Katene Rahui: Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill — First Reading 
Katene Rahui: Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill — First Reading 
[Volume:659;Page:8304] 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 A key aspect of this Taxation (Annual Rates Trans-Tasman Savings Portability KiwiSaver and Remedial Matters) Bill is that it completes another chapter in the story of trans-Tasman relations. The relationship between Australia and New Zealand is given another boost with this bill which gives effect to an agreement signed by the Minister of Finance and the Australian Treasurer on 16 July 2009. In the aftermath of the 2025 Taskforce report and a conservative monthly economic indicator report for November the bill gives another push to those who already believe that the grass is greener on the other side of the Ditch. The bill allows those with retirement savings in a KiwiSaver scheme and the Australian equivalent to consolidate them into one account in their country of residence exempt from entry or exit taxes. The bill also amends the rules for KiwiSaver for those in the scheme who permanently emigrate from New Zealand to Australia. 
But as Tapu Misa wrote so convincingly in yesterday’s  
New Zealand Herald 
 it is 
not the gap between New Zealand and Australia that we should target; it is the gap between rich and poor in New Zealand. Misa suggests that the gap between rich and poor in New Zealand is actually the gap we should be addressing; it is the gap that holds us back. Yet the 2025 Taskforce had the gall to suggest that in order to close the wage gap with Australia all we needed to do was to reduce the adult minimum wage to $9 an hour. Such a move would result in a wage cut for half a million low-paid workers of $140 a week. It is not as though we can comfortably accommodate such regressive policy; the Gini coefficient an internationally recognised measure of income inequality rose from 26 in 1981 to 31.7 in 2007. Zero in this scale represents perfect equality whereas 100 is absolute inequality. Set against other nations New Zealand when measured against the Gini index for inequality is ranked sixth worst for inequality. 
So with the levels of income equality being as marked as they are one can understand the enthusiasm that is being expressed for making a number of amendments to the Income Tax Act 2007 and other related legislation such as the Tax Administration Act 1994 and the KiwiSaver Act 2006. The thinking is that boosting the incomes of mid to high income earners through tax cuts and tax exemptions will create economic benefits that will trickle down to lower-income earners. We call this the trickle-down effect. Just like those infamous buckets in Cuba Mall the theory is that boosting the incomes of mid to high income earners will create more room for spending which will create more jobs which will bring about a greater demand for services and which will mean that those at the bottom will be supported to climb out of poverty into a better quality of life—except that what we have experienced in recent years in Aotearoa is more like a trickle-up effect which lands us back in the state of growing income inequalities. 
This bill aims to take a couple of immediate steps to address the inequalities of income for New Zealanders. One is the enrolment of under-18-year-olds into KiwiSaver. The bill will enable discretionary entry for those under 18 to be amended to allow those who are now under 16 to be enrolled by their legal guardians and to allow those aged 16 to 17 to co-sign with their legal guardians in order to enrol. In itself this is a good thing in that it creates an opening and an opportunity for young New Zealanders to respect the savings culture—to invest in their own financial well-being and future. Another related aspect of this is the new relationship between KiwiSaver and the first home purchase. Basically the rules excluding individuals with an interest or past interest in a leasehold estate such as having their name on a rental lease agreement are amended so that they are eligible for first-home withdrawal. 
We have been particularly interested in the opportunities for Maori to benefit from any initiatives that can address the lower levels of Maori homeownership. One of the greatest tragedies during the time of the previous Government was watching the decline in the homeownership rate amongst Maori with the proportion of Maori who own their homes falling from 61.4 percent in 1991 to 45.2 percent in 2006.  
Maori Housing Trends 2008 
 reported that Maori had been hit by the same challenges as other New Zealanders who have found that property prices and rents have got out of reach in recent years. So it has been really exciting that the Maori Party has been able to work alongside the Minister of Housing with a whole bunch of initiatives to help Maori first-home buyers such as streamlining the Resource Management Act and the Building Act to make building cheaper reducing taxes so that there is more take-home pay to service the mortgage and keeping interest rates under control through better Government spending at a time when interest rates might otherwise rise as the economy recovers. These are all important steps in our economic recovery but there are other initiatives in train including this one related to KiwiSaver. 
The Maori Party is also proud of the developments associated with the Housing Innovation Fund particularly in extending the scheme to make it available for new builds and for buying a first home on multiple-owned Maori land. The opportunity for first-home withdrawal is a positive amendment to the tax law that we hope will pave the way for more Maori to own their own homes. 
There are some other interesting amendments in the legislation. Cure Kids is added to the list of charitable donee organisations in schedule 32 of the Income Tax Act 2007. This enables donors to obtain a tax deduction on their donations to Cure Kids—previously known as the Child Health Research Foundation—which was established over 30 years ago to address the lack of research into life-threatening childhood illnesses in New Zealand. We are talking about illnesses like asthma childhood diabetes childhood heart problems liver diseases and spina bifida—all areas in which Maori and Pasifika children are disproportionately overrepresented. 
Then there are amendments to the gift duty exemptions. The bill exempts the following gifts from gift duty: gifts to local or central government bodies gifts to donee organisations and gifts of property made via a court order under the Law Reform (Testamentary Promises) Act 1949 or the Family Protection Act 1955 which will apply retrospectively from 24 May 1999. 
All of these measures are perfectly legitimate valid ways of making changes to the tax laws and as such they give us grounds to support this bill. But I cannot leave this debate without raising again the need to do better in addressing inequality. In  
The Spirit Level 
 which was produced this year by Richard Wilkinson and Kate Pickett the authors suggest that in highly unequal countries like New Zealand the cost is almost always high rates of social dysfunction. They draw upon more than 30 years of data to demonstrate that in an unequal society there are more people in prison; there is more violence; more people suffer from ill health mental illness or drug or alcohol addiction; there is more adult and childhood obesity; there are increased infant mortality homicides and teenage births; and educational outcomes and performance are lower. If anyone is under any illusion that this tax bill will address those issues of profound inequality I would caution against it. 
But that does not mean we should abdicate all responsibility for change. We must do something to address rising food prices and the impact that that has on the ability of those in low-income households to purchase healthy food by exempting this food from the goods and services tax. That is the substance of the next member’s bill that I will be submitting and I would appreciate members’ support for it. The other wider issue of course is the need to include broader economic measures such as unemployment and income levels with growth measured using a genuine progress index. 
The Maori Party will vote for this bill to go through to a select committee today and we look forward to the future discussions on it. Kia ora.