capital accumulation but it is not necessarily good for addressing inequality.However this $1000 kick-start incentive actually is something that goes right across the board in terms of that universalism and is available to workers who cannot necessarily afford who cannot sacrifice food on the table to make weekly contributions for their future well-being. It is available to beneficiaries and the children of beneficiaries whom we want to have the chance to get a leg up. So choosing this mechanism to remove this is actually the worst possible thing that the Government could do in relation to KiwiSaver’s impact on addressing inequality.Another idea I had for this bill following on from the rather hilarious contribution I thought from the New Zealand First member who suggested this could be renamed the “OMG YOLO No Future Bill”—I had to be able to say that out loud; it was a pure moment in the Chamber for me. But I would suggest that another possibility for this title could be the “Boom—Your Incentive Is Gone Bill”. Sorry I did not manage to carry that off.Hon Member: Boom.JAN LOGIE: Boom—no I still cannot carry it off. But the point is real. This has come out of nowhere. I have heard from people just on my Facebook thread who were in the process—IAN McKELVIE (National—Rangitīkei):I move That the question be now put.The CHAIRPERSON (Hon Trevor Mallard): Yes I think there has been a reasonable amount of discussion on this and I think the Committee is in a position to decide whether or not it wants to put the question.A party votewas called for on the questionThat the question be now put.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Motion agreed to.The CHAIRPERSON (Hon Trevor Mallard): There have been I understand two amendments tabled. The first the amendment in the name of Iain Lees-Galloway on clause 1 to delete “Budget Measures” and replace it with “Cut Number 8” I am ruling out of order as not being a serious amendment or a serious title.IAIN LEES-GALLOWAY (Labour—Palmerston North):I raise a point of order Mr Chairperson.The CHAIRPERSON (Hon Trevor Mallard): The member is not going to dispute my ruling is he?IAIN LEES-GALLOWAY: I seek some clarification. Thank you Mr Chairperson I appreciate your hearing this point of order. I would like some clarification about why you believe that that is not a serious amendment to the title. I dedicated probably a good 4 minutes of the 5 minutes I was given—and I was prepared to give more—to the reasons behind why that was an appropriate title. It was not in any way frivolous. There was evidence behind it. I provided that evidence in the contribution that I made. In fact my colleague the Hon David Parker listed all eight of the cuts that that title amendment relates to in his speech on the first reading. It is not a frivolous contribution at all. It does relate to facts and evidence and I would appreciate a serious consideration of your ruling.The CHAIRPERSON (Hon Trevor Mallard): OK. I will be slightly liberal and not take this as a criticism or as an attempt to relitigate but I will point the member to Speakers’ ruling 116/6 where it makes it clear that an amendment to the title of a bill cannot be an attempt to criticise its contents. That is how—[Interruption] Mr Parker—I have interpreted this.Hon David Parker: Point of order Mr Chairperson.The CHAIRPERSON (Hon Trevor Mallard): I just want to make it absolutely clear to the member that he really has only one path now that is within the Standing Orders. I have made a ruling. That is not a ruling that I am able to reverse or to change. He does have only one course if he wants to change that.Hon DAVID PARKER (Labour):I raise a point of order Mr Chairperson. Yes—I am actually not seeking to overturn your ruling but I am seeking clarification of your earlier ruling when you said that you could not have a point of order in respect of your ruling. I suggest that that was wrong.The CHAIRPERSON (Hon Trevor Mallard): Well I can contemplate that and do not need to rule on it now. I have ruled that amendment out. I have another one that is even easier to rule on. It is one in the name of Clayton Mitchell which suggests that we delete the title and replace it with the following: “OMG YOLO #NOFUTURE”. I am going to rule that out as not being consistent with current parliamentary drafting standards.CLAYTON MITCHELL (NZ First):I raise a point of order Mr Chairperson. May I just speak to that ruling?The CHAIRPERSON (Hon Trevor Mallard): Well I just want to make it very clear that the member is not going to relitigate or criticise or attempt to have it changed because if he does he will be being disorderly. I think I have been pretty liberal with a couple of people on this side of the Chamber and I am unlikely to be liberal again.A party votewas called for on the questionThat clause 1 be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Clause 1 agreed to.Clause 2 CommencementThe CHAIRPERSON (Hon Trevor Mallard): Already we have on the Table an amendment from Fletcher Tabuteau one from Dr David Clark and one from Chris Hipkins.Hon DAVID PARKER (Labour):What a fair Chairman. It actually does speak well of the Chairman because I just had a wee confrontation with him and he is still big enough to call me so thank you Mr Chairman.I want to talk to the commencement date. The commencement date is expressed to be when the KiwiSaver Budget Measures Bill gets Royal assent but then there are two exceptions to that which are that particular parts of the bill once it receives Royal assent are of retrospective effect. I want to talk about why we need to take particular care in respect of commencement dates in respect of legislation that goes to raiding retirement schemes because the Government has got prior form on this. The National Party which forms the majority of this Government is the same party that raided the earlier retirement scheme under Muldoon. It killed off the Kirk scheme which would have had New Zealand in a similar position to Australia in terms of investment capital. In fact it was even earlier than the Australian scheme that followed it. It has killed off contributions to the Cullen fund. We have already seen that that has cost—Dr David Clark: $16 billion.Hon DAVID PARKER: —the Cullen fund $16 billion at current rates of return because of that folly. And now we have cuts to KiwiSaver particularly the $1000.As to the date you have got ask yourself this. The Government is doing this as of today in the name it says of child poverty. When do its child poverty measures kick in? On 1 April next year. The Government is saying that it is a compassionate Government because it recognises that there are many children many thousands of children living in severe poverty in New Zealand. It accepts that these children sometimes go without breakfast sometimes go without lunch at school sometimes go without shoes and can never pay their school fees or just about never. It accepts that we have serious hardship in New Zealand amongst children and that they need $25 a week—we think that is pretty miserly; our policy was $60 a week per child under 3—but it says $25 a week because their circumstances are so desperate that they need more money for breakfast.So those parents are going to go to their kids on Monday and they are going to say: “Next year you can have breakfast.” Look at their eyes down over there on the Government benches. One of the fundamental flaws relating to commencement dates in this total Budget package is that actually the Government acknowledges that there is a real and serious problem with child poverty now in New Zealand but it is not going to fix it until 1 April next year—and this in a wealthy country.But what will the Government do this year? This year it will kill the KiwiSaver kick-start payment effective as of Budget day. It is backwards. Not April next year. It will take that off people next year. You know that kick-start payment is deliberately progressive. The Labour Party designed it. We do things that are progressive. One thousand dollars to a low-income person is worth a lot more than $1000 to a high-income person partly because of their marginal tax rates and partly just because their income rate is lower. The progressive payment of $1000 per person is progressive. The Government takes that away today but the people whom it says are in poverty now do not get breakfast until next year. That sums up this Government.Hon Annette King: That’s how much they care.Hon DAVID PARKER: That is how much it cares. It cares not enough. We accept that $25 a week next year is better than not getting $25 a week next year. We said we would get $60 a week into the pockets of those kids in poor families per child for the first 3 years of their life from this year. But we did not win the election; National did. With the KiwiSaver kick-start payment we were actually going to spread it over 5 years as we got everyone into the scheme but we were not going to cut it.The commencement date of this legislation is worthy of note because it highlights the fact that the Government pretends that it is worried about these children living in poverty who cannot get breakfast this year but it is saying: “You won’t get it till next year.” I also want to return to the question of why it is that the bill has got a commencement date for reducing one of the incentives to KiwiSaver now when we have got a current account deficit that is blowing out we have got exports dropping—Dr DAVID CLARK (Labour—Dunedin North):I know that on the Government benches they were eager to hear my contribution so I shall not disappoint. I have put forward an amendment to the KiwiSaver Budget Measures Bill to ensure that this kick-start contribution is not withdrawn until 2018. That would allow a future Labour Government to make sure that the kick-start contribution continues as it is now.This is a Government that is determined to take from New Zealand’s future in order to pay for its mismanagement today. This is a Government with no plan. Those members opposite have got their heads down. They know that it is true. The Government is trying here to take $1000 off future generations—off half a million Kiwis in the next 4 years. That is what it is doing here with this bill. Make no mistake if you are watching this at home. It is taking $1000 off half a million Kiwis for their retirement savings because it has not managed the economy well because it has failed to get to surplus and because it is trying to make it look like it has not missed by too much. Actually the books are a billion dollars worse than they were at the last Budget. The Government is doing an appalling job of managing the economy. It has failed in good times to diversify the economy.My amendment would push out the date on which this legislation starts so that a Labour Government in the future could fix this before it actually takes effect. That is the effect of my amendment. If we look at how it stands now—and it is here in the explanatory note in the general policy statement at the front of the bill. People at home may not have this in front them but—Hon Members: Ha ha!Dr DAVID CLARK: Well they might—they might. There are some who will. But if they do not I will explain that what this bill attempts to do is enact retrospective legislation. When the Budget was announced at 2 p.m. on Thursday that was the cut-off point. If people had not signed up at that point they were not eligible to get the kick-start contribution any more. Why did the Government make that change retrospective? Why is it passing legislation now—after that time—that takes effect a few days ago? It is because it knows in its heart of hearts that this incentive works. It knows that if people really wanted to sign up to this programme just because it was so they would have done it anyway. That the incentive really matters is something that Government members try to deny but they know that if they made this change start a little later people would be rushing out there to sign up.There is also an amendment in the name of Chris Hipkins which I expect he will speak to on that front which allows for people who may be watching at home and saying “Gosh I wish I’d got that $1000.” to go out and sign up in the next few months. It is a sensible amendment. If the Government members really believed that that was not going to be the effect of this legislation if they really believed that $1000 would make no difference they would accept Chris Hipkin’s amendment and they would accept my amendment which allows for that $1000 to continue.My amendment is really targeted at the artificial surplus that the Government is creating because this is a Budget without vision. This Budget is one that fails to meet the Government’s promise of a surplus—the central promise of its last election campaign. This amendment says: “We will continue with this very good scheme until a future Labour Government can correct it.” That is why I am putting forward an amendment in clause 2 of the bill. As it currently stands it came into force as I said the moment the Budget was announced. We know that this will have an effect. We also know that the changes that the Government is proposing are going to cost taxpayers so we would obviate that cost with my amendment.The extra $210000 that the Government estimates currently that it would cost to change the Inland Revenue Department tax system in order to take this money away from future kids—$210000 to take the money away from future kids—would be avoided. Let us think about that. That is 210 kids’ starts in life—210—that are paid for just by avoiding this change. The Government spends the money frivolously on Government administration because it is scampering for the surplus. The bill was a panicked response. We know that and we have heard that in the previous debate because it is right there in the Government’s own departmental statements. It is important for the reason that it avoids costs to the Inland Revenue Department and by flow-on effect it avoids costs to the taxpayer. That $210000 can be avoided. I would think that members opposite would consider it to be important to take into account how New Zealand taxpayers’ money is spent.JAMES SHAW (Green):I would like to speak to the commencement date as outlined in clause 2 of the KiwiSaver Budget Measures Bill as well. I note that in my last call I asked Mr Woodhouse the Minister in the chair whether he would respond to a number of questions which he did not. One of them or in fact a couple of them relate directly to this clause which is the commencement date. What we know is that the Government has said that it wants to introduce this immediately and has taken the attitude that if you are not already currently enrolled in the scheme then the chances that you are ever going to get enrolled in the scheme are low to none and so what would be the harm in immediate commencement? We also know that there are people out there who have been thinking about it. We know from behavioural economics that there is a substantial tail of people for whom it is a complicated process and they would like to get round to it but they have not yet got round to it. The question is: why not just extend this out and have it commence at a later date in order to incentivise those who are currently not in the scheme but were kind of thinking about it to actually get into the scheme? Yes it would cost a little bit more money but if the intention here is to scoop up as many people as possible using the incentive then we ought to do that.I know that there are a number of amendments. There is David Clark’s amendment pushing the commencement date out to after the next election. There is also Fletcher Tabuteau’s amendment pushing it out by a couple of years. I take the Labour Party’s point—which I think is a valid one—that if you commence this bill immediately but not the rest of the hardship package until the beginning of the next financial year then there is a substantial gap there between the commencement of this cut and then the implementation of the benefit increases. Why not just line them up? Why not say: “Let’s commence this at the start of the next financial year.”? That gives people an incentive. If they are currently not in the scheme it says you have got 8 or 9 months to get yourself into the scheme. It makes perfect sense to do that and then after that the incentive will be gone. People will have had fair warning and at the same time you will have joined it up with the rest of your benefits package that you have been talking about.To me it makes perfect sense to do that. I have not yet heard anybody from the Government say anything about why it was chosen to have this immediate and retrospective commencement date and whether there was any consideration at all of any kind of zone where people who are currently not in the scheme could get into the scheme. I really would like a response to that. I notice that Simon Bridges has now taken the Government’s position in the chair and I have noted in previous debates that Mr Bridges has responded directly to these kinds of points so I would like to invite him to do so. I understand that the vote is going to go the way it is going to go but it would be nice to hear the Government’s reasoning in response to that point because I think it is a fair and valid one. Thank you.FLETCHER TABUTEAU (NZ First):Thank you—[Interruption] Thanks for the response on the other side of the Chamber. Thanks gentlemen. The whole premise of this legislation and the whole logic that we are given behind it in order to debate today is we are told that the $1000 kick-start contribution is no longer sufficient or actually it is unwarranted because it does not do enough to engage people into KiwiSaver people are not coming into KiwiSaver any more this $1000 contribution is not doing what we want it to and it is costing us too much money. That is the logic that this Government provides this Committee today and it is why we are debating this.On top of that the policy advice that we and the Government were given was actually to ignore the implications to saving in terms of the national interest for New Zealand. So do not look at that; just analyse why we should get rid of this KiwiSaver contribution because we need an excuse.My challenge—and I will not take all of my time because it is a simple challenge—to this Government is to consider the fact that based on the premise of your logic today you do not need retrospective legislation. You did not need to bring this in days ago. There is no reason for it under the premise of the logic that you have provided this Committee with today. Give New Zealanders time. You have put it out there publicly now. Give them time so that they can engage in their savings.We have heard such impassioned contributions and meaningful contributions from this side of the Chamber about who is missing out and so that I focus on this clause solely I will just repeat that it was said. I will not go into the detail again. But let us use another piece of logic. Let us line up the changes in legislation which is what the two Supplementary Order Papers have suggested. Let us line them up. We are bringing these welfare changes in in a couple of years. Let us give New Zealanders the same opportunity to react. Let us give them time to understand that now is the time to get into their KiwiSaver programme. I know that it was cynically asked how we get New Zealanders into KiwiSaver. Well my cynical response will be that this Government will make it compulsory. Do not do that. Give them a real reason. Give them that incentive that our youth need. Let us even up the playing field. There is no need under the logic provided by the Government to this Committee. The very reason for this debate is that it is no longer an incentive. Well let us bring it in just before the election and let the Government members stand in front of the public and say to them “We are taking away your KiwiSaver.” when it is fresh in the public’s mind. Thank you.CHRIS HIPKINS (Labour—Rimutaka):I am very pleased to speak to the amendment to clause 2 of the KiwiSaver Budget Measures Bill that I have put forward which would move the commencement date of the main part of this legislation from 21 May 2015—Budget day—through to 21 June 2015. It would give people who have not had the opportunity to take up the kick-start just over a month to do so.In speaking to this amendment I want to particularly address my comments to the five new National members on the other side of the House. Those five National members all campaigned under the same slogan which was that they promised to be “the strong voice for [insert electorate name here] in John Key’s National Government”. They had advertisements up and down the country and on their cars campaigning.Chris Bishop: And a fresh face.CHRIS HIPKINS: Chris Bishop has still got one in the basement with the slogan on it. It sits in the basement now because he has given up. The slogan was to be “a strong voice in John Key’s National Government”. Well let us hear it. Let us hear that strong voice. Let us hear them stand up and say why they think that the Kiwis who have not yet signed up to KiwiSaver should not get the $1000 kick-start. Let us hear them stand up and explain why this legislation needs to be retrospectively backdated to stop Kiwis who have not signed up from being able to get the $1000 kick-start.The amendment that I have put forward would give them a month to do so and if the Government thinks that this is an unfair advantage then say so. Let us hear it. Let us hear those members say it because let us actually think about the practical implications of this. If somebody on Thursday—it is still Thursday in the House today according to the rules of the House. So if somebody today under the rules of the House—which was actually Thursday in the real world—went out in their lunch break and signed up for KiwiSaver at 1.30 p.m. then they would get $1000 for doing so. But if somebody signed up right now before this bill has even finished its passage through the House they would not get that $1000. We are talking about a matter of an hour. How is that fair? I am happy to hear from anyone from the Government about how they think that is fair. It is not—it is not. If the Government really believed in this change and it really thought that this was necessary it would at least give the New Zealanders who have not had the chance to sign up the opportunity to do so.Here is another example and another reason why Kiwis should be given extra time to take up the measure and why my amendment is well and truly justified. If a child is born into a family earning a middle or higher income or has been born in that family in say the last 6 months to a year and their parents took up the opportunity to sign them up to KiwiSaver then they are going to get the $1000. On the other hand somebody who has been working their way up in a minimum wage job to get themselves to the point—and they may have just got to that point around about now—where they can finally afford to sign up to KiwiSaver is not going to get it.This reinforces inequality in the system. It says to somebody that if they have had the good fortune in the last few years to have been born into a family who could afford to sign them up to KiwiSaver right when they were born they are going to get an advantage. Compare that with someone who is working really hard and is potentially at the point now where they can finally sign up to KiwiSaver; they could have been working towards it. They are not going to get the $1000 kick-start that somebody who has had the good fortune to be born into a family who could afford it is going to get. That is unfair. So why not give those people who are on low incomes who have been delaying signing up into KiwiSaver until they were in a financial position to do so—why not give them a month?David Bennett: What about the next generation of low-income earners? What a stupid speech.CHRIS HIPKINS: Why not just give them a year to actually see whether they can make it across that hurdle? Why not be fair? David Bennett says it is not fair. David Bennett is about the only member on that side of the House whom I am willing to hear criticism from on KiwiSaver because he is one of the only people on the other side of the House who has not actually signed up to KiwiSaver. As my colleague Kris Faafoi pointed out he is either very principled or very stupid—probably the latter. But—David Bennett: I raise a point of order Mr Chairperson. From an inane member like that I am not accepting that comment—The CHAIRPERSON (Hon Trevor Mallard): Order! The member will sit down. First of all the member is going to withdraw and apologise for being disorderly during his point of order. When he has done that he will have one chance to raise a proper point of order.David Bennett: No it’s OK.The CHAIRPERSON (Hon Trevor Mallard): Well you are going to withdraw and apologise anyway.David Bennett: I withdraw and apologise but I ask that member to withdraw and apologise as well.The CHAIRPERSON (Hon Trevor Mallard): You have now got your last chance if you want to stay in the House to withdraw and apologise with nothing else.David Bennett: I withdraw and apologise.CHRIS HIPKINS: Thank you very much Mr Chair. I am happy to wrap up this contribution on my amendment although I might have a little bit more time to go but we will see how we go.I want to speak to another reason why this amendment that I have put forward should be adopted by the House. I want to say as matter of principle that I would rather David Clark’s amendment be passed. It pushes this commencement date out beyond the next election so that New Zealanders can actually have a say on it because this was not a change foreshadowed by National at the last election and New Zealanders should have the opportunity to vote on it. But if the Government is not of a mind to support that I hope that it will support my amendment. If the Government members were genuine in the contributions that they made—DAVID SHEARER (Labour—Mt Albert):I rise to support Chris Hipkins’ amendment because as he said the current commencement date is not fair. But what I would like to say is that I think it is probably even fairer to push that date as David Clark’s amendment proposes right through to beyond the election so that it is actually an election issue.Let us face it in Budgets gone by with the old Budgets in the past people used to go out in the evening of the day before and fill up their cars with petrol because they thought that the price of petrol was going to go up. This Government has the practice of cutting a clause out of KiwiSaver in every single Budget so that it undermines the very premise on which this scheme is running.Two and a half million people have signed up for KiwiSaver—2.5 million people. It is an outstanding success and why are those people signing up? Well according to the Inland Revenue Department—and the department has done an extensive number of surveys on this—65 percent of the people who sign up for KiwiSaver do so to collect the $1000 kick-start. So now you have just moved that out of the way on top of all of the other cuts that have been made over the years by this Government and what we are seeing is sort of like a chair that has had one leg cut off and has then had another leg cut off. Slowly but surely this Government is wanting to see how long it is going to be before KiwiSaver just completely collapses and falls over and New Zealanders lose confidence in it.If there is one thing that I believe changing the commencement clause will do it is that it will give people the ability to be able to say whether or not they want to keep this kick-start and that would enable them—before the next election according to the amendment that David Clark is putting forward—to make a fair and true decision on whether they want that $1000 or not. I would say that just about everybody of course will want it and they will want it not only for the dollar value that it represents but also for the fact that it represents our continuing to maintain the integrity of a scheme that is important over time.We go into a superannuation scheme—as with this scheme in the past but now people will not have the opportunity to do this any more—on the understanding that there is going to be a nest egg at the end and that the incentives for us to put our money into that scheme for that nest egg are going to be there. But we have had at least six different cuts made to KiwiSaver in the course of this Government. It has cut for example the minimum member contribution—that was in 2009. It has cut the member fee subsidy—that was in April 2009. It has cut the compulsory employer contributions. It has cut the employer tax credit to disincentivise employers to put money into it. It has cut the member—Tim Macindoe: I raise a point of order Mr Chairperson. I raise this point of order under Speaker’s ruling 114/7. I have been listening to this member for some time. We are on a very narrow commencement clause of this particular bill and this member is straying far from that. He needs to either come back to the commencement date or cease his call.The CHAIRPERSON (Hon Trevor Mallard): Sorry could you tell me the Speaker’s ruling?Tim Macindoe: It is Speaker’s ruling 114/7. It is the ruling of Rick Barker when he was the Chairperson.The CHAIRPERSON (Hon Trevor Mallard): That is a question of relevance and relevance is a question that is decided by the Chair not by a point of order. I might say though that I had come to that conclusion myself already and probably would have taken it into account as to the length of the debate. I was going to warn the next speaker that we are now talking about the date on which this bill comes into force. It is not a general debate on it.DAVID SHEARER: Just to make that completely relevant all of those cuts that I was talking about happened without warning. They all happened without warning. They all cut a scheme that people had confidence in and that is why it is so important and so fair to ensure that the commencement date is out into the future so that at least people out there can make a decision that is informed that is fair as to whether or not they want to join this scheme. If we do not do that the insidious erosion of confidence in KiwiSaver will continue to occur.That is why I agree in order of priority with David Clark’s amendment and then Chris Hipkins’ amendment. Both of those amendments propose the commencement of this bill in the future rather than having it imposed upon us retrospectively so that people who had been thinking about getting into KiwiSaver toying with the idea of doing it are now no longer able to enjoy the benefits of the $1000 that would have been put into it.This is I believe an undermining of a fabulous scheme. It was put in by the Labour Government. I agree that this Government has taken it and cut it and cut it and cut it. This bill is another example of that cut.CLAYTON MITCHELL (NZ First):I rise to take a call on clause 2 of this bill the KiwiSaver Budget Measures Bill. I think there are some Supplementary Order Papers on the Table that are fair and reasonable. Let us be honest. What we are asking with these Supplementary Order Papers in particular is for National to keep it real. Keep it real for New Zealanders about what you are actually doing here. You are quick off the hip when it comes to making legislative changes and very very slow to give back those changes. What we are asking—and I spoke to this earlier on in my comments—is to think about those people and give them enough time to go in and register for KiwiSaver. It is not unfair or unreasonable to ask that. I would certainly like to get the words from the Minister. You will be pleased to see Mr Chair that I am wearing my pink tie. I am impervious to insult and injury today because of course this is my bully-proof suit so I look forward to hearing from Simon Bridges the Minister in the chair.However I would like to say that being fair and reasonable is absolutely what this Government should be. Does it stand scrutiny? What the Government is doing is taking it away so quickly that it is ripping the carpet out from underneath the feet of those New Zealanders who need to be looked out for. The Government is dressing it up and putting a bow around it but in actual fact it is just putting lipstick on a pig. This does not fit in with what National says is standing up and being a voice for New Zealanders.David Bennett: This is another transgender comment is it?CLAYTON MITCHELL: Apart from the absolute brain constipation that I get from the verbal diarrhoea from the other side of the Chamber from time to time—and I am specifically talking to you Mr Bennett—we need to make sure that we are giving the people of New Zealand enough time to react to this quick-off-the-hip legislative change.We have got Supplementary Order Paper 85 from my colleague Mr Fletcher Tabuteau which makes sense—it absolutely makes sense. It is common sense to give people at least 2 years—2 years—to make some changes in order to get themselves into that scheme. In fact we got it from Labour and we got it from the Greens as well to narrow it down—even to 1 year would be acceptable and we would support that. Goodness me we would support 90 days if this Government saw the sense in what that would do. You need to give the people of New Zealand some time to get in and get adjusted to this legislation which is being force-fed down our throats.We are in urgency at the moment on a Saturday morning and I am sure there are many many people at home who are absolutely riveted to this. Watching this debate is like watching an All Blacks test match.Hon Member: It’s afternoon.CLAYTON MITCHELL: It is afternoon already. Goodness me! It feels like I have just arrived. You know when I look at the indebtedness of this country as of Tuesday it was $19511 per New Zealander and it has now gone up to about $20000 per New Zealander. That is more indebtedness than Kaipara District Council had at $10500 per head of population which sent it to the wall. Now all of a sudden under this legislation you are taking more money away from New Zealanders making it harder for that debt to be repaid for our future.New Zealand’s future is at serious risk. We spoke about the curve of having an aged population a very skinny working population and a very large and growing young population which we are going to have to manage and maintain through schemes such as KiwiSaver. With the kick-start programme 66 percent of people signed up to KiwiSaver because of that $1000 kick-start—many many people. I was fortunate enough to sign up to an AMP life insurance whole-of-life policy when I was 19 years old because it made sense and because there was nothing else that the Government was going to offer us back then.The CHAIRPERSON (Hon Trevor Mallard): I am going to invite the member to come back to the clause.CLAYTON MITCHELL: I am going to come back to the time—Tim Macindoe: The member also needs to explain how this will stop us repaying debt. It seems to be his argument but it makes no sense at all.CLAYTON MITCHELL: Righty-o. The reason why we suggested the name change for the bill of “#nofuture” is that this is the time. If we do not start thinking about the future of our constituents of the people of New Zealand time will be running out so I absolutely think that this Government should be supporting giving those people a longer period of time to sign themselves up to KiwiSaver. To say retrospectively that last Thursday was the cut-off point is absolutely wrong. I would love to hear from Minister Simon Bridges to see how he can justify that. He is nodding his head in agreement. It sounds like he might take a call. We would certainly like to hear from him. Just remember I have my bully-proof suit and pink tie on today so hit me with all of your best insults. Thank you.ADRIAN RURAWHE (Labour—Te Tai Hauāuru):In speaking to the commencement clause if I were to choose a date I would choose 5 August 2016 as the commencement date of this bill. I would do that because it would be a continuation of the legacy set in the 1970s—on 5 August 1976. Next year will be the 40th anniversary of the Government of the Rt Hon Robert Muldoon withdrawing the then-current superannuation scheme. To make further comparisons to that legacy the Rt Hon Robert Muldoon said that that superannuation scheme was turning New Zealand into a Soviet clone. The comparison is that the Prime Minister John Key has said that KiwiSaver was “communism by stealth”. So here is a really tight comparison between that Government then and the Government now and the legacy that the National Government continues today by trying to push through this legislation under urgency.There was an article written in the New Zealand Herald before the 2008 election that warned the National Party not to go down the same path. Well the genius of KiwiSaver put in place by the Labour Government under Michael Cullen was that it has taken this Government eight attempts over 7 years to try to get rid of KiwiSaver. The article I refer to ends with the words: “It would be a tragedy if a new National Government under Key and English made the same dreadful mistake as Muldoon in December 1975.” The Government has made that mistake over the last 7 years by making eight cuts to the scheme. So the commencement ought to be on that anniversary to commemorate the 40 years since the National Government cut that superannuation scheme and denied our country of having a fund of $280 billion for a future for our children.This piece of legislation as has already been stated steals from future generations. Well I am part of the generation that that act of Robert Muldoon stole from—my generation and future generations—and the National Government is continuing to enhance that legacy. It is wrong.I oppose this bill in its entirety but I suggest that the commencement date ought to be 5 August 2016 to give ordinary New Zealanders the opportunity to have the same benefits that members opposite have had and that the whole of New Zealand ought to be able to have as well. That is my contribution to this part of the bill. Thank you.DAVID BENNETT (National—Hamilton East):I move That the question be now put.Hon DAVID CUNLIFFE (Labour—New Lynn):It is my pleasure to take the first of what I hope will be a series of calls on this important bill which is going to be bad for New Zealanders bad for the New Zealand economy and actually bad for our financial and saving institutions as well.As you know we are in the technical part of the debate here where we are going clause by clause. I want to begin by offering some fairly narrow comments on the commencement date itself. This is an example of misplaced use of a retrospective commencement date. It is actually quite a confused clause in itself because clause 2(1) says that the Act will come into force on the day on which it receives the Royal assent—but no date is provided breaching what is a longstanding good-practice convention upheld by Parliament in its Regulations Review Committee. In clause 2(2) however it says that “Section 4”—the operative section—“is treated as coming into force on 1 May 2015.” Given that that is prior to today that ensures a retrospective effect. That means that a young Kiwi who today hears that this door is closing cannot now join KiwiSaver. It is too late because Parliament if it passes this bill will deem that the door shut nearly 3 weeks ago. This is a retrospective instrument.Why would you do that? Or why would the Government do that when the argument that it has ostensibly for trying to take away the $1000 kick-start contribution is that not enough people have joined the scheme and not enough people have saved? That is its argument. Of course it is a fallacy but that is what the Government is trying to convince New Zealanders of. If the Government set as my colleague Chris Hipkins has suggested a future close-off date there would be a very strong incentive for anyone who is not currently a member of the scheme to join it. That would be a very good thing and it would support the very objectives that the Government has said it espouses. It would encourage people to join the scheme and to save more particularly those vulnerable or low-income people who to date have been the slowest to join. So setting a retrospective close-off prevents people joining and prevents the very objective that the Government says it holds.Even better would of course be my colleague David Clark’s amendment which is that the commencement date be deferred until after the coming election. Then it would never happen because the chances of the Government getting returned have got to be very very low. But in principle that would be a better option because New Zealanders would have the opportunity to vote based on the information that the Government has given to them only after the election. The National Party did not campaign on stealing back the KiwiSaver kick-start contribution. Not one word was said about its eighth attempt to gut KiwiSaver. Not one mention was made of Robert David Muldoon wrecking the last Labour-led savings scheme which if we had kept we would be a country as rich as Australia now. This is classic National Party “short-termism”.Why has the Government got this commencement date? It is relying on a very late-to-the-piece evaluation by the Inland Revenue Department that was released concurrently with this bill—i.e. it has had no opportunity for peer review or public criticism. It has simply been fed into this retrospective measure. It is a very very interesting piece of analysis because it frames the question up front away from the broader objectives that the KiwiSaver scheme has had from its inception. Those objectives were really three-way: firstly to help all New Zealanders save and save more for their retirement and their general financial well-being; and secondly to strengthen our domestic financial institutions so we have sticky local capital that we can invest in Kiwi businesses and Kiwi jobs.Members opposite are not focused on the debate; they are focused on the gallery. That is a very interesting thing because this is a very—The CHAIRPERSON (Hon Trevor Mallard): Order!Hon DAVID CUNLIFFE: —far-reaching measure that affects millions of New Zealanders. It affects millions of New Zealanders.The third objective for KiwiSaver has always been to improve New Zealand’s net savings position so that we reduce the current account deficit strengthen our total balance sheet and fit New Zealand for the future. And what is really interesting in the Inland Revenue Department’s analysis is that it has completely ignored 2½ of those three goals. It has ignored the broad fiscal savings gap issue and the current account deficit that flows from it. It has ignored the issues around the health of our financial institutions and our ability to invest in our own future.BRETT HUDSON (National):I move That the question be now put.The CHAIRPERSON (Hon Trevor Mallard): Yes I think it is fair to say that we have had some repetition—quite a lot of repetition—and some irrelevance. I think some of the arguments have been elegant but it has been a while since we have had anything new. The Committee can decide whether or not it wants to move on to the next clause.A party votewas called for on the questionThat the question be now put.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Motion agreed to.The question was put that the amendment set out on Supplementary Order Paper 85 in the name of Fletcher Tabuteau to clause 2 be agreed to.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the following amendment in the name of Dr David Clark to clause 2 be agreed to:replace this clause with the following new clause:2CommencementThis Act comes into force on 1 May 2018.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the following amendment in the name of Chris Hipkins to clause 2 be agreed to:in subclause (3) replace “at 2 pm on 21 May 2015” with “on 21 June 2015”.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.A party votewas called for on the questionThat clause 2 be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Clause 2 agreed to.Clause 3 Principal Act amendedDr DAVID CLARK (Labour—Dunedin North):This is a clause that refers to the principal Act and to amending the principal Act. I have a very short story that I wish to share with the Committee which illustrates the benefit of not amending this Act but instead of attaching the legislation to another Act. It is a story that some will know and that some will not know. It is the story of Nasrudin.Nasrudin was caught in the act and sentenced to die. Hauled up before the king he was asked by the royal presence: “Is there any reason at all why I shouldn’t have your head off right now?”. To which he replied: “Oh king live for ever. I know that I the mullah Nasrudin am the greatest teacher in your kingdom and it would surely be a waste to kill such a great teacher. So skilled am I that I could even teach your favourite horse to sing given a year to work on it.” The king was amused and said: “Very well then you move into the stable immediately and if the horse isn’t singing a year from now we’ll think of something interesting to do with you.” The story concludes that as he was returning to his cell to pick up his spare rags his cellmate remonstrated: “Now that was a very stupid promise. You know that you can’t teach that horse to sing no matter how long you try.” Nasrudin responded: “Not at all. I have a year now that I didn’t have before and a lot of things can happen in a year. The king might die. The horse might die. I might die. And who knows maybe the horse will sing.” That is a story—The CHAIRPERSON (Lindsay Tisch): Order! [Interruption] Order! We have had 2 minutes of something that is completely unrelated to the bill. I will ask the member to focus on the clause before the Committee in future debates. This is clause 3. It is a very narrow debate this part on clause 3 so I now ask the member to continue on clause 3.Dr DAVID CLARK: Point of order Mr Chairperson.The CHAIRPERSON (Lindsay Tisch): No I have ruled. I am waiting for you to continue.Dr DAVID CLARK: I will continue to speak to the principal Act amendment by saying that the story that I have just told illustrates clearly the benefit of not amending this principal Act and of amending another Act.For example the estimates—what if we amended the estimates? That debate is still to be had. We have not had that debate yet. There are plenty of other debates that will be had this year in the House. If this legislation was amending those Acts if the legislation was jiggered around so that it could fit into another Act it would wait to be passed and we would not be passing it under urgency today without input from the public and without the opportunity to speak about why this deprives New Zealanders—half a million New Zealanders the Government tells us—of the opportunity to get the $1000 kick-start payment. That is why it is important to wait. Many things could happen if we amended this legislation in another way and allowed an opportunity for the public to comment. The Government might be persuaded. It might hear the logic that has been espoused in this House. No doubt there will be more that the public can add. That is why we have the select committee process. In the short time we have had we have already heard from some stakeholders who have launched press releases to the public—for example the Financial Services Council has said that this legislation is like robbing the kids’ piggy banks and heading down to the pub for one more beer.Many members of the public will have their own wisdom to bring to the table. They may bring their own version of the story of Nasrudin. What we do know is that when we have measured processes through this House we get valuable input from the public. So by changing the principal Act that is to be amended to a different Act that is to be debated in this parliamentary Chamber later we provide more opportunity for people to engage with the debate and for this crazy change to be pushed out to another time. Who knows—the Prime Minister may step aside. We know that he is increasingly out of touch with New Zealanders and there are movements within his own Cabinet. So many many things can happen and that is why if we do not amend this principal Act in this way but choose to attach it to another Act additional time will benefit us all.Firstly let us examine what would happen if we did not amend this Act—if we actually left this entire clause out. What would happen if we left this entire clause out? That is an interesting question. What happens if you leave the entire clause out of the bill is that the legislation does not make sense any more. On this side of the Committee we would argue that it never made sense anyway but that is a debating point. We do not particularly like what is being rammed through here under urgency. But actually if you did not amend the principal Act the KiwiSaver Act 2006—an Act that was designed to increase savings and an Act that we have been told in the debate has increased savings by an estimated 36 percent according the Inland Revenue Department’s own research on the effect of the KiwiSaver Act 2006 which is referred to in this clause—we would continue we imagine to attract savers at a rate of additionality that is similar to the 36 percent reported by the Inland Revenue Department in its extensive review of the effects of this particular legislation.It said that its estimate was about 36 percent in 2010 and that that had not changed significantly in 2013. So what it is saying there is that this Act increases savings for New Zealanders. It actually changes the savings culture. If you did not put this clause in here—if this clause was not in here and this Act was not amended—then that 36 percent would not be lost and New Zealanders would continue to save at a rate superior to the rate that they were saving before the KiwiSaver Act 2006 was introduced. That is why I think it is important that we just leave this clause out. I would be in favour of that. I would be interested to see what the Government members say—whether they think that this clause should be left out or not. I am sure that Dr Nick Smith the Minister in the chair will have a view on that—he has a view on most things—unless he is so ashamed of this legislation that he does not wish to speak to this particular clause.Hon Gerry Brownlee: Like the member. I’m confounded that the member hasn’t been on one of those quiz shows. He knows so much about everything.Dr DAVID CLARK: That is very flattering Mr Brownlee—very flattering Mr Brownlee. I would enjoy being on a quiz show with Mr Brownlee because I do find Mr Brownlee entertaining at least. Although Mr Brownlee may not bring much substance to this particular debate he is an entertaining member of the House and so I would welcome the opportunity to be on a quiz show with him. I do not know—perhaps he can suggest some shows. He is quick on his feet. We should have a debate about what show that might be.I will return to the matter at hand although I look forward to Mr Brownlee’s contribution shortly because I expect he will want to defend this clause.Hon Gerry Brownlee: I have spoken and you should consider it the last word.Dr DAVID CLARK: Mr Brownlee says that his speech should be considered the last word. If that is not a sign of a Government that is out of touch and that has lost touch with the people of New Zealand then I do not think anything is. That is the kind of wisdom that Mr Brownlee brings to this Chamber—his word is the last word he is the Leader of the House. That is the reason that this legislation is going through under urgency because he says his word is the last word New Zealanders be damned. Anyone who objects to this should not have the opportunity to participate in the parliamentary debate. That is the kind of Government that we have opposite. That is the kind of Government we are staring down today as we protest against the changes that are proposed in this bill which over the next 4 years will rob half a million New Zealanders of that $1000 that every single National MP has taken advantage of. Not one of them will stand up and say that they have not taken advantage of it. That is what we are facing here in this Committee. I think that is very very much a lesson to those at home.Mr Smith is putting up his hand to speak. I look forward to his contribution after this because he is a man who might set that record straight. He might say that many National MPs have not taken up that $1000. He might say that he has not lined up his own family to take advantage of it. Who knows? We will see. We have certainly heard from one member of this House who has confessed that he and his family have taken it up and now they are cutting it off for everyone else.This is a Government that is out of ideas. It has failed to produce a surplus. And here we have—The CHAIRPERSON (Lindsay Tisch): Order! Come back.Dr DAVID CLARK: Yes coming back to the point Mr Chair and you are quite rightly bringing me back to the point of the matter. I was feeling quite passionate.If we left out clause 3 the bill would not amend the KiwiSaver Act and New Zealanders would continue to save at that additional rate that the Inland Revenue Department recommends of 36 percent and the savings of New Zealand would continue to be superior to what they were before the Act was introduced. That is why I think clause 3 should be left out of this bill. I do think that would make a difference for New Zealand in the longer term. It would encourage the savings culture that this Labour KiwiSaver Act brought into place. It would be a disappointment to the Government of course because it is more concerned with its sham surplus which it cannot achieve anyway and filling the billion-dollar black hole in its Budget which its economic mismanagement has opened up over the last year.KRIS FAAFOI (Labour—Mana):To speak to clause 3 of this bill: it is a very narrow debate and it does focus around the Act that this bill amends the KiwiSaver Act 2006. I think it would be useful to look at the purpose of that Act if I can have some time from the Chair to read that out because I think what we may have here as a situation is where what is being amended in this bill does not necessarily match with the purpose set out in the principal Act. If I can quote from the purpose section of the KiwiSaver Act 2006 which reads: “(1) The purpose of this Act is to encourage a long-term savings habit and asset accumulation by individuals who are not in a position to enjoy standards of living in retirement similar to those in pre-retirement. The Act aims to increase individuals’ well-being and financial independence particularly in retirement and to provide retirement benefits.” As I said that is the purpose as set out in the KiwiSaver Act 2006. The main function of the bill in front of us now is to remove the $1000 kick-start payment to anyone who wants to join KiwiSaver. One of the arguments on this side of the Chamber around the amendments to the KiwiSaver Act 2006 is that it will no longer allow youngsters to sign up to KiwiSaver and get that $1000 kick-start—Hon Ruth Dyson: From when? From next week?KRIS FAAFOI: Not from next week but backdated to 2 p.m. on 21 May. I would like to ask the Minister in the chair how taking away that $1000 kick-start matches with encouraging “a long-term savings habit and asset accumulation by individuals”. Because I do not think what the Government is doing in this bill and the purpose of the principal Act being amended match up. KiwiSaver was set up by Dr Cullen in the last Labour Government to do as the purpose says—to encourage long-term savings. Not by people of age but across the range and as has been said in this Chamber many people have taken up that opportunity. The $1000 kick-start was seen as one of those cherries for people to sign up. But as of 2 p.m. on Thursday 21 May 2015 as is amended in this bill Kiwis will no longer be able to do that. One of the Supplementary Order Papers that I have to clause 5 is to amend the bill in its current form—The CHAIRPERSON (Lindsay Tisch): We are not on clause 5.KRIS FAAFOI: —but which will change obviously this KiwiSaver Act 2006 to continue to encourage that long-term savings habit that is set out in this piece of legislation. I would ask the Minister in the chair—and I do appreciate that he has taken some calls before—to try to explain to those at home who might have young children as to why before 21 May at 2 p.m. it was a good incentive for them to sign their children up to KiwiSaver with a $1000 kick-start but now it is not. Or is this simply a measure to raise revenue to use for other things? Because that is what this seems like because the principal Act as it stands is pretty clear about what the purpose is and what the Government of that day was trying to achieve. That is long-term savings habits. I would think that starting saving from birth until 65 is pretty long-term. But now this Government is taking away the ability for Kiwi families to do that.On my Facebook site over the lunch break people have commented about how it was a really good thing that when we had a child the $1000 incentive was there to make it an even better incentive to join up to KiwiSaver. But now under the amendment of the KiwiSaver Act 2006 that is no longer there. I want to know from this Government why it does not think it is a good thing for Kiwi parents to start their kids saving from the very earliest of ages. Because that is essentially what this is doing. Many parents have taken up the opportunity to get their kids started almost from birth and this Government is taking that opportunity from them.GRANT ROBERTSON (Labour—Wellington Central):Thank you very much Mr Chair.Hon Gerry Brownlee: I want to hear more from David Clark.GRANT ROBERTSON: Look I agree with Mr Brownlee. We all want to hear more from Dr David Clark. The really good news for Mr Brownlee is he is going to get numerous opportunities to hear from Dr David Clark over the coming hours in this Chamber. I am sure Gerry Brownlee will hang on every single word that comes from Dr David Clark. I want to speak to clause 3 of this bill.Hon Ruth Dyson: That’s good because that’s what we’re debating.GRANT ROBERTSON: That is right. That is my first key performance indicator for the day ticked off: I am on the right clause. The reason I want to take a call on clause 3—Hon Gerry Brownlee: Come clean and tell us you know nothing about it.GRANT ROBERTSON: Oh I see; here we go. Mr Brownlee asked whether I know anything about clause 3. We will read it out slowly for the Leader of the House: “Principal Act amended—This Act amends the KiwiSaver Act 2006.” There are four numbers in a row. You will recognise the 2 then two 0s and a 6. If you put them all together in one that is 2006. That is in clause 3 of the bill. There will be many thousands of New Zealanders hanging off this debate watching it on television and listening to it on the radio who will be asking why it is—Hon Gerry Brownlee: Wondering why you’re wasting time.GRANT ROBERTSON: Ah! Mr Brownlee says he is wondering why we are wasting time. There is only one person in this Chamber who can explain—and that is Gerry Brownlee—why it is that he is overseeing a piece of legislation coming into this Chamber that retrospectively takes away people’s rights. It retrospectively takes away $1000 rips it out of their pockets. Gerry Brownlee can explain that. He is the one wasting the time and money of New Zealanders by having us here in this Chamber. So clause 3—Hon Gerry Brownlee: Will Labour undo this?GRANT ROBERTSON: Oh yeah! Oh yeah! We have been there; we have been there Gerry because we believe in savings. We believe that every New Zealander should actually have a right to savings. Every New Zealander should have the ability to put something away for the future—not just Gerry Brownlee’s rich mates but young people and people from low-income backgrounds. They should all have the opportunity but Gerry Brownlee wants to take that away. He wants to make KiwiSaver only for the people who can walk in on the first day and say: “I can do KiwiSaver off the bat; I know I have got enough money.” It is the people who would not have saved before this incentive came in whom Gerry Brownlee does not want to have in KiwiSaver. [Interruption]Responding to those interjections I want to return to clause 3. There will be people out there watching and listening who are wondering why it is that in each bill—Ron Mark: Oh they’re glued to the television!GRANT ROBERTSON: —they are; they will be glued to this—that comes before the House the principal Act is named in a clause on its own. It does seem a little unusual to have a clause that simply says: “This Act amends the KiwiSaver Act 2006.” The reason that clauses like that are put in legislation is that people will look at an amendment bill like this and ask: “What are they doing? Why on earth are they putting this measure up?”. It refers people back to the KiwiSaver Act 2006 to enable them to understand what it is that is being amended here.You would look at this piece of legislation and you would wonder why on earth someone would introduce legislation to take the incentive away from being part of the scheme. That is what the KiwiSaver Act 2006 is about: “The purpose of this Act is to encourage a long-term savings habit and asset accumulation by individuals who are not”—here is the one for Mr Brownlee—“in a position to enjoy standards of living in retirement similar to those in pre-retirement.” It is very important to have clause 3 in the bill because it refers people back to the actual purpose of KiwiSaver. If they were looking at just this amendment bill they would be confused. They would think: “Well KiwiSaver is a scheme just for people who can afford to get into it. We do not need to have any incentives for people to get into KiwiSaver.”When we were sitting in the Budget lock-up in a sort of airless room downstairs on Thursday we read this and we thought: “This is ridiculous. This is taking away the incentives that are in the KiwiSaver Act 2006.” And then we saw the retrospectivity. Why would you make it retrospective? Why would you do that? You do it because you know that this is a good incentive. It has been made retrospective because if the Government waited before putting this legislation through thousands of people would sign up to KiwiSaver. Is that not the point? Is that not the very point? The reason the Government is doing this retrospectively is that it knows that this is a good incentive that it is actually a useful part of the scheme. The bill amends the KiwiSaver Act 2006 in a way that actually in my opinion undermines the purpose.Paul Foster-Bell: What’s in it for Gene Simmons?GRANT ROBERTSON: Paul Foster-Bell I have to say would probably look better in Gene Simmons’ make up than he does at the moment. He is clearly a long-term fan of glam rock. We on this side of the Chamber can all see that. Actually to be honest I think Paul Foster-Bell is a bit more Gene Pitney than he is Gene Simmons. [Interruption] No Mr Foster-Bell if you want to be Richard Simmons you need to get to the gym a bit more often OK?Hon Member: Oh that’s unnecessary.GRANT ROBERTSON: That is what he just called me by the way. Where were we before I was so rudely interrupted?The CHAIRPERSON (Lindsay Tisch): Clause 3.GRANT ROBERTSON: That is right—clause 3 of the bill. That is right. As you Mr Chair indicate by your hand movements clause 3 is a very small clause that is about naming the Act that is being amended here.I think it is very important for all members of the Committee to consider again what the purpose of the KiwiSaver Act 2006 is. When KiwiSaver was brought in National Party members never liked it. They never liked it because it reminded them of an earlier Act that actually created a universal comprehensive compulsory superannuation scheme that their former leader Sir Robert Muldoon came along and pulled apart and that would have been worth $200 billion or maybe $500 billion - odd dollars today. That Act from the 1970s could have been what is being amended today but no today it is the 2006 Act that is being amended.This clause allows us to refer back to the purpose of the KiwiSaver Act. I got halfway through that before I was interrupted. The Act aims to increase individuals’ well-being and financial independence particularly in retirement and to provide retirement benefits. To that end the Act provides for the KiwiSaver scheme to facilitate individuals’ savings principally through the workplace. It is an excellent Act with an excellent purpose being thoroughly undermined by this amendment bill today. It is undermined by taking away the incentive that has made a huge difference to whether or not people sign up to the scheme. Just today—Hon Gerry Brownlee: Why means test it?GRANT ROBERTSON: Why means test it? Gerry Brownlee wants to means test KiwiSaver ladies and gentlemen. That is what he wants to do. There is only one political party that has tried means testing of superannuation and that is the National Party. That was Gerry Brownlee’s party. What did you think of it Mr Brownlee when National went for asset testing? What did you think of that?Hon Gerry Brownlee: I am really interested in what Andrew Little wants to do.GRANT ROBERTSON: What do you know? He does not want to answer—he does not want to answer—because it was his party that went down the path of asset testing. It was his party that wanted means testing for superannuation. I stand proudly for a party that has worked hard to give people security and dignity in retirement by introducing the KiwiSaver Act 2006 by starting the Cullen Superannuation Fund and by keeping superannuation universal. It is members on that side of the Chamber who have got something to answer for when it comes to cutting back—eight cuts to KiwiSaver asset testing on superannuation and Sir Robert Muldoon taking away a fund that would have been compulsory superannuation. That is your legacy Mr Brownlee. That is the legacy you should get up on your feet to try to defend.On this side of the Chamber we are proud of the KiwiSaver Act 2006. We are proud of the fact that we have given New Zealanders the kind of dignity in retirement that you and your cronies would deny them. That is what this bill is about. This bill is about taking away from ordinary working New Zealanders a little bit of an incentive to get into saving—500000 New Zealanders. That is what they are budgeting on—500000 New Zealanders. It is taking away that $1000 from them. That is the record of a party that does not support dignity in retirement for all New Zealanders that never liked the KiwiSaver scheme and that has undermined it from day one of getting into Government. This is just the latest step on that path—amending the KiwiSaver Act 2006 by pulling the rug out from underneath people taking away the very thing that allows those people from low-income backgrounds to get in. Just today I got an email in my in-box when I got back from Auckland to tell me—Paul Foster-Bell: Just the one.GRANT ROBERTSON: I will explain to you later what emails are Paul. I got this email from a constituent saying that they had wanted to join KiwiSaver they were waiting to join KiwiSaver and they had just got a full-time job that would allow them to do this but now it has been ripped away by a Government that simply does not care enough.JAN LOGIE (Green):I rise to take probably a fairly short call on clause 3 of the KiwiSaver Budget Measures Bill the amendment to the principal Act the KiwiSaver Act 2006.Hon Gerry Brownlee: Oh you’ll spin it out.JAN LOGIE: I may not Mr Brownlee. I may not spin it out. There is a valid point I would like to make in relation to this. This is just about amending the KiwiSaver Act 2006. As has been mentioned earlier it relates to the purpose of that primary Act which I also want to refer to. The purpose of the KiwiSaver Act is to encourage a long-term savings habit and asset accumulation by individuals who are not in a position to enjoy standards of living in retirement similar to those in pre-retirement. That is a key point I would like to address. By amending this Act we need to consider the purpose of the original Act and the role that the $1000 kick-start incentive plays in achieving that purpose.The advice that I am looking at from the Inland Revenue Department from 2011 when it was considering the removal of that kick-start programme was that “this could damage KiwiSaver’s attractiveness to new members. There is a strong psychological boost attached with such an early initial increase in a member’s funds and on balance the potential damage to public perception and to the initial attractiveness of KiwiSaver outweighs the diminishing value of fiscal savings made by reducing or removing the iconic kick-start payment.” So there we have just a few years ago advice directly from the Inland Revenue Department on evaluating the scheme and potential cost-benefit analyses of removing this exact provision of the kick-start contribution. The department is telling us pretty clearly that there is the potential to undermine the entire purpose of the Act. And here we are in Parliament passing this bill under urgency with no ability for the Inland Revenue Department to inform members of Parliament around whether it has potentially changed its mind since then—give it some benefit the Government—or not and there is no ability for the public either to contribute to that point.I feel compelled as well to mention the point around ethics in this provision. This is focused on individuals who are not in a position to enjoy standards of living in retirement similar to those in pre-retirement. I do feel compelled to mention because it has particular value in relation to the kick-start the increasing number of New Zealanders now for whom superannuation represents a step up rather than a step down in terms of their incomes. All too many people with disabilities who are locked out of the employment market or who for reasons of sickness are on a benefit are living below the poverty line. When they reach the age of retirement to them superannuation is just so much more generous than the conditions that they are living in on a daily basis. We have such low poverty in our older population relative to our younger population—a rate of 3 percent compared with over 20 percent in our children—that we do need to be looking at that issue and we do need to be looking at levels of debt in this country and savings is a key aspect of that.The most recent research that we have available to us shows that the top 10 percent in New Zealand own over 51 percent of the wealth and the bottom 20 percent of New Zealanders—and you know that is a fifth of our population 20 percent stating the obvious—have zero or little wealth and are often in negative. They are in debt. This $1000 this whole purpose of KiwiSaver is in some part to shift that round. It is actually just to say that as a society we are all better off the more equal we are. It is the role of Government when the market fails and actually I would just say in terms of helping us look after each other to recognise that we are all in this together. There is a role for Government and that relates to the purpose of this clause the bill and the purpose of the KiwiSaver Act 2006. Thank you.Hon DAVID CUNLIFFE (Labour—New Lynn):Clause 3 is relating this back to the principal Act which of course is the KiwiSaver Act 2006. In this short call I want to go back to why the KiwiSaver Act was put in place in the first place. These remarks are foreshadowed by the earlier call that I took on clause 2.There were always three separate and mutually reinforcing objectives around KiwiSaver. The Government seems to be ignoring two of them. The first one which is common ground is that KiwiSaver helps New Zealanders save. In particular it helps those who otherwise would have low savings rates. One of things that Labour abhors is that the removal of the kick-start contribution weakens the incentives which are particularly important for those who have the least and therefore actually thwarts that objective.The Inland Revenue Department study upon which this piece of legislation has been based is in our view a very narrow and very flawed piece of work for several reasons. Firstly it ignores the broader goals which I will discuss in a second. Secondly because it talks about leakage from a target group which is low-income low-saving New Zealanders it does not address the fact that there is a broader benefit for all New Zealanders saving. We would say the Government releasing that Inland Revenue Department study on the same day that it put the legislation into the House is really just political cover. We do not think that it has a high level of analytical weight that can be attached to it.What are the other two objectives beyond helping individual New Zealand families save? The first is actually touched upon briefly in the Government’s Fiscal Strategy Report released this week. On page B.29 it is a goal of the Government to reduce “… government debt through higher public savings [plus put] New Zealand in a better position to cope with the next economic shock or natural disaster. It helps to raise national savings maintain credibility with international lenders reduce finance costs and allow the internationally competitive sectors of the economy to grow.” It goes on to talk about the advantages of the New Zealand Superannuation Fund but interestingly enough does not mention KiwiSaver per se.So it is common ground between the two sides of the Chamber that we need to grow New Zealand’s savings. Members opposite are putting all of their eggs in the basket of public saving reducing the Crown’s debt. The problem with that argument is that it misses the fact that actually only 15 percent of New Zealand’s total debt is public and 85 percent of it—Brett Hudson: Borrow and spend. Nothing changes.Hon DAVID CUNLIFFE: These are facts. Listen to the facts. Eighty-five percent of it is private debt. If we are going to turn New Zealand round if we are going to become more financially self-sufficient this is the reason that the KiwiSaver Act 2006 was set up. Clause 3 hooks this amendment to that Act so it is entirely within scope I think to reprise the objectives of that Act.The key thing is to recognise that growing New Zealand’s total savings position must be driven off private savings and we must therefore have an effective KiwiSaver scheme as well as an effective New Zealand Superannuation Fund. If we do that we move to the third argument which is that we affect a whole lot of macroeconomic variables in a really positive way. What are they and why do they matter?Our savings deficit our gap between what we earn and what we spend by mathematical certainty is going to be the same as the difference in our current account between what we import and what we export in terms of capital. So our savings deficit will in the long run equal our current account deficit. New Zealand’s problem is that we do not pay our way in the world. That is just a fact and that is something that both sides of the House have been grappling with. In order to do that the purpose for which the 2006 Act was set up was to grow our savings position. KiwiSaver is one of the most important tools in the public tool box to do that. Without it we would be sunk. We must keep it strong.At the last election there was a competition between the policies of the two major parties in terms of how to grow New Zealand’s savings rate. I think it was the New Zealand Institute of Economic Research Business and Economic Research Ltd or both that did some comparative analysis between the two. What they showed was that Labour’s plan was going to grow national savings by about three times or four times the rate of change of National’s. That was before National took the kick-start component out of KiwiSaver. I come back to the point that my colleague Grant Robertson made earlier: this is not the first time—DAVID BENNETT (National—Hamilton East):It is great to be able to take a call on this part of the bill. It is pretty rich for Labour members to come in here today and spout on about KiwiSaver and the $1000 when at the same time they are telling those exact workers that they are not going to be able to retire at 65 and if they do retire at 65 they are going to lose more than $1000 in being income tested. It is all right for them to say that it makes people feel good to have $1000 in their hands when they are 21 but when they are 65 they will still have to be working in the freezing works on the farms and doing that hard labour because the Labour Party will not let them retire. That is the reality of what Labour is saying here today. As for that $1000 Labour is going to borrow that $1000 to put into the hands of people today.There is a report that came out from the Inland Revenue Department today and it showed that 38 percent of people who have gone into KiwiSaver have never made a contribution—38 percent of the people going into KiwiSaver do not put in anything into that programme. What does that show? That shows that the Labour Party is looking after its rich mates—it is looking after its rich mates who can afford to put their kids into KiwiSaver. Labour is looking after those people who actually do not do the work who are not in KiwiSaver who are not the people out there doing the hard yards in our country. It is looking after the people who use and abuse the system. Those are Labour people and that is what Labour supports. They are the 38 percent of people who are in KiwiSaver who have only put their money—Hon David Cunliffe: What a bunch of drivel.DAVID BENNETT: It is not dribble; that is the report.Hon David Cunliffe: Absolute drivel.DAVID BENNETT: It is not. Read the report. Go on to the New Zealand Herald website and read the report and you will see Mr Cunliffe that 38 percent of the people you are talking about are not the people whom we need to be involved in savings and getting ahead in this country.It is really rich for Labour members to come here and attack this bill when Labour does not even look after the people they are talking about. We are looking after those people. For the first time in 43 years we went out there and did something for those people. We did not do what the Labour Party is doing now—looking after its rich mates just to buy votes for the next election.Hon NANAIA MAHUTA (Labour—Hauraki-Waikato):Having listened to that contribution I felt compelled to get to my feet and talk about the KiwiSaver bill. That 38 percent that he was talking about is more than likely to be under-5-year olds—parents who opened up a KiwiSaver account so that they could have a prospect of their child having a nest egg when they get older. [Interruption] Oh my gosh! Where is he from? And the $1000 that he is taking away from them is from the future generation and those parents who had a hope that they might have a nest egg.In speaking to clause 3 of the bill it is really important to go back to the principal Act. It is important that we create a generation of savers. In fact if you go to a number of schools—and many of us will remember the days or some of us will remember the days when you had the old PostBank deposit book and you took a gold coin—Ron Mark: My squirrel account.Hon NANAIA MAHUTA: Yes your squirrel account. You took your gold coin and you were able to save and by the time you left primary school you had a few savings.Well those days are gone. In fact what we knew when KiwiSaver was initiated was that there was a generation that had not known what saving was all about until KiwiSaver came along. The $1000 kick-start helped those families who are in the middle and working hard earning two incomes and want the prospect of having something for their kids when they turn 18 and can earn and have a little bit of a savings history to be able to continue to save. I think that is a good idea. Do you not? If you were listening to the Government you would have people think that this $1000 is being taken away from the most vulnerable. The reality is the most vulnerable cannot save. But those hard-working families who do have two incomes and want the prospect of their children having a nest egg when they get older will suffer.Mr Bennett knows like I know having visited St Vincent de Paul that the working poor is becoming more of a prospect in Hamilton than ever before. These are the people who go to St Vincent de Paul and who do have an income. They are working. They still have to go to these services to get a food parcel. He is taking $1000 away from them.That is a shame because what we know is that it is more important now than ever before to ensure that people can save for their future because they cannot rely on universal superannuation. In fact people do not know from one minute to the next whether or not the Government will actually continue to put money into the superannuation fund. But here is the thing for good New Zealanders who are listening to this debate on a Saturday morning when the Government is putting through under urgency this policy to take away $1000. What is it saying to working New Zealanders? It is saying that it is going to pull the rug out from under them. The first bit of legislation that it put into the House under urgency was about the child hardship grant raising the abatement—The CHAIRPERSON (Lindsay Tisch): Order! [Interruption] Order! Clause 3.Hon NANAIA MAHUTA: —actually takes away from working families and that is the point of the kick-start payment. Removing the kick-start actually takes away from those families who are working and do want the prospect of being able to save for their children. When Mr Bennett talked about the 38 percent who were not putting anything into KiwiSaver I thought to myself what planet is he on? He is certainly not in touch with the real world.In fact I have met a number of parents who are delighted with the kick-start payment who have said that for the first time they can open up an account for their child and then just put a little bit away over time—a little bit at a time. Then by the time their children reach 5 by the time they reach 10 the parents can talk to their child about this little nest egg that is growing. By the time they reach 18 they can say to their child that it is their time. In fact many parents have said that they are hoping that their child will get a job at 14 just doing little things like selling feijoas on the side of the road or something like that. But whatever it is it is about parents trying to teach the next generation that saving for the future is really important. The National Government is taking away the $1000 contribution from working families who want the hope and the prospect of a nest egg for their children. It is a shame and it is a shame that the Government is doing it under urgency.JAMES SHAW (Green):I would just like to speak very briefly about clause 3 as well which amends the KiwiSaver Act 2006. Specifically we are arguing the purpose of the original Act. I also want to respond to David Bennett’s wilful misinterpretation of the data. He referred to the 38 percent of people who have not made a contribution since they opened their KiwiSaver account. National calls itself the party of aspiration. The 38 percent of people who have set up an account have done so because they aspire to one day earn enough to put money into the KiwiSaver account. The only reason they have not done so is that they do not earn enough money right now. The $1000 incentive has got them to open up that account and leave it open until the day that they aspire to earn enough money to put in it. So by taking away the incentive you are taking away any reason for them to open those accounts at all. So I would expect that you will see the number of accounts go down as a result of this policy.I have been asking this question over and over again during the course of this debate and I have not received a single response yet: what do you expect to happen to the rate of take-up of KiwiSaver once you have removed the incentive that 92 percent of people understand is there and available to them? Do you expect it to go up do you expect it to go down or do you expect it to stay the same? You have not responded to that question. When you take away the incentives you are going to be lowering the rate of take-up of the KiwiSaver programme thereby undermining the purpose of the original Act.Hon RUTH DYSON (Labour—Port Hills):Can I say to the member who has just resumed his seat James Shaw before I talk specifically to clause 3 that I think what he asked is a really important question because it does go to the heart of why this legislation is being introduced what the Government is hoping to achieve and obviously why we are doing it under urgency. I want to address my contribution in relation to clause 3 “Principal Act amended—This Act amends the KiwiSaver Act 2006” to three points. The first point is: what was the purpose of the principal Act? What was the point of the legislation as passed in 2006? The second point is: what is the purpose of the amendment that we are debating? The third point which again gets to the question that was just raised by my colleague from the Green Party is: why are we doing this under urgency?Unlike others who have referred to the legislation itself I referred back to the Hansard of the KiwiSaver Bill debate in 2006 and I found two really interesting points that I would like to draw to the attention of the Committee. The first point refers to some comments that Michael Cullen made when he introduced the legislation. He said: “The KiwiSaver Bill represents a landmark in social and economic legislation. Saving and investing is the foundation of the future wealth of our country and of us as individuals. KiwiSaver adds a new important element in the savings landscape providing a vehicle to encourage all working New Zealanders to set aside a portion of their earnings to fund their long-term income security.” That sounds pretty good to me.Mr Cullen went on to describe how it was the third in a set of measures that the Government of the time had introduced to restore integrity and security for older New Zealanders. The first measure was to restore the level of superannuation. I heard the Minister Gerry Brownlee crowing this morning about how National had put the level of superannuation up every year for the last 7 years. Well that is good. It is the law so I would hope that that is what the Government did actually. When we were in Government we made it the law because the previous National Government had cut the level of superannuation to a point where older New Zealanders just could not exist on what their level of superannuation was.The second tenet in the principal Act was obviously establishing the New Zealand Superannuation Fund a fund that I know has not received any contribution for years under the National Government. It is another key point in our social and economic security for the future and there have been no contributions under the National Government. There have been tax cuts for the wealthiest New Zealanders—The CHAIRPERSON (Lindsay Tisch): Order! Clause 3.Hon RUTH DYSON: —but nothing for the New Zealand Superannuation Fund. And obviously the KiwiSaver scheme as set up by the principal legislation was the third tenet.If I go to the votes on the primary legislation the parties that voted for it were the New Zealand Labour Party New Zealand First the Green Party United Future and Progressive. They all voted for the introduction of KiwiSaver in the principal legislation which we are discussing under clause 3. The parties that voted against the establishment of a savings scheme that was so vital to our social and economic future were the New Zealand National Party—shock; is everyone shocked to hear that—the Māori Party and ACT. Well that was in 2006. Not a lot has changed since that time except the numbers unfortunately. So those were the parties that voted for and against it. This legislation in my view goes absolutely against the point of the principal Act.Other contributions earlier in this debate have asked that very question: what is the status of an amendment to an Act that actually undermines the primary purpose of the principal Act? In my view what the KiwiSaver Budget Measures Bill does is to undermine the fundamental purpose of the principal Act. We call it an amendment in this debate—that is how it is described in clause 3 of the bill—but it takes away the very incentive that was at the heart of changing the savings culture in New Zealand and making it more possible for people to see the value of savings particularly people for whom saving is very hard. I am not—JAMI-LEE ROSS (Junior Whip—National):I move That the question be now put.The CHAIRPERSON (Lindsay Tisch): I am going to accept the closure motion. We have canvassed the very narrow provisions of this clause.A party votewas called for on the questionThat the question be now put.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Motion agreed to.A party votewas called for on the questionThat clause 3 be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Clause 3 agreed to.Clause 4 Section 226 amended (Crown contribution: kick-start contributions)A party votewas called for on the questionThat clause 4 be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Clause 4 agreed to.Clause 5 Section 226 repealed (Crown contribution: kick-start contributions)Dr DAVID CLARK (Labour—Dunedin North):Thank you for the opportunity to speak to clause 5. Labour has moved a number of amendments that I think are well worth considering and would actually be worth having some debate on. The first is in the name of Kris Faafoi and it refers to the ability for the kick-start payment of $1000 to continue to be accessed by babies essentially. This is designed to ensure that those with newborns are encouraged to take up this scheme so that a savings fund can be established for the child as they grow up with the aspiration that out of it they may be able to afford their first house or they may in some way be able to supplement themselves in retirement. However they do it it kicks off a savings habit and that of course is what the $1000 was intended to do.So that amendment in the name of Kris Faafoi a very good amendment would allow children up to the age of 6 months to be enrolled in the scheme and still be able to access that $1000 kick-start payment. The second amendment that has been moved is in the name of Jacinda Ardern. It proposes that people who are starting a new job should be allowed to access that $1000 kick-start payment.These are all as you will appreciate variations on parts of what is being cut. They are preserving different things according to the principal aim of the Act which is to encourage a savings habit. This amendment in the name of Jacinda Ardern makes it possible for people when they start a new job to receive the kick-start payment so they are off to a flying start in their savings regime. It will encourage them not to opt out because they will see the opportunity there to continue and grow their savings at the time they are thinking about those things—at the time they start a new job.The third amendment that is proposed is in the name of Annette King. It provides an option for people who have been in the same job for the whole time since the KiwiSaver scheme started—since 2006 perhaps or earlier—and who may well think to themselves having watched what has happened during the Budget that this kick-start thing is something that they do not want to pass by. They have been in the same job for a long time and if the Government takes away the right to get that kick-start $1000 payment for people who are starting a new job this amendment enables them to say: “Well actually now I am going to grab that opportunity. I am going to grab that opportunity because my retirement savings are important to me.”These are all measures that are designed in some way to ensure that people can access that $1000 so that the half a million people who we are told will miss out in the next 4 years are limited—so there will not be half a million people who will miss out; it will be fewer. These are sensible amendments from Labour and I think they are worthy of consideration if not lengthy debate. They are certainly worthy of consideration by this Committee and I think that members opposite should think about voting in support of some of these if they really believe in their heart of hearts that they want to increase savings in this country.JAMES SHAW (Green):I just wanted to follow on from David Clark’s contribution. The Green Party is also moving an amendment Supplementary Order Paper 81 to clause 5 of the KiwiSaver Budget Measures Bill which reads: “Replace clause 5 (page 2 lines 22 and 23) with: 5 Section 226 amended (Crown contribution: kick-start contributions)—In section 226(1) replace ‘is a member or must become a member as provided by section 15(1)(b) or 36(1)(b)’ with ‘is a member or must become a member as provided by section 15(1)(b) or 36(1)(b) and holds a community services card issued pursuant to the Health Entitlement Cards Regulations 1993’.” The intention here is to retain the $1000 kick-start for people who hold a community services card.If you look at the original intention of the primary Act it includes the language that the purpose of the original Act is to support “asset accumulation by individuals who are not in a position to enjoy standards of living and retirement similar to those in pre-retirement.” In other words what we are trying to do is to say that if the Government is committed to reducing the cost of the overall KiwiSaver programme by cutting the $1000 kick-start contribution then at the very least the amendment should not undermine the original purpose of the Act which is to support asset accumulation by individuals who are not in a position to enjoy those standards of living so the amendment to retain the $1000 kick-start for people who hold the community services card would enable the original purpose of the Act to continue to still be fulfilled.We chose the community services cards as the proxy for low income. We realise that there are others—there may be others that have more specificity to them—but part of this is to make it easy to administrate. So when someone is choosing to open a KiwiSaver if they are able to present their bank or KiwiSaver provider with a community services card then that is just very easy to administer as opposed to having to prove their income levels at the date at which they applied for the card and so on. We do not believe that this would add significant cost to the Crown because first so many people are already in KiwiSaver. There are about 600000 community services cardholders who are not already superannuitants. Many of those people will already be in KiwiSaver. Of the ones who are not in KiwiSaver some of them simply will not open an account because they do not believe that they have got the income to do so. But for those people who do then the incentive would remain in place. As we know the incentive scheme has worked extremely well so it would just ensure that those people retain some of that support.My colleague Jan Logie earlier referred to an Inland Revenue Department report which pointed out that 92 percent of the public have recognised the $1000 kick-start incentive—that they were aware of it and that was a good reason for them to sign up. There are real substantial issues here to do with embedding inequality because if you are essentially saying to people that KiwiSaver is really honestly a preserve of the middle and upper classes and for people who are on lower incomes it does not really matter and we do not really care about getting them into the programme then in fact not only does that undermine the original intention of the whole KiwiSaver programme to start with it also further embeds and deepens inequality in this country. When people are in different starting positions and then some of them have got a very attractive KiwiSaver scheme and the rest do not then by the time they get to retirement age those who are on low incomes will be absolutely destitute whereas the wealth of the middle and upper income people will have grown over the course of their life. So we think that this Supplementary Order Paper to retain the $1000 kick-start for community services cardholders is a way—not the only way; but it is a way—of trying to prevent that deepening inequality from happening.Hon Dr NICK SMITH (Minister for the Environment):I want to make just a brief contribution and to answer some of the questions the member James Shaw has raised. First of all there is a certain irony about debating a bill about savings when the very purpose of the KiwiSaver Budget Measures Bill is to help get the Government’s books back into the black. And all I hear consistent with every one of the 7 years we have been the Government is criticism from the Greens and from Labour as to why we are not spending. I am yet to hear a single member opposite give an idea as to how the Government might save money and get the country into the black. Members on the Government benches firmly support encouraging people to save. The Budget for next year provides for $643 million of Government support for saving. But there is a very important difference. Do we subsidise people opening accounts? Or do we subsidise people to save? There is a difference. What we are saying is that providing Government support for saving is something we support. Just opening a bank account actually does not get us far.Now can I specifically respond to the question from James Shaw. James Shaw asked a very pertinent question. He claimed that the number of people in KiwiSaver will decline over the next year. So I checked with the officials. There are currently 2.4 million people in KiwiSaver. Can I make another interesting point. When KiwiSaver was introduced in 2006 Dr Cullen said that “In the year 2015 we project there will be 700000 people in KiwiSaver.” In other words our Government has been successful in better embedding a savings culture with three times as many people in KiwiSaver than what even Dr Cullen projected. But here is the rub and here is the answer for Mr James Shaw. Currently there are 2.4 million people in KiwiSaver. How many are projected to be in KiwiSaver in 1 year’s time? One hundred thousand people more. One hundred thousand people more Mr Shaw will be in KiwiSaver in 1 year’s time because the Government is providing ongoing subsidies amounting to $521 every year for a person in KiwiSaver.I want to make one further point because I would love to get an answer from members on the Opposition benches. I use this quote—it is a word for word quote—“Is it right that a person over 65 on a full-time income should get this income supplement? There is a fairness question there. I cannot commit to keeping New Zealand superannuation universal.” That is word for word by Andrew Little. Does David Parker agree with that? Does Annette King agree with that?Hon Annette King: I raise a point of order Mr Chairperson. It was my understanding that in the Committee stage of a debate we ask the questions and he answers them.The CHAIRPERSON (Hon Chester Borrows): Not a point of order.Hon Dr NICK SMITH: The point of order by Annette King speaks volumes about the embarrassment on the faces of every one of those Labour members. Let me ask the question again. Do they agree with the statement from Mr Andrew Little: “I cannot commit to keeping New Zealand superannuation universal.”? Does Annette King agree with it? Does David Clark agree with it? Does the deputy leader agree with it? Their silence is stunning. The silence is stunning. Can a single Labour member put their hand up if they agree with Andrew Little? Can a single Labour member put their hand up if they agree with Andrew Little? Well can I come to my members. Is there a single member on National’s side who agrees and supports John Key’s statement? Could they put their hand up? Yes indeed. You see that is the difference. We are united. We know what we stand for. What we do not have is a single member of the Labour Party who will support the statement on superannuation from its own leader.GRANT ROBERTSON (Labour—Wellington Central):What an interesting contribution from Nick Smith. It is timely that the Minister mentioned who on that side of the Chamber agrees with John Key. I wonder whether members on that side of the Chamber would agree with John Key when he said the following: “The second issue that I raise is that if Michael Cullen thinks that 25 percent of New Zealanders will have a serious KiwiSaver account in 5 years’ time he is deluded” That was in 2006—in 2006. So hands up how many members on the National side of the Chamber agree with John Key. Come on. There are no hands up. They do not agree with John Key one bit.I have got another option for them. I have got another option. Members on that side of the Chamber either think that Michael Cullen was deluded that there would be 25 percent in KiwiSaver or agree with John Key when he said that Michael Cullen was dreaming about 25 percent. They are the two options. No one is putting their hand up. On that side of the Chamber the guilt and the shame is that by the time the KiwiSaver Act passed in 2006 there was one party left in this House opposing KiwiSaver—one party. Can you guess which one it was? Do you think it was the ACT Party? Was it the ACT Party?Hon Members: No.GRANT ROBERTSON: No. Was it the Māori Party?Hon Members: No.GRANT ROBERTSON: Was it New Zealand First?Hon Members: No.GRANT ROBERTSON: Was it the Greens?Hon Members: No.GRANT ROBERTSON: It was National. The only party left that was opposing KiwiSaver in 2006 was the National Party.That is what this is all about—that is what this is all about. The National Party has never liked this scheme which allows ordinary hard-working New Zealanders to get some extra dignity in retirement. It wanted to keep that only for its mates who could already afford it not a scheme that actually gives all hard-working New Zealanders the chance for that little bit extra in retirement. National asks: why not take away the incentive? Why should we not take away the incentive? I say: because the very people for whom that will make the biggest difference are those low-income New Zealanders those young New Zealanders who find it hard to begin saving.We can come back to John Key because he had an awful lot to say about the KiwiSaver Act 2006. I will also ask Government members whether they agree with the following statement John Key made about Michael Cullen in 2006 and the KiwiSaver Act: “If the Minister of Finance had not been so lazy he could have gone and had a look at what President Bush did.” That is always a good idea is it not? Go and have a look at what President Bush did. That went well! There are no hands up on the National Party side of the House. They do not support John Key on that one either.Here is another one. Here is another from John Key. He said: “Michael Cullen knows full well that when there is mortgage diversion”—Hon Dr Nick Smith: What year?GRANT ROBERTSON: 2006. Keep up Dr Smith. 2006. I am sorry Dr Smith does not remember that because at that exact moment John Key was trying to take over the leadership of the National Party and Dr Smith was doing Bill English’s numbers. That is why he does not remember. He was too busy doing Bill English’s numbers. Here is what John Key said: “Michael Cullen knows full well that when there is mortgage diversion”—Hon Dr Nick Smith: What year?GRANT ROBERTSON: —2006. Keep up Dr Smith.Hon Dr Nick Smith: Oh you can’t agree with what your leaders did yesterday.GRANT ROBERTSON: I am sorry that Dr Smith will not remember that because at that exact moment John Key was trying to take over the leadership of the National Party and he was doing Bill English’s numbers. That is why he does not remember. He was too busy doing Bill English’s numbers. So here is what John Key said: “Michael Cullen knows full well that when there is mortgage diversion a savings account is turned into a chequing account.” Rubbish! National members are not here today saying “Let’s get rid of that.” They are not here today saying “Let’s not have people borrow for their first home.” What they are doing is what they think they can get away with which is undermining the incentives to be in the scheme.The reason we are here under urgency the reason the National Government put this bill in as retrospective legislation is that this incentive works.That is why because it knows if it waited and the bill went through the normal process and there was a proper select committee process thousands of New Zealanders would sign up.Chris Bishop: Past tense—it worked.GRANT ROBERTSON: And just how bad would that be Chris Bishop if thousands of New Zealanders got to enjoy being part of a savings culture? He would rather cut them off at the knees. The National Party has always hated KiwiSaver and this is just another example.The CHAIRPERSON (Hon Chester Borrows): Order! Just a moment—I will take a call in a moment. I just want to make the point that the last two speakers Nick Smith and Grant Robertson strayed a heck of a long way around the park and have given each other a slap. It was one each way and now we are coming back to a more confined debate giving leeway for the fact that there is no select committee process and taking into account all of the things that I am sure there would be numerous points of order on if I failed to mention them in my preamble to the next call.JAN LOGIE (Green):I would like to make a few points in relation to the substantive clause of this bill.Hon Gerry Brownlee: Oh not briefly again!JAN LOGIE: I missed Mr Brownlee’s comment. I figure that is probably a good thing. I would like to just address Nick Smith’s comments though. He thought it was ironic that we seem to have so much concern on this side of the Chamber about debt when this was about trying to keep the Government’s books in the black. Well he may have noticed they are not in the black. They have not been in the black for quite a while—like ever.Hon Nanaia Mahuta: 7 years.JAN LOGIE: Oh gosh 7 years and you still have not managed it. Sorry Minister it is salt in the wounds I imagine. If we are talking about debt I would like to just point out to the Committee a little bit of a history lesson and I do think it is very relevant to this piece of legislation and what it is doing. Government debt per capita in 1990 was $10423. In 2008 it was $2408 and now in 2014 under this Government’s watch it is $13289. For a Government that is supposedly so concerned about its books and its levels of debt it has been overseeing a massive increase in the level of Government debt from a very low level when it came to power of only $2408 per person.I want to also call out both the main parties in this Chamber actually around the trend we have seen with household debt and with individual debt in this country which is specifically relevant to this bill. In 1992 the average household debt in this country was $33920. Now in 2015 the average household debt is $128050 and that has been inflation adjusted. We see here a pattern where in fact I would argue that Government debt per capita went from I think too high levels down to very low levels because it had been transferred to the individual. We are seeing that in the very high levels of personal debt through student loans; increasingly through speculation in housing; and through the Government’s lack of management of the housing market. There are now unsustainable levels of personal debt. Now we are also seeing under this Government escalating Government debt. So both sides of that picture are doing badly. The Government is not focused on getting into surplus. It is not focused on the well-being of our society as a whole. I do want to make a point here around income—Chris Bishop: Let the professor have a go.JAN LOGIE: Sorry? Let the professor have a go? Well we claim our knowledge in different ways in this party. I would like to talk just a little bit about intergenerational inequality in relation to this bill and to reference some common understandings of generational wealth and distribution.I am just thinking again about the situation we are in in New Zealand and the importance of saving schemes. After so much of the costs of participating in society have been passed on to individuals there is a common understanding that wealth distribution is strongly affected by life cycle. It makes sense that when you are younger you earn less and you have less wealth. There is an expectation that you will accumulate that over time as you pay off your student debts and that you have the ability to earn more and that you get your house and you pay it off. So you get to over that cycle increase your wealth. Well I just want to think about that. That is the traditional way it has been done. The reality now is that the average woman who has a university degree will be 50 before she pays off her student debt and we have the increasing unlikelihood of young people never being able to buy a house in this country. It is the abandoned generation.FLETCHER TABUTEAU (NZ First):This will be a short speech—[Interruption] Again I would like to take the opportunity to thank the National backbenchers. Specifically in relation to clause 5 which amends section 226 (3) New Zealand First has put forward in Supplementary Order Paper 86 the proposal that we replace “$1000” with “$500”. The reasoning behind that is those Government members and Ministers have stood before this Committee they have argued against their own logic and they have told us that they cannot afford it. They cannot afford it despite the fact that they will not acknowledge that they have taken $7 billion in revenue out of our income stream with tax cuts for the high-income earners. They cannot afford it despite the fact that they have grown Government debt from next to nothing when they came in to approximately $80 billion today—approximately $80 billion.What I am asking those members to do is to show New Zealanders some compassion. Government members would not agree that we give some New Zealanders some time. No we cannot give them time to adjust to these changes—that would be abhorrent! The logic behind their changes they argue was that $1000 is not a cost-effective incentive. They are saying: “Let’s take it away.” But they will not give New Zealanders time to sign up and use it. So they are countering their own argument. New Zealand First has said well OK if $1000 is too much to contribute to a New Zealander’s start-up into their lifelong saving habits then show a little bit of compassion. Show a little bit of understanding. Come down off that high horse and halve it—halve it. Make it $500. Give them something. Members on this side of the Chamber spoke about the motivational aspect of this number. It does make a difference. National please show some compassion.JAMES SHAW (Green):I just wanted to respond to the Minister Nick Smith who I am grateful actually responded to one of my questions. That has been a rare treat during the course of the debate—actually having a response to any of the questions that we have put. I just wanted to check that the Minister said that in a year’s time 100000 more people will have signed up to KiwiSaver—Hon Dr Nick Smith: Correct.JAMES SHAW: —because the member tax credit will be remaining in place. So that incentive still remains within the scheme which I understand. But the Inland Revenue Department report said that the $1000 kick-start contribution was the most effective incentive of the package of incentives within the scheme. I just wanted to refer to the regulatory impact statement which also said that if you were to for example halve the member tax credit then in the next financial year you would save something along the lines of $339 million whereas removing the kick-start saves $175 million. So just halving the member tax credit would actually save more money than removing the kick-start and the kick-start from all the evidence that we have seen so far is actually the more effective component in terms of getting people into the programme.I am just a bit concerned about some of the evidence that we have seen. I recognise that because we are in an urgency process and we are not able to go through the normal standards of scrutiny and hearing from experts some of the evidence is thin on the ground but some of the other things that the regulatory impact statement says give me some cause for concern including page 8. It says that “The analysis has focussed on fiscal savings from changes to KiwiSaver.” We have heard many times over the Government make its case for making fiscal savings for the Crown as opposed to responding to some of the concerns about the impact on New Zealanders. It goes on to say: “We have not undertaken a comprehensive analysis of the effects of these policy changes on other policy issues which have been discussed in the context of KiwiSaver changes in the past.” It says in paragraph 52: “We have not considered the extent to which a reduction in the generosity of the kick start and annual member tax credits will affect the future success (or otherwise) of the HomeStart policy.” In paragraph 55 it says: “it is highly unlikely that the target effectiveness can be materially improved if the target group remains as defined by the Act.” So in other words the principal purpose of the Act is being undermined by this piece of legislation.We get that this will save the Government money. We understand that and we understand the pressure that the Government is under and has put itself under to reduce the deficit and eventually to get the Government books back into the black. We get that but there are still some real questions about why the Government has chosen the particular mechanism it has in removing the kick-start rather than other routes that it might have chosen. We have not yet heard a response to the question of why it is that the Government is implementing this immediately as opposed to over a 6 or 12 or 18-month window to incentivise those who are currently not in the scheme to get into the scheme. We have not yet heard an answer to what the Government’s plan is to increase the savings rate once the incentive to do so is removed.We have not yet heard a response to the ANZ chief economist who said that removing the incentive will reduce the rate of take-up—that was actually my concern that the rate of take-up was going to be reduced. If the Government disagrees with the ANZ chief economist then what is the plan to maintain or increase take-up in the scheme in the future? We have not yet heard a plan for how we handle some of the intergenerational equity issues that my colleague Jan Logie was speaking to. And we have not yet heard a response to why the KiwiSaver is being cut now but the rest of the hardship package does not kick in until the next financial year—why there is a gap there. So there are still I am afraid a number of questions that we do not have answers to but I do thank the Minister for his substantive response earlier.The question was put that the amendment set out on Supplementary Order Paper 81 in the name of James Shaw to clause 5 be agreed to.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the amendment set out on Supplementary Order Paper 86 in the name of Fletcher Tabuteau to clause 5 be agreed to.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the following amendment in the name of Jacinda Ardern to clause 5 be agreed to:Replace this clause with the following new clause:5Section 226 amended (Crown contribution: kick-start contributions)In section 226(1) replace “before they reach the New Zealand superannuation qualification age” with “provided that person A is a person to whom automatic enrolment rules apply under section 10”.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the following amendment in the name of the Hon Annette King to clause 5 be agreed to:Replace this clause with the following new clause:5Section 226 amended (Crown contribution: kick-start contributions)In section 226(1) replace “before they reach the New Zealand superannuation qualification age” with “provided that person A is a person who has been continuously employed by the same business (as defined by section 11(2)) since 2 July 2007”.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the following amendment in the name of Kris Faafoi to clause 5 be agreed to:Replace this clause with the following new clause:5Section 226 amended (Crown contribution: kick-start contributions)In section 226(1) replace “before they reach the New Zealand superannuation qualification age” with “provided that person A is 6 months of age or younger when they become a member of a KiwiSaver scheme”.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.A party votewas called for on the questionThat clause 5 be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Clause 5 agreed to.New clause 5A Section 226 amended (Crown contribution: eligibility under 6 months of age)The question was put that the following amendment in the name of Kris Faafoi be agreed to:Insert the following clause after clause 4:5ASection 226 amended (Crown contribution: eligibility under 6 months of age)In section 226 insert the following subsection before subsection (1A):(1)The Crown must pay 1 contribution to the first KiwiSaver scheme of which a person is a member provided that person is 6 months of age or younger when they become a member of a KiwiSaver scheme.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.New clause 5BThe question was put that the following amendment in the name of the Hon Annette King be agreed to:Insert the following clause after clause 5A:5BSection 226 amended (Crown contribution: continuous employment since 2 July 2007)In section 226 insert the following subsection before subsection (1A):(1AA)The Crown must pay 1 contribution to the first KiwiSaver scheme of which a person is a member provided that person has been in continuous employment with the same business (as defined by section 11(2)) since 2 July 2007.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.New clause 5CThe question was put that the following amendment in the name of Jacinda Ardern be agreed to:Insert the following after clause 5B:5CSection 226 amended (Crown contribution: automatic enrolment)In section 226 insert the following subsection before subsection (1A):(1AAA)The Crown must pay 1 contribution to the first KiwiSaver scheme of which a person is a member provided that person is a person to whom automatic enrolment rules apply under section 10.In section 226(1) replace “before they reach the New Zealand superannuation qualification age” with “provided that person A is a person to whom automatic enrolment rules apply under section 10”.A party votewas called for on the questionThat the amendment be agreed to.Ayes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.Clause 6The question was put that the following amendments in the name of the Hon Todd McClay be agreed to:In clause 6 in new section 240 replace the words before new paragraph (a) with:“Non-compliance with either financial markets legislation as defined in section 6(1) of the Financial Markets Conduct Act 2013 or the Fair Trading Act 1986 is ignored if the non-compliance results from the enactment of the KiwiSaver Budget Measures Act 2015 and either the non-compliance does not continue on or after 22 July 2015 or the non-compliance—”; andIn clause 6 in new section 240(a)(ii) replace “June” with “July”; andIn clause 6 in new section 240(b)(ii) replace “June” with “July”; andIn clause 6 in new section 240(c) replace “June” with “July”.A party votewas called for on the questionThat the amendments be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Amendments agreed to.A party votewas called for on the questionThat clause 6 be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Clause 6 agreed to.Clause 7A party votewas called for on the questionThat clause 7 be agreed to.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 57New Zealand Labour 32; Green Party 13; New Zealand First 12.Clause 7 agreed to.Bill reported with amendment.Report adopted.Third ReadingHon Dr NICK SMITH (Minister for the Environment)on behalf of theMinister of Revenue: I move That the KiwiSaver Budget Measures Bill be now read a third time. As KiwiSaver approaches its eighth birthday it is now time to let the scheme be more about people saving for their own retirement and less about Government top-ups. This bill therefore proposes to remove the incentive payment of $1000 paid by the Government to all new enrolees in the scheme and thereby improve the value for money of the scheme. In short we want the Government’s support to be not for opening an account but rather actually for people saving. This change took effect at 2 p.m. on the date the Budget was read on 21 May. People enrolled in the scheme before this will as a matter of fairness receive their $1000 kick-start contribution. There is always that 3-month wait period and that will still apply.There have been some pretty ridiculous comments from members opposite that somehow this bill should not have been put through with a Budget measure. That is about as sensible as saying that tax changes or increases in alcohol taxes or other such measures should not take effect. We all know what that would do. It would result in a sudden rush of people simply taking the opportunity of having forward knowledge.Dr David Clark: Hang on. The argument was this has no effect.Hon Dr NICK SMITH: The contribution from Dr Clark actually just shows how inadequate he is for Government. If you give people forward notice of rules changing then people simply take short-term advantage and that is not to anybody’s advantage. I sat in this Parliament through nine Budgets under Labour where such changes were made and put through as a Budget measure.The KiwiSaver Budget Measures Bill does not affect other aspects of the scheme and KiwiSaver members will continue to receive employer contributions and the Government-provided member tax credits of $521 per year. That is the Government is going to continue to subsidise KiwiSaver schemes to the order of $640 million each year. As always I am grateful for the efforts of those who have contributed towards the passage of this bill. I want to thank the officials for their work on the policy development. I thank the drafters. This is a bill that is about making choices in a Budget. There is a certain irony that members opposite always want to vote for measures like hardship help for children but they are not prepared to vote for the other changes that make those measures financially sustainable and that is why it is an important part of the Budget.The last point I wish to make in this debate is about the most telling part of the debate. In the last 48 hours there have been these very powerful nine words that will ripple shock through my electorate of Nelson amongst the 700000 receivers of national superannuation and I want to conclude with these words—the words of Andrew Little yesterday: “I cannot commit to keeping New Zealand superannuation universal.” Those simple nine words speak volumes about what the members opposite want to do to the security of the retirement arrangements for hundreds of thousands of New Zealanders.Grant Robertson: He voted for asset testing. He was there. He voted for it.Hon Dr NICK SMITH: I have to say to Mr Robertson that those nine words from Mr Little will guarantee me increased support in my Nelson electorate at the next election. I already have received emails from Grey Power members who are terrified by what those nine words mean and I just simply say to members opposite that when they are dealing with the issue of superannuation they should state very clearly whether they agree with Mr Little’s statement yesterday: “I cannot commit to keeping New Zealand superannuation universal.” That is an answer I am looking forward to hearing in this third reading debate.GRANT ROBERTSON (Labour—Wellington Central):There is one member sitting in the House right now who knows all about how it feels to stop superannuation from being universal and that member is Nick Smith. He was here in the 1990s putting on the surcharge and getting asset testing in place. If there is any member in this House who understands what it means to rip apart universal superannuation it is Nick Smith. That is also the record of the National Government in terms of this piece of legislation. Let us not let anyone watching misunderstand that when KiwiSaver went through Parliament in 2006 there were one or two parties that had some concerns about it at the first reading and the votes were a bit split. The Greens and New Zealand First supported Labour’s bill all the way through. By the time we got to the third reading of the KiwiSaver Bill one party was left opposing it.Hon Ruth Dyson: Who was that?GRANT ROBERTSON: The National Party. That was who was left opposing it and it has consistently undermined the KiwiSaver system—until today when we come here to debate this commitment from the National Party to take incentives to save away from New Zealanders.I went to a lot of electorate meetings during the 2014 election campaign. Wellington Central is an electorate where there are plenty of interested people who come out—Chris Bishop: There are two meetings a night.GRANT ROBERTSON: —that is right—week after week. I think we had about 25 electorate meetings and I listened intently every night to Paul Foster-Bell and occasionally when he was indisposed to Chris Bishop. I listened intently. James Shaw was there; he will back me up on this. At not one of those meetings was there a reference to the fact that this would be happening—that KiwiSaver would be undermined and the incentive taken away. Not once was that mentioned in the election campaign. Not once has it been mentioned in the 6 months that have occurred since then. The National Party in a desperate clawing bid to make next year’s surplus look like it exists has decided to do this because this measure today will save the Government $175 million next year. And what is the figure of the surplus? It is $176 million. So there is a $1 million difference. You have heard of the Swedish rounding that happens at the supermarket when they round up and down. Well this is the “English rounding” to get you to a surplus—a $1 million surplus after the $175 million has been counted from this.This is a broken promise. This is a broken promise alongside a series of other broken promises in the Budget—the surplus promise for example and the promise that there would be no new taxes to which we will come very shortly. Apparently there were to be no new taxes; now we have three—another broken promise. John Key stood up in this House and said that debt would be paid down this year. No it will not. [Interruption] In fact the Budget documents tell us Mr O’Connor that it will be 2019 before any debt is paid down. Debt will be $93 billion by 2019 as well. That is another broken promise and this bill is a broken promise.At this time in the economic cycle this is the thing that New Zealanders will come to understand. This is as good as it gets—3 percent growth this year down to 2.4 percent by the end of the forecast cycle. Dairy prices are not recovering. There is no sign of a plan to grow exports—they are flat-lining as well. This is as good as it gets and at the time when it is as good as it gets what does National do? It takes to KiwiSaver. That is its plan. There is no plan to grow the economy in this Budget. What we have got is a “political management” Budget rather than a Budget to grow the economy and if ever there was of a symbol of that it would be this bill—a bill that takes away from the future. It steals $1000 from future generations. If there was any looking to the future in this bill it would be about initiatives to increase savings.David Bennett: Oh more spending—more spending.GRANT ROBERTSON: Here we go. David Bennett says: “More spending.” This is $1000 to give people some dignity in retirement. Mr Bennett have you got KiwiSaver? He is the one member who does not. He is the one member over there who does not have KiwiSaver. The rest of them all took their $1000. I think Todd Barclay was about 2 years old when the bill went through. He got his $1000 but they want to deny that to the rest of New Zealanders.At the very peak of the economic cycle we have 3 percent growth. In 2006 we had 3 percent growth in New Zealand. We had a surplus of billions and unemployment at under 4 percent. Now with a growth rate of 3 percent we have a deficit and we have unemployment nudging up towards 6 percent. This is as good as it gets. It goes downhill from here and on the other side of the House there is no plan to grow the economy.Chris Hipkins: Look at “Benson and Hedges” sitting together.GRANT ROBERTSON: That is right; a great combination Mr Hipkins. The thing about KiwiSaver is that it has been an enormous success. In 2008 when National came into Government it had already worked out after opposing it in 2006 that it was an enormous success. So National members made the commitment that there would be no major changes. Well there have been eight. This is the eighth change. This is another broken promise in a series of broken promises. National said that there would be no major changes and that is because KiwiSaver has been a runaway success.Every member of this House will recognise that New Zealand’s savings rate over many generations has been poor. We have not been good savers. One of Michael Cullen’s many significant legacies to this country is that he took the initiative to turn that round and despite John Key’s standing up in Parliament in 2006 and saying that Michael Cullen was “dreaming deluded and in La-La Land” if he thought that a quarter of New Zealand would have KiwiSaver it has vastly exceeded expectations. It has vastly exceeded the doomsaying of John Key. That is why KiwiSaver has been successful.How unfair is it that if you were lucky enough to sign up to KiwiSaver on Wednesday you got the $1000 kick-start? Young families that I know of here in Wellington who have been really excited about signing their kids up just after they are born and getting them involved—if they were lucky enough to do that on Wednesday great but if it was Thursday then the kick-start was gone even though the legislation has not even passed yet. There were amendments put up by members on this side of the House to say to the National Party that it should at least give people a chance—how about extending it out for a year or even 6 months? That suggestion was turned down. It was turned down because fundamentally this $1000 kick-start has been wildly successful at encouraging people to join the scheme.It is the people who need the kick-start the most—those on low incomes—who will be the most affected by this. The truth is that the choice to become a saver is a difficult one when you are on a low income. We know that saving has got a huge long-term benefit for people. We know that it has got a huge long-term benefit for people but it is a big challenge when you are on a low income. So the $1000 kick-start is the thing that makes the difference. Actually someone told John Key this the day after the Budget. A young woman at a teen parent unit—I saw it on the television—said after she had met John Key that she wanted to get into that scheme but that she just did not have the money to do it and the $1000 has been taken away. That is exactly the person out of whose pocket the National Government is today ripping $1000.The other people are the younger generation. I think it is exciting that when young babies are born their parents say: “Let’s start the nest egg today.” That is great. That is called building a savings habit. Cameron Bagrie the chief economist at the ANZ does not often agree with the Labour Party but today he has come out and said that the reason why we have got the incentive is to actually start the habit of saving. The problem is that if you get to 18 or 20 and you have not got that account set up with that $1000 then there will be much less of a chance that you will carry on with it. National members can reflect on as they sit over there the fact that those are the two groups that they are taking the opportunity away from today. They are taking $1000 away from those low-income earners and those younger people. We have had a lot of preaching from that side of the House since their late conversion to wanting to do something about child poverty. Well here is something you could do: actually give people on low incomes the chance to get that $1000 and to get that savings habit under way. This bill undermines one of the great retirement savings initiatives of New Zealand and the National Government should be ashamed of it.DAVID BENNETT (National—Hamilton East):It is outrageous that that member Grant Robertson gets up and says these things when his leader wants to kick people in the guts when it comes to their superannuation. He does not want to give New Zealanders the ability to retire in dignity; he wants to take away their hard-earned retirement savings by taking away their ability to get universal superannuation in New Zealand.That member said that giving $1000 to anyone who signs up to a bank account gives them dignity in retirement. The previous speaker who will speak again said his reason for having the $1000 is to make them feel good. That is the economic rationale behind the Labour Party: to give $1000 to everybody who signs up to an account.The Inland Revenue Department has just put out a report on KiwiSaver. This report says that 38 percent of people who have signed up have never contributed since. Nanaia Mahuta says that is only the young people who have signed up for it. That cannot be the case because two-thirds of the people who should be in KiwiSaver—low-income New Zealanders who should be saving for their retirement—are not in KiwiSaver. The people who are in KiwiSaver are the middle and high-income earners whom Labour wants to give a thousand bucks to in order to give them dignity in retirement and to make them feel good.That is the Labour Party of old that is the Labor Party of Australia and that is the Labour Party that fails and is not good for New Zealanders or for savings going forward. The members are quiet because they know that that is the reality of what is going on. Their petty politics—they come into this room and try to sell to the New Zealand public that Labour is some kind of glorious party that would give them a thousand bucks. Well every time you give a thousand bucks to every New Zealander who signs up to an account you take $500 million off our accounts. When you do that you put New Zealand further into debt. That is the thing that the Labour Party is advocating for.New Zealanders need sensible economic management. If we are going to spend money in these times we should spend it on the people who need it for the first time in 43 years; we do not go out giving handouts to people who are the middle and higher income earners just to make them feel good and to give them dignity in their retirement.Dr DAVID CLARK (Labour—Dunedin North):Well that member who just took his seat David Bennett was in a lather but he has overlooked a large number of relevant points. He really really has misunderstood this bill. I guess that is what we have come to expect from him.Kris Faafoi: He hasn’t read it.Dr DAVID CLARK: He may not have read it. He certainly has not read on any behavioural economics as he just admitted then in his speech. What that member is going to have to face when he goes back to his electorate office are questions from hard-working New Zealanders who are trying to get ahead. The effect of this bill is that over 1700 people per year—over 1700 people per year—in his electorate of Hamilton East will miss out on that $1000 kick-start contribution. I expect a whole lot—Hon Nanaia Mahuta: How many?Dr DAVID CLARK: Over 1700 per year will miss out on the kick-start contribution in his electorate. I expect a few of them will come and ask him some hard questions. They will say: “Mr Bennett how come you and your National MP colleagues have taken this $1000 and then stopped it for everybody else after you?”. That is what the people in Hamilton will be saying.They will be saying that around the country. They will be saying it in Clutha-Southland. If they can track Todd Barclay down they will be saying: “Todd Barclay how come you took that $1000 kick-starter payment and now you’re shutting it off for 1700 people from our electorate every year for ever more?”. That is what they will be asking. They will be asking Mark Mitchell in Rodney: “How come you Mark Mitchell took away that $1000 payment for ever more even though you took it for yourself?”. In Rodney 1700 people per year will miss out and it will be no different in any other electorate. It will add up to 7000 people in every electorate in this country over the next 4 years who will miss out on this payment because of this Government’s refusal to tackle the long-term savings problem of New Zealand.The Government is all about getting to some kind of sham surplus today because it has mismanaged the economy so badly—so badly. There is a $1 million—sorry I wish it was $1 million! There is a $1 billion black hole that has opened up between the last Budget and this Budget. That is the mismanagement of this Government. It is short on vision and has failed to achieve its central election campaign promise.What was the Government’s central election campaign promise? Well do we need any reminding? The Government members said they would bring the books back into surplus this year. They have failed again. For the seventh Budget in a row the National Government has failed to achieve a surplus despite making that its central campaign promise. This is a Government that is failing on its promises and losing the trust of New Zealanders.New Zealanders were being promised a wage rise as well. The Government said that their wages would go up by $7000 over time. In the Budget we heard Bill English kick that can down the road for another 3 years. There is always jam for tomorrow—another broken promise. It reminds us of the promise not to increase GST. John Key said they would not increase GST. After that election he put it up to 15 percent. New Zealanders are counting the broken promises from this Government.Here is another broken promise: we will increase exports to 40 percent of GDP. Well they are down below 30 percent now and dropping and projected to drop further next year. The Government members are not getting this economy back on the right foot. They are mismanaging the economy and they are taking from the pockets of children—taking from the pockets of children—to pay for their economic mistakes today. They are robbing the future of the children to pay for their economic mistakes today. This is a Government that is out of ideas. It is out of touch. Those members might as well resign actually and give us an election sooner because they have no new ideas. They are failing to deliver on their promises. This measure is reducing savings at a time when we actually need an increase in savings. This is a time when we need long-term thinking not the “short-termism” that this Government is putting forward.The Government has failed to support the regions. It has failed to diversify the economy. It has failed to address the Auckland housing bubble. It has failed to develop the skills of New Zealand workers. And it is failing our economy more and more over time. This is a Government out of ideas and this is its big idea in this Budget: a new tax. Let us not forget that National campaigned on no new taxes and we have got three in this Budget alone. This is a Government that is so so out of touch that it thinks it can break those promises and arrogantly carry on and then pass this legislation under urgency not allowing New Zealanders to have a say on it.We heard the Financial Services Council come out today and say that this bill is like robbing the kids’ piggy bank to go down to the pub for a beer—robbing the kids’ piggy bank to go down to the pub for a beer. That is the kind of vision we have from this Government. Why will it not stand up and be counted? New Zealand is suffering as a consequence. This Budget is the seventh deficit in a row after nine surpluses from the Labour Government. This is economic mismanagement like we have never seen before. Those members should hang their heads in shame and they are and rightly so.CHRIS BISHOP (National):During the course of the debate over the last couple of days some very very silly things have been said by Labour members and members opposite. We had Andrew Little’s comment about how he cannot commit to keeping New Zealand superannuation universal. We have had Grant Robertson’s commitment to bring back the $1000 kick-start. But the one that takes the cake is the comment made by the member who just spoke which was that the Government should resign and we should have an early election. Really? I mean come on!After the worst Budget debate speech probably since Parliament started sitting in New Zealand ladies and gentlemen—after the worst Budget debate speech and a party in total disarray with David Cunliffe David Parker and Grant Robertson doing the numbers—do these guys opposite really want an early election? And after a Budget that raises benefit levels for the working poor and the poor in our society for the first time in 43 years—do these guys really want an early election? I do not think so. So that is going to take the cake in terms of silly things said by members opposite.It has been a very strange debate in the Parliament because what you have in the course of the debate on this KiwiSaver Budget Measures Bill is the Labour Party arguing for a form of middle-class welfare and arguing against a Budget that helps the most vulnerable in our society. It is some sort of weird parallel universe and what does it say about their priorities? What does it say about the sense of priority of the Labour members opposite when they are willing to defend something that is sure nice to have but not necessary? And they argue against a Budget that delivers support and help for those who most need it. It is a very good Budget which I and members on this side of the House are proud to support. It is a strange day in Parliament.Mr Clark keeps asserting that this Government is mismanaging the economy. Well actually something interesting happened in the month of April 2015. April 2015 marks the first month since April 1991 that more people have moved from Australia to New Zealand than the other way. So there are a hundred people a net gain in migrants who have come from Australia to New Zealand. And why is that? Members opposite will say the Australian economy is not doing so well; that is true relative to us. But it also highlights the importance of having a strong and fast-growing economy and that is what we have. So nothing could be further from the truth.This bill is another bill put forward by the Government in order to continue to strengthen the New Zealand economy and as part of a suite of measures as part of the Budget to continue the New Zealand economy growing strongly. I commend the bill to the House.JAMES SHAW (Green):I rise on behalf of the Green Party on this third reading of the KiwiSaver Budget Measures Bill. I am an Opposition member of Parliament but I do not like being oppositional for the sake of it. I do not believe in tribalism. But as a member of the Opposition I do believe that my role is to challenge the Government and to hold it to account. So during the course of this debate—I have actually tried to treat this as an actual debate where we actually try to find out what the Government is thinking—I have asked a number of questions in I think a fairly reasonable tone and I think that they are fairly reasonable questions. I do want to acknowledge that some of those questions have been responded to.I would like to start by just responding to some of those questions. One of the questions that I asked was why would you cut the kick-start for KiwiSaver now rather than cut the member tax credit or reduce the member tax credit when that would both save more money and keep in place the incentive that most people actually recognise. Nick Smith did respond to that. He said that we are doing it now because we want to incentivise people not just for opening an account but for actual savings which is a pretty reasonable response. I understand that. But if people are responding to opening an account because of the $1000 kick-start then what you can predict is that fewer people are actually going to be opening an account in the future. What we know is that there are a lot of people—aspirational people—who are not earning a great deal now but who hope to earn more in the future who have opened accounts because of the kick-start programme. The accounts may be dormant at the moment but these are people who want to earn more in the future and can see a pathway so that when they do they will have at least a little bit put away to start with.The second question that I asked was whether the Government considered leaving the kick-start in place for a period of time—say 6 12 or 18 months—to enable people who are not currently enrolled to have the opportunity to enrol or to enable people who are partially through the process of enrolling to have a chance to actually complete their enrolment. Again Minister Smith said we did not want a rush to take advantage of the programme. If we did not want people to take advantage of the programme we would not have set it up in the first place. That is the whole point of the incentive scheme—to get people to take advantage of the programme. So to me that argument holds no weight.Related to that why cut the KiwiSaver now but delay the rest of the Budget hardship package? In other words why take this away now and give people that gap where they are screwed from both ends? Somebody referred to this as middle-class welfare. But can I just say that that question was not answered by any speaker from the Government side at any point during this debate. That leads me to the other five questions that remain unanswered. As I said I think I have tried to ask pretty reasonable questions in the spirit of holding the Government to account and at the very least finding out what it is thinking. During the course of the debate no one—no one—has even attempted to try to respond to these questions so I will ask them again.New Zealand is 22nd out of 24 OECD countries for savings. Cutting the KiwiSaver incentive reduces the savings rate. What is the Government’s plan to increase savings? There is no plan. There does not seem to be a plan. We have not heard one yet. My next question is that the ANZ chief economist says that removing the KiwiSaver incentive will reduce the rate of take-up. What is the plan to maintain or increase the rate of take-up in KiwiSaver? I have not heard an answer to that question. There is no plan. Next question: how does reducing the KiwiSaver take-up rate impact intergenerational equity issues relating to today’s working parents essentially paying for three generations’ worth of costs? How does it deal with the change in the dependency ratio from 7:1 today to 2:1 in 30 years’ time? No one has responded to that question. Next question: the Government is reducing the short-term deficit by raiding New Zealand’s retirement scheme again. What is the plan for long-term—long-term—financial sustainability? Nobody has responded to that question.I know that it is a Saturday and we are under urgency and not all that many people watch Parliament TV. There have been a few people in the gallery—thank you for coming and watching. But it seems extraordinary to me that we could pass a piece of legislation of this much importance to this many New Zealanders about the long-term financial viability of the country and its residents and receive no answers to any of those questions. The Government is being completely unaccountable in passing this legislation. It is lazy to not be responding to these questions. It is arrogant to be relying on your numbers rather than attempting to respond to these questions. Like I said before I think that these are reasonable questions I have tried to ask them in a reasonable way and I think I have asked most of them about four or five times just in case anybody wanted to actually respond to them.There are only a couple of pieces of evidence—of actual evidence—that we have seen in the House today in relation to the bill. One is the regulatory impact statement. But in the regulatory impact statement it says in three or four different places that they did not consider any of the impacts of this legislation beyond the financial impact on the Government’s books. In other words we have no idea what this is going to do to New Zealand’s savings to the New Zealand population or anything other than the impact on the Government’s books. We have no idea what the impact is. The other piece of information that we have got is a 2011 report from Inland Revenue which said that to remove the incentive would gut the programme. So we have seen no positive arguments other than to get the Government’s books back into black—an admirable objective and I am fine with that notion but other than that we have seen no evidence relating to anything else in terms of the impact of this scheme. The only evidence we have seen is that it will have a negative impact. For all those reasons the Green Party cannot support this legislation. Thank you.FLETCHER TABUTEAU (NZ First):As a new member this term I cannot believe the audacity of this Government and its members. I just do not know what is left for this Government to do to meaningfully address our growing trade deficit for example. It is a Government of members who stand in front of the people of this country and tell us how important growing our export businesses are but then it will not stand up in front of the people of this country and tell them that real export figures are going backwards.I just do not know what is left for this Government to do that is meaningful to address the Government’s own growing debt. It is spiralling out of control. The Government tells us it is fiscally responsible and it has admonished this side of the House for being apparently irresponsible itself. But in its own books—its own books which it obviously does not open very often—its debt continues to spiral out of control. Those members dare not stand there and tell New Zealanders that our debt is $19000 or nearly $20000 per person—they cannot stand there and tell us that that is fiscally sound. Even in the time of Muldoon’s Think Big projects the per-person debt was half of that. These masters of fiscal management have overseen a growth in debt from next to nothing to $80 billion. They should not accuse this side of the House of distorting the truth. Someone is going to have to deal with this unsustainable debt and it will not be that Government.Business commentators have already described this Budget as piecemeal and reactive. If there is a plan behind this Budget if there is foresight and meaningful consideration given to the future of this country then the Prime Minister and his team have hidden that vision so incredibly well. Commentators went on to say that this Budget will do nothing to unite the business sector—that is the National Government’s Budget has nothing to unite the business sector.Regarding the KiwiSaver legislation itself the National Government has just shown us how callous it is. The logic that it uses is that the $1000 contribution is too costly an incentive. It is ignoring the tax that it took off its rich mates some time ago. It is ignoring the money that it may have saved from its welfare cuts in the 1990s.New Zealand First asked as a formal process in this House for the Government to hold off—do not pass this bill; do not make it a retrospective piece of legislation. If the $1000 contribution has no effect which is the argument behind this bill then why the urgency? Why not give our children a chance? Even the meanest estimate from the Government in the last couple of days during which it has tried to convince New Zealanders that they will be giving only that up is $25000 per person at retirement. A more reasonable estimate—and I speak to the Minister who questioned my numbers; I did adjust for tax and I did use reasonable numbers—is that the lost income for our retirees is between $117000 and $145000 per person at retirement based solely on the $1000 contribution alone. That is just an unbelievable loss to our future generations.With at least 500000 New Zealanders—but many would argue it could be 1 million New Zealanders—still to sign up the multiplication is basic. I will leave it for the backbench members over there to do the maths themselves but New Zealand First asked this Government to consider halving the kick-start contribution to $500 dollars. The $500 seemed like a compromise. The savings even at $1000 are so minuscule as to be redundant—they truly are. But $500 we asked for. Let us be reasonable. Do not take it away so that many of our children now are missing out because of the miserly and ill-conceived processes of this Government.The debate has been far-reaching and I think quite in-depth and we have spoken about the fairness. From one morning to one afternoon we now have a disparity in entitlement between a child who applied in the morning of the day of the Budget and a child who applied in the evening. It just does not make sense. There was no warning. There is no fairness. It is simply a retrospective piece of legislation and I think we all know—I think we have all seen—that that retrospective legislation is bad basically. It often does more harm than the good that we think it will do.I did not speak about it myself but I will take this opportunity now to speak of certainty—certainty for New Zealanders in their savings. That is a key element of any successful savings fund. The New Zealanders who wish to use it must have certainty but to cut away at it eight times continually over the years—whether you like it or not certainty is so important in order for New Zealanders to have faith in a savings scheme that they can believe in that they can use and that will supplement their retirement income into the future. This Government has taken that certainty away in so many ways with this Budget with this bill being just another example of that.I ask this Government not to be so miserly—let us not take it all away; let us give New Zealanders some time—but no. I do not think that at any stage in this debate there was any real engagement. Certainly no one was listening as no one on that side of the House seems to be listening now. It is a presumed outcome. Those members are being lazy they are not engaging and they are using their majority to simply pass poor legislation through under urgency with no engagement and no discussion with the people of New Zealand.No one on that side of the House has listened to logic. No one has listened to reasonable requests based on compassion. New Zealand First cannot support this bill.BRETT HUDSON (National):It is an absolute pleasure to rise in support of this bill in its third reading. A speaker on our side remarked earlier on today that it was almost like a parallel universe. What we see with this magnificent Budget introduced by this National-led Government is that this National-led Government is supporting those in most need with the first increases to real benefits in 43 years—43 years. In that time there have been two Labour administrations neither of which did the same thing. In terms of this this bill what Labour is doing instead is advocating for middle-class welfare. So we have National supporting those most in need by doing something real and Labour seeking to hand out money to people who by and large do not need it. That is a wonderful wonderful thing to see and I commend our leadership for its vision. I am fully supportive of this bill.I just wanted to respond to a couple of things that the Greens speaker Mr Shaw had to say. He basically said that the primary incentive for people to be in KiwiSaver is the $1000 the Government is giving. He basically said that people join KiwiSaver for that reason alone. That is not saving; it is simply Government expenditure. What we are doing is saying that instead of spending it that way we will reprioritise it to those who need it most. That is helping the people who are in the most need. That is making the best positive difference to New Zealand.Mr Shaw asked what was going to incentivise saving. Well that is easy. It is called growing the economy and creating more jobs and higher paying jobs and what we have been seeing over the term of this Government is average wages rising faster than inflation. So if you want to help people to save Mr Shaw get in behind our Business Growth Agenda. That way you will do something that is positive and will work. I commend this bill to the House.JAN LOGIE (Green):Just to respond to the point about growing the economy and that being the way to increase savings I would like to draw the member Brett Hudson’s attention to this little graph from the Parliamentary Library. [Interruption] Oh facts! We have facts in the debate—goodness! It shows that in the 1980s household savings were just around $700 per household in New Zealand. Then after this Government’s reforms in the 1990s they went down to a point of almost negative $1500 I think while you were so busy in your paradigm growing the economy.Then we just managed to get above zero again after the introduction of KiwiSaver. Although I have some issues with some of the impact of KiwiSaver on inequality the fact that it has improved average household savings is irrefutable. We have evidence from the Inland Revenue Department that tells us that the highly successful recognition for KiwiSaver is the $1000 kick-start payment—92 percent recognition. It is the most successful part of the programme.The projected increase in KiwiSaver membership is approximately 300000 over the next 4 years. There would be fiscal savings to be made from cutting that kick-start; however quoting the Inland Revenue Department from its 2011 regulatory impact statement: “this could damage KiwiSaver’s attractiveness to new members. There is a strong psychological boost attached with such an early initial increase in a member’s funds and on balance the potential damage to public perception and to the initial attractiveness of KiwiSaver outweighs the diminishing value of fiscal savings made by reducing or removing the iconic kick-start payment.” That is the advice. But of course we do not have the advice being presented. And the members on that side of the House do not have the advice because the regulatory impact statement did not ask those questions. The officials were not given the opportunity to provide that advice to the Government because this legislation happened at the last minute to try to get closer to that ever-elusive surplus.The only questions that were actually asked and the only advice given to this House on the impacts of this bill were on what it would do to the Government’s bottom line because actually it just cares about the public relations exercise. That is what this is about. This is not about the current account deficit. This is not about the distribution of wealth in this country. This is not even about people’s savings or anything to do with our society and the well-being of people. This is a public relations exercise.I want to remind the members on that side of the House that if an economy is not working for everyone it is not working. What you are putting at risk is something that has helped get our households back—some of them at least—into savings. This country has a massive issue with income inequality. You say that you care about that and that is why you are increasing benefit rates and that is well well overdue. But this country also has a very significant problem with wealth inequality. The top 1 percent in this country own 51.8 percent of the net wealth—that is as of the last time we had those figures. The bottom 20 percent have zero or little wealth and many of them are in debt.That is partially why this $1000 contribution is so critically important. It is not peripheral. This is not about the middle class because that $1000 contribution was the one thing that everyone could get even if they were on a low income and unable to contribute from out of their wages to the scheme because they wanted to ensure that their children could eat. I understand that you want to feed your kids before you put money in the savings for your retirement. I totally understand that. That is what this $1000 represents. This legislation is the ripping away of that. That is not about a redistribution of wealth or consideration for the well-being of our society as was suggested from that side of the House. It is the exact opposite. I really do take objection to the way that this has just been pushed through under urgency.The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I apologise to the member. I omitted to give her a warning bell but her time has expired.Hon RUTH DYSON (Labour—Port Hills):It is a very sad day for Parliament to be passing legislation that puts us back in terms of changing the social and financial security of older New Zealanders in the future—people who are just children or young people now. It has been a really bad day for the Government actually. It started off particularly badly when Todd McClay when reading his speech notes for the second reading said that he was speaking on behalf of the Minister of Finance. This legislation is so rushed that the Hon Todd McClay did not even know it was in his name. I think that is a first for this Parliament. It kept going downhill after that. The Hon Gerry Brownlee suddenly had a rush of blood to the head and he told David Bennett that he had had a rush of blood to the head and was going to take the next call. David Bennett had a rush of blood to his face. The tension was extraordinary as Gerry Brownlee took David Bennett’s call. They could have been advised to take some of his other calls later in the debate. I think it would have helped the National Party’s credibility.In 2008 John Key made a very serious and consistent promise to the New Zealand public and that was that there would not be significant changes to the KiwiSaver scheme despite National voting against it when it was originally introduced in 2006. That broken promise is now matched by the other broken promises about no new taxes or delivering a surplus. I do not know how new National Party members feel about going out—I am sure they had every honest intention—when it turns out that they have lied to people. How do they justify that? How do they say: “That’s OK. I will just go back to my electorate and forget what I said.”? People remember. I think that members of Parliament should have a conscience about what they committed to. If there is some genuine reason for them not being able to deliver a promise or heaven forbid breaking it they must have the courage of their convictions to go back to their constituency or to the people around where they live if they are a list MP and explain that to them.I do not think that one National backbencher will do that. They are just voting fodder. They are just being used as voting fodder. None of them seems to have had the courage to question or stand up to the people who made the decision. My understanding is that a very small number of Cabinet members made these decisions around this legislation and that is a very bad place for us to be.I just want to conclude by saying that helping the most vulnerable people in our society is a good thing but it does not ever need to be and it should not ever be at the cost of young savers just a couple of rungs up the ladder. That is what this KiwiSaver legislation does and that is why I am very proud to have my name on the Noes side and to be voting against this bill.ANDREW BAYLY (National—Hunua):I have listened diligently and studiously to all the arguments from the Opposition and the reality if you go back to first principles is that this is a piece of legislation that is really about helping families in need. This is about delivering $790 million of assistance to the people who really need it in New Zealand. That is why I believe that this bill is an appropriate thing to do. I commend the bill to the House.CHRIS HIPKINS (Labour—Rimutaka):I want to make one final contribution in this debate and one point in my final remarks on that. That is to the members opposite who have talked about the need to target assistance to those most in need. The point that I will make to them is this: the people most likely to be in KiwiSaver now are the people who are on middle and higher incomes. They are the ones who are most likely to have already benefited from the $1000 kick-start. The people who are now most likely to miss out on the $1000 kick-start are those on lower incomes who have not already signed in. A child from a middle-class family who has been signed up is going to get a better deal than someone who is on a minimum wage now and wants to sign up tomorrow. That is wrong. That is the unfairness.ALASTAIR SCOTT (National—Wairarapa):The point that Mr Hipkins makes is absolutely right. The beneficiaries or the winners of this current policy are the middle and upper-class high-income earners. The people we really want to help are those beneficiaries who are not participating in this scheme. That is why given a choice we prefer to dedicate a $790 million package $25 a week for each family with children on a benefit rather than just an opportunity to take $1000 from the taxpayer to put in their bank account to accumulate over a number of years without any contribution of savings at all. That is the choice.I am pleased to stand and support this bill because it demonstrates that we on this side are fiscally responsible whereas on the other side they have given no alternative. All other things being equal where are they going to find that $500 million that we have found? There are only two choices. They either borrow it or they tax. That is what they would have to do. They would have to borrow that $500 million or they would have to increase the taxes of middle New Zealand and that is why I do not support their proposal. That is why I commend this bill to the House.A party votewas called for on the questionThat the KiwiSaver Budget Measures Bill be now read a third time.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 56New Zealand Labour 32; Green Party 12; New Zealand First 12.Bill read a third time.RON MARK (NZ First):I raise a point of order Mr Speaker. I request under Standing Order 144 that a personal vote be held. Our reasons in New Zealand First for doing so are twofold: one this is the most controversial piece of legislation that is being passed under urgency in the House at this time; and secondly we continue to hear reports of MPs being seen off the premises who we believe should be here.JOANNE HAYES (Third Whip—National):No. All our members are on site. Thank you very much.Hon Members: How do we know?JOANNE HAYES: Because we have evidence of that. Thank you very much.Ron Mark: Mr Speaker—The ASSISTANT SPEAKER (Hon Trevor Mallard): Well I think we are in danger of getting outside a normal approach but I will hear from Ron Mark as long as it is relevant. I will warn the member that if there is a question of evidence of members whose votes he knows have been cast being off the premises the appropriate way of doing that is to raise it with the whip of the party. If there is a question of people’s votes being recorded incorrectly by a whip then the initial thing that the member should do is to raise that with the whip or the person who is casting the vote. It is just not appropriate to raise it with me.RON MARK (NZ First):I understand that. I would simply make a request in accordance with Standing Order 144 which states: “A personal vote may be held after a party vote if a member requests one …” and it goes on as you know “and the Speaker considers that the decision on the party vote is so close” and the rest is up to you. But it actually says that a personal vote may be held following a party vote if a member requests one. I am so requesting.The ASSISTANT SPEAKER (Hon Trevor Mallard): I have been around here long enough to remember this coming up and I may well have been involved in it myself. There is a ruling of Speaker Kidd which is 69/6 and it reads: “The fact that the House may on a party vote divide rather closely might well be a pattern on every vote throughout a session.” and I think that obviously there is a possibility of that applying at the moment. “It is clearly not intended by the Standing Orders that there should be a personal vote more often than not. Closeness on a party vote is not enough of itself for a personal vote unless there is something that might make a material difference. This might arise for example out of some elements of confusion.”I would just add to that that I have sat through the majority of the third reading on this bill. I have heard nothing from for example a minor party or any member that has indicated to me that a member’s intention was to vote in any way other than the way the votes have been cast by the whip. As I indicated to the member earlier if it is his understanding that members are not present who should be present that is something that should be taken up with the whips who are the persons responsible for that.CHRIS HIPKINS (Senior Whip—Labour):I raise a point of order Mr Speaker. I fully accept the ruling that you have made and that there will not be a personal vote on this. I wonder whether you might take up with the Speaker when he is available and with the other presiding officers a wider issue which is that the vote system that we have at the moment certainly relies on a degree of honesty. I keep very clear records the National Party keeps very clear records and I am sure all of the parties keep very clear records of who is in the building and who is not. I have also read the Speakers’ rulings and most of those relating to personal votes predate MMP when votes along party lines were not as common as they are now. In fact they are now the default and the other way personal votes are very rare. I wonder whether this may be something that presiding officers would now like to consider and come back to the House on—whether there are any circumstances under which the House may consider if you like an audit of whether in fact parties are voting with the numbers that they should.Although it is an honesty system and members are all trusted on it there does need to be now and then some check on that. As a whip I fully accept that from time to time the Government may wish to check that I am doing what I say I am doing and we may wish to do that. There is actually very limited provision it would appear under Speakers’ rulings and the Standing Orders for that to happen at the moment. That may be something that the Speaker and the other presiding officers or perhaps even the Standing Orders Committee may wish to consider given that now we are well into MMP and this is a new issue that has not really ever been tested.Hon GERRY BROWNLEE (Leader of the House):With all due respect to Mr Hipkins’ view we are 20 years into MMP. There has not been a case where a whip has been proven to have misled the House—Hon Annette King: We’ve never tested it.Hon GERRY BROWNLEE: Well I do not know what happens in the New Zealand First caucus; I have got no idea.The ASSISTANT SPEAKER (Hon Trevor Mallard): I just warn the Hon Annette King not to interject again.Hon GERRY BROWNLEE: What I can tell you is that Standing Order 144 is very specific about the role the Speaker has in determining whether or not there should be a personal vote and the points advanced by Mr Mark are not called on in the test that you have to apply.The ASSISTANT SPEAKER (Hon Trevor Mallard): James Shaw do you still want to make a comment?JAMES SHAW (Green):Yes Mr Speaker. You referred to Speaker Kidd’s earlier ruling about some element of confusion. If Mr Mark has been hearing stories that there are MPs off campus and the Government whip is saying that they are not then that to me seems like an element of confusion.The ASSISTANT SPEAKER (Hon Trevor Mallard): I do not think I need any more assistance. The rules in the House have been very clear. A whip’s assurances having been given are taken for people who are casting votes and that will continue to be the case. I will tell members that from my personal experience without naming the particular member I have myself on occasions gone down to a local tavern and hauled out someone who I knew did not have leave. People are very very careful when casting votes to make sure that they are properly cast.