"\u003C!DOCTYPE html\u003E\u003Chtml xmlns:xlink=\u0022http://www.w3.org/1999/xlink\u0022 xmlns:xsi=\u0022http://www.w3.org/2007/XMLSchema-instance\u0022 xmlns:mml=\u0022http://www.w3.org/1998/Math/MathML\u0022\u003E\n  \u003Chead\u003E\n    \u003CMETA http-equiv=\u0022Content-Type\u0022 content=\u0022text/html; charset=utf-16\u0022\u003E\n    \u003Cmeta name=\u0022viewport\u0022 content=\u0022width=device-width, initial-scale=1\u0022\u003E\n  \u003C/head\u003E\n  \u003Cbody style=\u0022font-family:sans-serif; font-size:100%;\u0022\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000001\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u0022aa8fd508199746528a2b7ea3eaff86c5\u0022\u003EThursday, 17 May 2007\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000003\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022f989fcfcaac74e5d9e9c9e2f80958914\u0022\u003EThursday, 17 May 2007\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000002\u0022\u003EMadam Speaker took the Chair at 2 p.m.\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000004\u0022\u003EPrayers.\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022\u003EBills\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000005\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u002257cc9d750a9140268bfad80bb8afca0f\u0022\u003EAppropriation (2006/07 Supplementary Estimates) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000006\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u00220cdff20431f64ee69c113967dbbeaef7\u0022\u003EProcedure\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022 data-id=\u002226675ab973f74da596b258c721d1e7b0\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000007\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002226675ab973f74da596b258c721d1e7b0\u0022\u003EHon Dr MICHAEL CULLEN (Minister of Finance):\u003C/span\u003E I hereby present the Supplementary Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2007 (B.7). I move, That that paper be published.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000008\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMotion agreed to.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022\u003EBills\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000009\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00222eb91c7b1377456fadbe148a9d8704da\u0022\u003EAppropriations (2007/08 Estimates) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000010\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022795a13ee80e2432daa6d8242d84dc599\u0022\u003EFirst Reading\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022 data-id=\u00222eb1658b4259476aa874aa2c94ff7daf\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000011\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222eb1658b4259476aa874aa2c94ff7daf\u0022\u003EHon Dr MICHAEL CULLEN (Minister of Finance):\u003C/span\u003E I move, That the Appropriations (2007/08 Estimates) Bill be now read a first time. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000012\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EBill read a first time.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000013\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u002259e355c068d44589bbf35b992b31b8fd\u0022\u003EBudget Statement\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000014\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u002263c975b3144b4e989a6174cd78276889\u0022\u003EBudget Debate\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000016\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u002220ec59a024a3482ba3dfc533dbdf5dc3\u0022\u003EBudget Debate\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022 data-id=\u0022e675b481b99044cc8808f465d27e1654\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000015\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e675b481b99044cc8808f465d27e1654\u0022\u003EHon Dr MICHAEL CULLEN (Minister of Finance):\u003C/span\u003E I move, That the Appropriations (2007/08 Estimates) Bill be now read a second time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000017\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe central message of Budget 2007 is the importance of saving and investing. Budget 2007 is designed to promote a stronger saving culture and encourage greater investing.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000018\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThis will create a more productive economy, a deeper capital base, a more prosperous retirement future for New Zealanders, and ensure we can be less dependent on foreign capital.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000019\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIncreasing saving and investing will underpin the Government\u2019s three core themes of economic transformation, families young and old, and national identity.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000020\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIt will help build a sustainable future for New Zealand over the long term.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000021\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EHigher levels of investing and deeper and broader capital markets are important preconditions for improving productivity and enhancing economic transformation.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000022\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EHigher levels of saving will assist young families to accumulate the deposit for a first home and help to build assets to improve standards of living in retirement.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000023\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EGenerating more of our own saving and investing will lessen our current very high levels of dependence on foreign capital and enable us to be more economically independent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000024\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EBudget 2007\u2019s central message of saving and investing is given against the background of continued substantial imbalances in the economy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000025\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EAfter a brief period of economic slowdown in 2005/06 economic growth has begun to pick up again. But this growth is based on domestic demand. The New Zealand dollar, having briefly dropped to US60 cents in early 2006, quickly resumed appreciating to levels well above its equilibrium rate. This is placing significant stress on the exporting sector, though some parts, such as dairy, are substantially cushioned by high commodity prices.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000026\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EAt the same time, the high exchange rate means that import prices remain low. With high interest rates encouraging strong capital inflows, and appreciating property values and strong household spending underpinning high levels of household borrowing, domestic demand growth has remained very strong. Hence New Zealand\u2019s current account deficit of around nine per cent of GDP and continued inflation pressures.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000027\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMeanwhile, stronger economic growth than predicted last year, combined with strong investment performances by the Crown Financial Institutions and underspending against Budget, has led to a stronger fiscal outturn for 2006/07 than forecast in Budget 2006.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000028\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EAgainst a forecast cash deficit of $1.5 billion the forecast outturn for the current year, 2006/07, is now expected to be a surplus of $1.7 billion. This compares with a cash surplus in 2005/06 of $3 billion.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000029\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe operating surplus has moved much less, from a forecast of $5.8 billion to $6.3 billion or 3.8 per cent of GDP. The corresponding figures in 2005/06 were $11.5 billion or 7.3\u00A0per cent of GDP. While the operating surplus has fallen substantially the Government\u2019s fiscal management has continued to lean against demand pressures in the economy. But this level of surplus is still somewhat higher than necessary to be consistent with the Government\u2019s long term fiscal objectives.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000030\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EWhat is equally clear is that while some of the economic imbalances will slowly correct over time, there are more fundamental imbalances which are driving some of the short-term ones. This means that corrective action such as monetary policy has had to be more severe than is desirable.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000031\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIn particular, the low and declining rate of household saving in New Zealand is a major contributor to these trends. While there is room for argument about the accuracy of any particular measure of household saving, all the different measures show the same trend over the last twenty years or so \u2013 a movement into negative household saving which continues to decline.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000032\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMoreover, many of the traditional explanations of such a trend do not withstand close analysis. Once low saving was put down to high inflation \u2013 but New Zealand has had low inflation throughout the last fifteen years. Real personal and household incomes have been rising. Job security overall is much higher than it was fifteen years ago in the aftermath of the Employment Contracts Act. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000033\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ENew Zealand Superannuation levels, in relative terms, are lower than they were twenty years ago while the age of eligibility is now five years higher. And, while in fact the New\u00A0Zealand Superannuation Fund has given much greater certainty to the future of New\u00A0Zealand Superannuation, a clear majority of New Zealanders under the age of forty still tend to doubt whether it will be there to support them in retirement.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000034\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThus the favourite economists\u2019 (and others\u2019) nostrum of simultaneously cutting taxes and New Zealand Superannuation would have no effect on the saving rate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000035\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThere are, of course, a few who say New Zealand does not have a saving problem. These are the macroeconomic equivalent of climate change deniers. They only need to look at our very large current account deficit, one of the highest national debts in the world relative to national income, and growing public concerns about our inability to retain ownership and control of much of our own economy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000036\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThis Labour-led Government has already put in place the KiwiSaver scheme. This begins operation on 1 July. KiwiSaver is designed to use the power of inertia to encourage people to save. On taking up a new job people will be automatically enrolled. Pay deductions at the rate of four per cent of gross income will begin with the ability to opt for a higher level of eight per cent. People not wishing to stay in must opt out within eight weeks.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000037\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe Government will contribute an upfront payment of $1000 to kickstart each KiwiSaver account. KiwiSaver savings are locked in until age 65 subject to a small range of exceptions.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000038\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EWhile KiwiSaver in its current form is the most significant change in saving policy since the National Government abolished the Third Labour Government\u2019s compulsory saving scheme in 1976 it is clear that the needs of New Zealand and New Zealanders raise the question of whether more should be done.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000039\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe size of the fiscal surpluses allows room for further initiatives. There were two options facing me in recommending action to Cabinet. One was the tax threshold indexation changes outlined in 2005, or some other form of modest personal tax cuts, which for most people would increase take-home pay by a few dollars a week while adding to the demand pressures in the economy. The other was a series of bolder moves to strengthen KiwiSaver to build greater economic and social strength for the future.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000040\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIn my view the choice was not a difficult one. Every dollar saved today is worth more in the future. A small tax cut now would be spent and then gone. Increasing saving encourages more personal responsibility.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000041\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIf we help more people save now that will reduce the need for people to receive income-tested supplementary assistance from the government in the future. That is particularly true if more saving now enables young couples to save for a deposit on a first home and work towards a mortgage-free retirement.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000042\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EBut in designing assistance and encouragement for saving it is important to recognise that those on modest incomes have the most difficulty in saving and therefore need a stronger relative incentive to encourage saving. Traditional saving incentives tend to have the opposite effect.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000043\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThis Labour-led Government wants to see more people, not fewer, sharing in the wealth that we create.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000044\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMadam Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000045\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThree major initiatives are being announced today.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000046\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EFirst, the vast majority of full-time income earners will qualify for a tax credit of $20 a week for their KiwiSaver contributions.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000047\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThis will take the form of a dollar for dollar matching credit of up to $20 per week for individual contributions. Thus anyone earning $500 per week or more will automatically qualify for the full credit. The credit will be paid on an annual basis into a person\u2019s KiwiSaver account after the end of each tax year.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000048\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThis credit will come into force with the start of KiwiSaver on 1 July. Legislation to enact this will be introduced and passed under urgency later today.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000049\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe new tax credit will also be available to members of schemes that are subject to complying fund rules. Self-employed people in a KiwiSaver scheme will also qualify for the credit.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000050\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe second major new initiative is to provide that, from 1 April next year, where an employee opts to stay in KiwiSaver, or to join it and make contributions, a compulsory matching employer contribution will be phased in. This will start at one per cent of the employee\u2019s gross income in 2008/09 and will, over the next three years, be phased up to match the minimum employee contribution level of four per cent by 2011/12. Employers will not be required to match the higher contribution rate of eight per cent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000051\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThere is no doubt that employer contributions will create a greater sense of employee loyalty. The accumulation of savings funds in this way will also create greater incentives for workers to stay in New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000052\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe Government expects that the phase-in of the compulsory matching employer contributions will be taken into account in wage and salary bargaining as is the case in the current campaign by the Engineering, Printing, and Manufacturing Union.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000053\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIn order to ensure that contributions do reach the four plus four level, all options which allow an employer contribution to count towards the minimum KiwiSaver member contribution (such as the two plus two option) will be phased out from 1 April 2008.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000054\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe third major initiative, which will substantially reduce the cost to employers of the new compulsory contributions, will be that those employer contributions will qualify for a matching tax credit of up to $20 a week per employee.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000055\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EUnlike the employee tax credit this will not be paid into a KiwiSaver account but will be available directly to the employer to offset costs. The effect of this is that, at full operation, the first $500 a week of each employee\u2019s wage or salary will not incur a net cost in relation to the KiwiSaver employer contribution for that employee. In the first year, 2008/09, the employer\u2019s contribution costs on the first $2000 a week of employee income will be met, and in 2009/10 on the first $1000 a week. The net additional costs to employers by 2011/12 should overall be no more than around one per cent of the national wage and salary bill at that point.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000056\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe combined effect of the employee and employer tax credits is that the Government will be supporting saving on all those earning $500 a week or more by $40 a week, and fully matching the costs of KiwiSaver contributions on earnings of up to $500 a week.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000057\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThere are a range of subsidiary and consequential decisions which are being announced separately. Legislation to provide for the employer\u2019s contributions and tax credits will be introduced and referred to a select committee under urgency later today.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000058\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe impact of changes to KiwiSaver on a range of average New Zealanders will be dramatic. For a couple on the average household income, with one income earner entering KiwiSaver at age 30, their accumulated savings at age 65 in constant dollar terms are projected to be $380,000 under the revised KiwiSaver scheme compared with $170,000 under the initial provisions.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000059\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIf the same couple on the average household income each had the same income then accumulated savings at age 65 would be $440,000 on the revised KiwiSaver scheme compared with $170,000 under the initial provisions.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000060\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe social justice element in KiwiSaver becomes even clearer if we consider a two income couple, both on the same wage, where total income is just 60 per cent of the average household income. If they enter KiwiSaver at age 30, they are now projected to accumulate $300,000 between them compared with $100,000 under the initial provisions, three times as much.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000061\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EObviously the cost of the new KiwiSaver provisions will depend on the rate of take-up. On the assumption that there is a 50 per cent take up after ten years the annual cost of the additional expenditure will be $680 million in 2008/09 rising to $1.63 billion in 2016/17. This will take total KiwiSaver expenditure to $965 million in 2008/09 rising to $2.03 billion in 2016/17.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000062\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIf take up is faster \u2013 say 50 per cent after five years \u2013 the additional expenditure for the new elements will be $1.14 billion in 2008/09 rising to $1.57 billion in 2011/12. Total KiwiSaver expenditure would be $1.43 billion in 2008/09 rising to $1.94 billion in 2011/12.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000063\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EUnlike tax cuts in the pocket, the impact on demand will be very small and may well be negative. And while the increased availability of realistic first home deposits five years or so down the track may put a little extra pressure on the housing market the greater encouragement to non-housing saving and investing should more than counterbalance that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000064\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EOne issue that has come to the fore in recent years, which the enhancements to KiwiSaver highlight, is the growing pressure for large managed funds to be accountable for the way in which they invest.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000065\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EDisclosure requirements can be a low cost and efficient way of encouraging responsible investing. The United Kingdom has had such disclosure requirements in place since 2000. Australia has similar requirements.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000066\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EDisclosure requirements allow providers to market themselves as responsible investors but also ensure fund members are aware of the portfolio decisions made on their behalf.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000067\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe Government has agreed that KiwiSaver providers will be required to disclose their approach to responsible investing. It is also intended that a joint working party with scheme provider representatives will be set up to develop guidelines on responsible investing.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000068\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ETo recap. Once the revised KiwiSaver is fully implemented a person on the projected fulltime average wage in 2011 will need to save about $40 per week. That will result in $100 a week going into their KiwiSaver account, or about $5,200 a year. The net additional cost to the employer will be zero in the first two years rising to $20 per week by the fourth year. The Government expects this small additional cost to be taken into account in wage bargaining over the next four years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000069\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EKiwiSaver now presents the chance for a new beginning for New Zealand in terms of saving and investing. It is the individual\u2019s equivalent to the New Zealand Superannuation Fund \u2013 the opportunity for greater security in retirement.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000070\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EAt the same time it will significantly increase the flow of funds in New Zealand for investing both here and overseas. The effects of such funds can be seen in Australia. By some measures Australia is now the world\u2019s fourth largest offshore investor. We, on the other hand, are one of the world\u2019s largest borrowers relative to our size.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000071\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMadam Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000072\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe returns on saving and business investing will be increased as a result of the second main element of Budget 2007, the Business Tax Reform package.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000073\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThis package is the outcome of Labour\u2019s confidence and supply agreements with the United Future and New Zealand First parties. I particularly want to acknowledge the role of the Minister of Revenue, Hon Peter Dunne, in developing this package.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000074\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe most obvious and expensive, though not necessarily the most important, part of this package is the reduction in the headline rate of corporate tax from 33 per cent to 30\u00A0per\u00A0cent from 1 April 2008.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000075\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EBusiness has long argued that such a reduction will assist in boosting productivity and competitiveness and attracting more foreign direct investment increasing labour productivity and wage rates.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000076\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIt should also reduce the attractiveness of structuring businesses so as to report minimal profits within New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000077\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe cost of the reduction is expected to be $675 million in the first full year, 2008/09. Dividends are generally paid out in arrears so, to ensure that credits are not trapped in companies, the current 33 per cent imputation credit ratio will be available until 31 March 2010. This leads to a transitional cost of around $115 million in 2008/09 and $40 million in 2009/10. In Australia this concession was not allowed when the corporate tax rate was last reduced.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000078\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EAt the same time, the tax rate for widely held vehicles and the top tax rate for Portfolio Investment Entities will be reduced from 33 per cent to 30 per cent from 1 April 2008 at a cost of $50 million in the first full year. Certain closely held saving vehicles will continue to be taxed at 33 per cent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000079\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThese rate reductions will be legislated for later today.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000080\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EWhen the business tax discussion document was released proposals were also included for tax credits for research and development, export market development, and skills training. Following feedback from business and tax advisory groups it has been decided not to proceed with the latter two proposals.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000081\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EInstead, some $87.8 million of new funding over the next four years will be provided for the Market Development Assistance Scheme to encourage firms to take new products to market so as to boost exports and productivity. $53 million will be invested over four years to increase participation in industry training.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000082\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EAfter careful reflection, the Government has decided to proceed with a research and development tax credit. This credit will be at the rate of fifteen per cent of eligible expenditure.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000083\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ETo qualify, research and development activities must be systematic, investigative, and experimental. They must either seek to resolve scientific or technological uncertainty or involve an appreciable amount of novelty. They must be directed at acquiring new knowledge or creating new or improved products, processes or services.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000084\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ECertain activities are excluded, as they are in other jurisdictions, generally to delineate more clearly the boundary between innovation and routine activity.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000085\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EA business must control the research and development expenditure, bear the financial and technical risk, and own the results. The research and development must be carried out predominantly in New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000086\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EEligible expenditure will cover employee remuneration, depreciation of tangible assets used primarily in conducting research and development, overheads, consumables, and payments to entities conducting research and development on behalf of the business.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000087\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe tax credits will reduce tax payments and imputation credits will arise for tax paid by way of the research and development credit. Credits will be paid out in cash to loss-making businesses. Businesses will be able to claim the credit as part of their normal tax return process.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000088\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe fiscal cost is expected to rise from $140 million in 2008/09 to $260 million in 2010/11. This represents a massive investment by the Government in private sector research and development and will place us in a much more competitive position vis-\u00E0-vis Australia in particular.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000089\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMadam Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000090\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe review of the international business tax regime may be even more important than the corporate rate cut or the research and development tax credit in contributing to future economic growth, though it is likely to cost far less.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000091\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EOur current tax rules in relation to New Zealand companies investing in offshore activity impose additional costs that are not faced by businesses resident in other countries. This has created an incentive for New Zealand firms to migrate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000092\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ECurrently, New Zealand taxes New Zealand residents on their worldwide income. This includes any income that is earned by a foreign company that is controlled by New Zealand residents. This applies in all countries except the eight countries on the grey list.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000093\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe discussion document released in December last year signalled an intention to provide a tax exemption for active income earned by such a controlled foreign company. This is the international norm.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000094\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe Government has decided to introduce a package with the following features:\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000095\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Eintroduction of a tax exemption for active income\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000096\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Etax exemption for ordinary dividends from controlled foreign companies\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000097\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Ereplacement of the current grey list exemption relating to eight countries with a simple test treating controlled foreign companies with less than five per cent passive income as exempt, no matter where they do business\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000098\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Ea limited definition of passive income under the new rules\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000099\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Eintroduction of interest allocation rules for offshore investments and \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000100\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Erepeal of the conduit rules.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000101\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThis is a balanced package which is simpler, more consistently applied, and more internationally competitive than the current controlled foreign company rules. A number of base maintenance measures canvassed in the discussion document are not being pursued.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000102\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EA second round of consultation will be undertaken to work through detailed design and implementation issues. The final policy package will be conditional on the outcome of this consultative process.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000103\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe downside of this is that the time required for further consultation and then drafting and passage of the legislation will mean that it is very unlikely to be able to come into effect before 1 April 2009. However, the clear indication that reform will occur should be helpful in business decisionmaking around firm location.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000104\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMadam Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000105\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe total cost of this Business Tax Reform package is estimated to be $1.06 billion in 2008/09 rising to $1.13 billion in 2010/11. It is easily the most comprehensive business tax package since the mid-1980s and marks the first reduction in the corporate headline rate since 1988 under the Fourth Labour Government.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000106\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIn addition, other tax changes which are business friendly will be introduced today. The bill to be referred to a select committee will include changes to the compliance and penalties regime. Included in the bill to be passed through all stages will be remedial measures for Portfolio Investment Entities. These measures will address a number of technical issues with the Portfolio Investment Entity rules and ensure that prospective KiwiSaver funds can convert their systems on schedule.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000107\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ELater this year a Limited Partnerships Bill will be introduced which the Government hopes the House will be able to deal with expeditiously as it will assist significantly new technology and venture capital companies.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000108\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EFinally, the Government will release a discussion document exploring further potential measures for simplifying tax compliance, focussing in particular on small to medium sized businesses.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000109\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThere are two other major developments in relation to taxation which deserve discussion today.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000110\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EFirst, as a result of the confidence and supply agreement with United Future, a discussion document was released last year outlining options in relation to the taxation of charitable donations.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000111\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EAs a consequence of the submissions on the discussion document the Government has decided to remove the current rebate threshold on individuals\u2019 charitable donations. In future, all such donations to organisations with charitable donee status will qualify for the 33 per cent rebate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000112\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe deduction limit on charitable donations made by companies and M\u0101ori authorities will also be removed. The company deduction will also be extended to small unlisted companies.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000113\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIn November this year the Government will issue a further discussion document on proposals for a system of payroll charitable giving. This, if approved, would provide a mechanism for employees to donate to their charity of choice and receive a deduction immediately.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000114\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe second matter is of quite a different nature. Much concern has been expressed about overinvesting in housing and the impact of the tax system in encouraging this. While there is no political consensus on any major remedial measures I am mindful of the fact that under the current law investing in housing for the purpose of making a capital gain, that is trading in housing, is taxable.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000115\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIn order to underline the significance of this fact and to send a clear signal to housing investors about the purport of the current law it has been agreed between myself and the Commissioner of Inland Revenue that an additional $14.6 million over the next three years will be provided to Inland Revenue to strengthen the auditing of property transactions.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000116\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIn conjunction with KiwiSaver\u2019s encouragement of more diversified saving it is hoped that this will lead to some easing over time in the pressure on the housing market.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000117\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMadam Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000118\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EKiwiSaver and the business tax package are central to this Government\u2019s plans for economic transformation.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000119\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIn addition to the near-doubling of the Market Development Assistance Scheme $33\u00A0million will be spent over four years towards developing better export links with Asia. This includes increasing New Zealand Trade and Enterprise services in Asia, strategic tourism marketing in China, and planning for the 2010 Shanghai Expo.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000120\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EA critical component of the economic transformation agenda is to lift firms\u2019 innovative and absorptive capacity and improve research links between firms, Crown Research Institutes and Tertiary Education Institutions and align tertiary skills to the needs of business.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000121\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EBudget 2007 commits an additional $67 million over four years to support innovation and improve linkages. Major initiatives include:\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000122\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Elifting business performance through research and development to boost private sector R\u0026amp;D and research into innovative foods, beverages and other new products\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000123\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Ebuilding science capability through CRIs and the Marsden Fund\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000124\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Eimproving sustainability and primary sector productivity, and funding for Pastoral 21 and\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000125\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Eincreasing high value exports by developing a 3D digital graphics cluster through leveraging the expertise and networks of an industry leader.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000126\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIn Budget 2007, the Government\u2019s focus is on improving the quality and relevance of tertiary education with a package that will ensure the successful implementation of the tertiary reforms. This year\u2019s Budget package will enable the tertiary system to better fulfil New Zealand\u2019s needs, and at the same time provide better value for money for taxpayers and students. Major initiatives to be funded in this Budget include:\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000127\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E$129 million to strengthen universities\u0027 international competitiveness and support strategic change in the university sub-sector\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000128\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E$76 million in operating and capital funding to support the distinctive contributions of the Institutes of Technology and Polytechnics sub-sector\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000129\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E$35 million in capital funding to support strategic change in ITPs and wananga through the Quality Reinvestment Programme\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000130\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E$6 million to build the research capability of the wananga sub-sector\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000131\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E$69 million to provide for increased growth in participation in Industry Training as part of the Business Tax Reform package and sector leadership funding for Industry Training Organisations\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000132\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E$28.9 million in operating funding to increase student access to allowances and scholarships (which will be partially offset by a consequent reduction in demand for student loans) and\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000133\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E$14 million in additional funding for the Performance Based Research Fund to increase research activity and also increase the quality of research outputs in New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000134\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMadam Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000135\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EBudget 2007 demonstrates the Government\u0027s leadership on sustainability by spending $30.5 million operating and $1.6 million capital over four years on a range of measures to enhance sustainability in the government, business and household sectors. These include:\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000136\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Ebuilding sustainability into procurement by government agencies and improving eco-verification, to grow the market for sustainable goods and services\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000137\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Ea household sustainable living programme focussed on promoting the uptake of sustainable behaviour and actions in the home\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000138\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Eworking in partnership with business to enable firms to adopt more sustainable business practices and use them for competitive advantage\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000139\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Emoving the public sector towards carbon neutrality and\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000140\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Epartnering with local government to construct a network of public space recycling bins throughout New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000141\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EBudget 2007 commits $72.4 million towards energy efficiency initiatives.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000142\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe EnergyWise package of initiatives invests in programmes to support fitting of insulation and clean, energy efficient heating to houses, establishing a home energy rating scheme, and general promotion of energy efficiency. This represents an investment of nearly $34.4 million over four years, of which $15 million will be met from levy funding. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000143\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E$23 million over four years has been set aside for policy development and implementation of an interest-free loans scheme to support home energy efficiency measures, and $15\u00A0million over four years has been set aside for implementation of the home energy rating scheme after the policy is fully developed. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000144\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EBudget 2007 also commits significant spending on climate change over four years on:\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000145\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Eproviding international leadership and establishing international partnerships on agriculture and forestry research and\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000146\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Eresearch into the impact of climate change on New Zealand and techniques for mitigation and adaptation.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000147\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMadam Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000148\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThis Government has paid particular attention to the development of New Zealand\u2019s long-neglected land transport infrastructure, road, rail, and public transport.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000149\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EWhen this Government came into office only 42 per cent of fuel excise duty on petrol was retained in the National Land Transport Fund. Now the income flow is in the opposite direction. General taxation is now subsidising the restoration and extension of the rail network, the massive upgrading of the road system, and the largest increase in public transport expenditure in our history.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000150\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe Government is investigating full hypothecation of fuel excise duty. This would mean that all revenue collected from road users would be permanently dedicated to land transport, including public transport. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000151\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EYet still there is a demand for more. In particular, the Auckland Regional Council has identified the electrification of the rail system as its top transport priority. This is on top of the $600 million which the Government committed last year for the upgrading of the Auckland rail network. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000152\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EWellington has collectively expressed support for the building of Transmission Gully but has inadequate means for funding its share of the likely costs. Other regions have their own priorities which are not able to be funded within the current programme or which do not necessarily rank most highly on a nationally-based cost-benefit test.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000153\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe Government has given careful consideration to these issues. The Government favours further development of the public transport system and roading, especially where the latter will contribute to sustainable development and reduce congestion. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000154\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ESubject to Parliament agreeing to the necessary funding mechanism the Government has decided to proceed with the electrification of the Auckland urban rail system. In addition, the Auckland Regional Council will need to purchase new rolling stock.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000155\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIn the case of Wellington the Government\u2019s current responsibilities will be extended over the next four years by new funding for worn out infrastructure, extending double tracking to the Waikanae River, electrifying to Waikanae Station and enlarging the tunnels on the Johnsonville line. This is in addition to the announcement by the Greater Wellington Regional Council last week.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000156\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe Government is budgeting $600 million over six years for its contribution to this urban rail programme in Auckland and Wellington.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000157\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EAn additional $50 million will be spent on general track improvements to the national rail network over 2008 to 2010.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000158\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ENeither Auckland electrification nor such projects as Transmission Gully (beyond the investigation stage) are within the current programme or able to be funded out of it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000159\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe Government is therefore proposing a framework for the introduction of a limited regional fuel tax to enable local authorities and the Government to pay for transport projects sought by a region where those projects would not attract funding within the timeframe desired by the region.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000160\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIt is proposed that such a regional fuel tax, covering both petrol and diesel, would be at a maximum rate of ten cents a litre. Preference will be given to public transport and other land transport developments which will reduce congestion with no more than five cents a litre to be spent on roading projects.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000161\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe tax will be collected at the wholesale level. There will be a refund system for non-road purposes using the current petrol excise duty refund system.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000162\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe proceeds of the regional fuel tax will be reserved for specific capital assets and projects. As such it will be clear to consumers what the money is being used for. A maximum repayment period of 35 years for any single regional fuel tax proposal would apply.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000163\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIn the case of Auckland, in order to fund electrification the initial rate of regional fuel tax is estimated to be five cents a litre. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000164\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EElectrification is timetabled to be completed by 2013. An earlier date of 2011, to coincide with the Rugby World Cup, was considered. But it is clear that the risks of aiming for 2011 are too great, including the prospect of extensive disruption to other transport modes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000165\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThis project has the capacity to increase substantially public transport use in Auckland. It will need to be linked to integrated ticketing, increased bus patronage, and other developments to realise its full potential. But it provides the chance for Auckland to make up for decades of underinvesting in public transport if it chooses to grasp the opportunity.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000166\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMadam Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000167\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EApart from the Business Tax Reform package, the largest area of fiscal cost is in the Families Young and Old theme.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000168\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EConsistent with the confidence and supply agreement with New Zealand First the Government set the net married couple rate of New Zealand Superannuation at 66 per cent of the net average wage on 1 April 2007. Other rates were also adjusted accordingly, including those of Veterans\u2019 Pension, meaning older New Zealanders enjoyed a 5 per cent lift in their after-tax pension income. As part of this package, the income thresholds for abatement of both the Disability Allowance and the Community Services Card were increased to ensure no superannuitants or veterans would lose their eligibility to these entitlements. This represents new expenditure of $280.7 million over five years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000169\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe Government is spending $3 billion over four years in the health sector, including:\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000170\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E$1.9 billion to maintain service coverage by meeting cost pressures, demographic pressures and technological change\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000171\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Eexpanding the elective surgery initiative\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000172\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Eincreasing the focus on obesity through Healthy Eating-Healthy Action and Get Checked \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000173\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Efurthering the Cancer Control strategy \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000174\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Emodernising information technology infrastructure \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000175\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Eimproving services for people with disabilities and older people, including through addressing workforce issues arising from low-paid workers in DHBs and within aged residential and home based support settings\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000176\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Eaddressing emerging pressures on DHB pharmaceutical budgets and \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000177\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Eincluding the pneumococcal vaccine in the National Immunisation Schedule to protect the public from this disease.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000178\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EBudget 2007 ensures New Zealanders will have a safe and just society through increased funding to the justice sector, including:\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000179\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Ethe second tranche of extra frontline police officers and additional capacity in the justice sector for the initial flow-on effects \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000180\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Econstruction of permanent premises for the Supreme Court, including refurbishment of the historic Wellington High Court \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000181\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Efunding for the Human Rights Commission to ensure business continuity, and to improve service delivery \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000182\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Efunding to allow the Police Complaints Authority to investigate and review complaints against Police within agreed timeliness and quality standards and\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000183\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Eimplementation of the Coroners Act, including establishing the Office of the Chief Coroner, nine Coronial offices around the country with fourteen full-time Coroners and a new Coronial Services Unit in the Ministry of Justice. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000184\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe Government remains committed to the future of young New\u00A0Zealanders. Budget 2007 invests more than half a billion dollars in major initiatives including:\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000185\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Einflation adjustment for early childhood education centre general funding rates and for free ECE funding rates, and a funding increase to Kohanga Reo\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000186\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Ecapital funding for school property, including building new schools, new classrooms and new school gyms, modernising existing schools and development for kura and wharekura\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000187\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Eextra Year 1 teachers to bring the teacher to pupil ratio down to one to eighteen by the start of the second term in 2008\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000188\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Ea four per cent increase in school operational funding to target pressures identified in the review of operational funding, and other initiatives including relief teachers and schools sharing IT expertise and\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000189\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Efunding to maintain support for youth programmes such as Project K and AIMHI.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000190\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMadam Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000191\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe National Identity theme receives a major boost.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000192\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThis Government has consistently shown that we do not shirk our international duties. The centrepiece of the National Identity theme is raising annual Official Development Assistance by $246 million by 2010/11, reaching 0.35 per cent of Gross National Income. This increase was identified by the Minister of Foreign Affairs, Rt Hon Winston Peters, as a top priority and implements a Labour Party manifesto promise. It allows us to address urgent Pacific and Asian development needs. It is the largest increase in Overseas Aid in New Zealand\u2019s history and underlines our commitment to helping eliminate global poverty.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000193\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe Government is also strengthening the presence of New Zealand in the world through:\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000194\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EContinuing to meet our Defence commitments by allocating an additional $58 million per annum from 2007/08\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000195\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EFunding an increase in the Ministry of Foreign Affairs and Trade baselines of $105 million over four years to strengthen the Ministry\u0027s overseas networks and increase their capability to deal with our international priorities \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000196\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EContinuing the New Zealand Police\u0027s contribution to the Regional Assistance Mission to the Solomon Islands and the Solomon Islands Police Force and\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000197\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Eincreasing global science collaboration for Antarctic research as part of International Polar Year.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000198\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EBudget 2007 commits $8.2 million of operating and capital funding over four years to the National Library of New Zealand to support the Government\u2019s Digital Content Strategy. Other initiatives include:\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000199\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Eproviding expert information and advice relating to the creation, preservation and protection of New Zealand digital content and\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000200\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Eenhancing access through public library networks.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000201\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EBudget 2007 meets the Government\u2019s commitment to Vietnam Veterans and their families with a total of $16.5 million over the five year period 2006/07 to 2010/11. This funding is in relation to the provision of a welcome home ceremony, medallic recognition and other initiatives around the health and well being of veterans and their families.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000202\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EBudget 2007 commits $35.6 million to M\u0101ori and Treaty-related initiatives. The significant areas include:\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000203\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Eenhancing the M\u0101ori Television Service \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000204\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Emeeting the 2020 Waitangi Tribunal Settlement target \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000205\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Eincreased operational funding for Iwi M\u0101ori Radio and\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000206\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Emeeting Treaty settlement objectives and improved implementation of settlements involving cultural redress.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000207\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ECritical capability needs within National Identity agencies are being addressed through Budget 2007. These include:\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000208\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Ethe Department of Conservation \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000209\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Ethe Ministry for Culture and Heritage\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000210\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ERadio New Zealand\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000211\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EArchives New Zealand and\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000212\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003Ethe National Library.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000213\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIn addition, the Government is investing $8 million in New Zealand On Air to maintain services and develop appropriate programming for the emerging digital environment.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000214\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe Government is also providing $8 million to the Department of Conservation to prevent loss of biodiversity at nationally important freshwater sites through integrated management of pests.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000215\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMadam Speaker,\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000216\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EBudget 2007 has presented even more difficulties than last year\u2019s Budget in achieving an appropriate balance between the various competing worthy demands and needs which must be met.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000217\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMaintaining surpluses at the very high levels seen over the last three years is not feasible indefinitely. Moreover, Budget 2007 has had to accommodate the fiscal consequences of previous policies, such as Working for Families, the full impact of which first occurs in 2007/08, the well-signalled Business Tax Reform package, and other matters arising from confidence and supply agreements.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000218\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ESignificant further spending or revenue reductions in ways which would add to domestic demand, hence putting additional pressure on inflation and the exchange rate, would not be sustainable.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000219\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EI am satisfied, therefore, that the overall fiscal outturns forecast in Budget 2007 are consistent with the Government\u2019s long term fiscal objectives. Gross sovereign issued debt is forecast to fall to about 22 per cent of GDP by the end of the forecast period.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000220\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ENet core Crown assets, including the New Zealand Superannuation Fund, are forecast to rise to 10.3 per cent of GDP or just over $20 billion by 30 June 2011. This compares with net core Crown debt of 20.7 per cent of GDP when I became Minister of Finance.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000221\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EOperating surpluses averaging 3.1 per cent of GDP over the forecast period are sufficient to meet the Government\u2019s long-term fiscal targets. And we will move from a cash surplus position over the last few years to cash deficits averaging $1.4 billion a year.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000222\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EWhile these remain healthy numbers in comparison with international or New Zealand\u2019s historic standards it does indicate a somewhat more expansionary position than the very large surpluses we have seen recently. I would gently remind the House that the latter position has been the subject of considerable criticism inside this Chamber as well as outside.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000223\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMore importantly, four factors need to be borne in mind.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000224\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe first is that some of the increased spending and foregone revenue will not be spent in New Zealand, thus reducing any demand impacts. That is most obviously so in relation to the large increase in Official Development Assistance.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000225\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe second is that the corporate tax rate reduction should lead to increased investing for future growth and development.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000226\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe third is that the forecast cash deficits, in every year, are less than the transfers into the New Zealand Superannuation Fund. In other words, the overall fiscal stance remains firm.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000227\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe fourth, and most important, is that the Government has made a conscious decision to forego a substantial proportion of its own surplus in order to underpin the most significant initiative in private saving in New Zealand\u2019s history for over a generation.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000228\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThis initiative\u2019s design means it will have little or no domestic demand impact and so is supportive of monetary policy in the current economic environment.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000229\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ENo such initiative has been successfully introduced since the saving scheme begun by the Third Labour Government. That scheme was overturned, initially illegally, by an incoming National Government. It was a lost opportunity to lift our saving and investing record.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000230\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe KiwiSaver scheme is already in place and begins on 1 July. A recent survey shows a strong increase in awareness of the scheme and a higher than anticipated level of intention to participate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000231\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EToday the Government has announced major additions to KiwiSaver which will make it even more attractive.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000232\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ENew Zealand now has the opportunity to build a sustainable future of greater self-reliance, greater security and greater opportunity. KiwiSaver with these additions will greatly enhance our chances as a nation of following a sustainable path to social and economic development.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000233\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EIt will provide our young families with a greater chance of owning their own home. It will lift prosperity in retirement for millions of future retirees. It will support stronger and deeper investing in our own future, by ourselves for ourselves.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000234\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe chance to do this has been created by seven years of strong fiscal management. It is a chance Parliament and New Zealand should grasp with both hands.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000235\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EDebate interrupted.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000236\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00228d20c201ead64e419a904def60b4e779\u0022\u003EProcedure\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022 data-id=\u0022a22a49002780439092326faa6d2cf068\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000237\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a22a49002780439092326faa6d2cf068\u0022\u003EHon Dr MICHAEL CULLEN (Minister of Finance):\u003C/span\u003E I hereby present the Budget 2007 Speech, the Executive Summary, the Fiscal Strategy Report 2007, the Economic and Fiscal Update 2007 B2 and B3, the Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2008 (B.5), and the Departmental Statements of Intent. I move, That those papers be published.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000238\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMotion agreed to.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000239\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u0022ca4dca1b638a403eade091d10b267b64\u0022\u003EBudget Debate\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022\u003EBills\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000240\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00221175c14ad9794b79939915e5f7d918c0\u0022\u003EAppropriations (2007/08 Estimates) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000241\u0022\u003EDebate resumed on the .\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022 data-id=\u0022f4baaeca8af248fdaf23803ac3ccd8b6\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000242\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f4baaeca8af248fdaf23803ac3ccd8b6\u0022\u003EJOHN KEY (Leader of the Opposition):\u003C/span\u003E I move, That all the words after \u201CThat\u201D be omitted and the following words inserted\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000243\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220f8d7c56749746f98e0103ec42e7e4ad\u0022\u003EHon Trevor Mallard\u003C/span\u003E: Admitted!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000244\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225dfffca1aa3f46f994cc351906d30707\u0022\u003EJOHN KEY\u003C/span\u003E: \u2014omitted, Trevor; open your ears, mate\u2014\u201CThis House has no confidence in the Government led by Helen Clark because it has presided over a decline in New Zealand\u2019s competitiveness, and has failed after eight Budgets to deliver a meaningful reduction in taxes for New Zealand workers.\u201D They are the facts, actually, and we will get to those in a minute. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000245\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EThat was Michael Cullen\u2019s eighth Budget and his Budgets have not got any better. They have come in all shapes and sizes. We have had the lot. We have had the \u201Cchewing gum Budget\u201D. We have had the \u201CBondi Budget\u201D. Well, this afternoon we have had the \u201Cmoney-go-round Budget\u201D, which will almost certainly be a minority Budget, with the bulk of people in this House either voting against or abstaining on a Budget that makes no sense. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000246\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EWhat a cruel hoax it has been\u2014what a cruel hoax! We have had months and months of Labour Ministers going up and down the country parading to businesses that good news was on the way\u2014they were in for a $1 billion tax cut. Those were the words. The little thing Labour forgot to tell businesses was that after the KiwiSaver contributions, the Government is taking $2 billion off businesses. That is the truth of this Budget. Businesses have $1 billion given to them and they have $2 billion taken off them. We will go through the maths, if Michael Cullen cannot work it out, in just a moment. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000247\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EHow do they feel out there in the mortgage belt? The chewing gum in the \u201Cchewing gum Budget\u201D has gone. The mortgage belt is not even getting the chewing gum in the \u201Cchewing gum Budget\u201D. That has gone in this Budget, as well. And they do not get a personal tax cut; there is none of that in Budget 2007. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000248\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EThere is a special little treat for Aucklanders\u2014they get a tax increase. I look forward to Helen Clark parading around Auckland and telling Aucklanders why she has a $1.7 billion cash surplus and a $6.3 billion surplus, but there is not enough money to pay for rail electrification, so we have to have a tax increase. We look forward to that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000249\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EThe only thing that will be very interesting for workers when they go through this Budget is when they work out that not only will they not get a tax cut under Labour but they will not get a pay increase, either, because that is going into their KiwiSaver account. They will not get a tax cut, they will not get a pay increase, and they will not get a rise in their wages for years\u2014not for years will they get an increase.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000250\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E So where was the only place there was something positive on tax in this Budget? Well, interestingly enough, it was in relation to charities. Labour took National\u2019s policy on charities. The interest thing is that when I announced it, Steve Maharey said it was Tory charity. It was Tory charity when I announced it. When I announced it, Helen Clark said: \u201CTax cuts for the rich.\u201D Tax cuts for the rich is what Helen Clark said. And Michael Cullen went out and gave a speech in which he said: \u201CThe only thing that will work is the redemptive power of the State. It doesn\u2019t matter how well-meaning charity is; it won\u2019t work.\u201D It was not in the discussion document. National put it up, and when Labour is imploding in the polls it steals anything it can from this side of the House, because we are the only people making sense.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000251\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EThis is the point in the exercise where the backbenchers over there realise they are gone. What I want to do for them is to take them through the little bits that Michael Cullen did not take them through\u2014the little bits that Michael Cullen failed to tell them about when he was explaining it in Cabinet. You see, John Tamihere was right: change the odd word here or there, and make it\u2014[Interruption] Well, actually, I say to Trevor Mallard: \u201CYou could be gone, as well, son!\u201D. But we will come back to that member in a minute, because Aucklanders know all about his economic management. Helen Clark wants to put on a regional petrol tax, and he reckons he can afford a billion-dollar stadium, and now he cannot; now he has only $20 million. I say to him: \u201CYou\u2019re gone, Trevor. Goodbye! Bye, bye!\u201D.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000252\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003ELet us go back to the business of explaining what the backbenchers in Labour did not know. You see, we asked the Treasury officials in the lock-up how many people would take up this account. The answer, I say to Michael Cullen\u2014and he knows it\u2014is 50 percent of New Zealanders. Half of all workers will not take that scheme up, and I will tell members who those half are. They are those who cannot afford to, who do not earn enough. They do not earn enough and they will not take up this scheme. I will tell members what is worse: they are now being told not to ask for a pay rise, because some of their other mates, who earn a bit more and will put money into KiwiSaver, have to forgo their pay rise. The lower-paid workers of New Zealand have to give up their pay rise so that the higher-paid workers can get a cut through KiwiSaver. So they will not take it up.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000253\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EImagine those New Zealanders who are now sitting out there thinking they just want to earn enough to pay for a house. A whole generation of them want to pay for a house. Well, Michael Cullen has just told them that there are no tax cuts under Labour, no pay increases under Labour, and no chance for them to get their own money. That is what Michael Cullen has told them.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000254\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EAnd he is doing it in a money-go-round that is pretty interesting. You see, when he announced KiwiSaver with no bells and whistles on it\u2014[Interruption] Mr Burton should be a little bit careful, because everything of mine that his colleagues say things about, they adopt later on. So he should be careful about what he starts disagreeing with me on. I would just keep it to myself at the moment, if I were him.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000255\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EWhen Labour announced the KiwiSaver scheme with no bells and whistles on, the Inland Revenue Department hired 400 people. What is going to happen now? What is going to happen when it has this scheme? Hundreds and hundreds more will be employed by the State civil service. That is what will happen.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000256\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EI feel sorry for the poor old employer, because Michael Cullen could not do the maths. You see, this is the way it works. About 50 percent of the country will take up the scheme\u2014a million people. And when their subsidy is paid in, the employers will get back about $700 million through their company tax cut, and the $400 million or $500 million they get for the contribution. But the employers will be paying in, on the average wage, about a $2 billion contribution by the time they match it at 4 percent of the average wage. So companies get $1 billion back and pay $2 billion out. That is what happens. And that is happening at a time when companies are thinking of leaving New Zealand, at a time when they do not have the right amount of money.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000257\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022096e5f0b45ca416c9139bed8509d68c6\u0022\u003EHon Trevor Mallard\u003C/span\u003E: Wrong, wrong!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000258\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002238e966f36db440d1adf4ab73fa04136b\u0022\u003EJOHN KEY\u003C/span\u003E: Well, do the maths: $50,000, and $2,000 times a million people is $2 billion. Hello! They are the numbers! I think we can work them out\u2014OK? There we have it. New Zealand companies are leaving. They are leaving because they cannot cope at the moment.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000259\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EMichael Cullen does not actually trust New Zealanders to get ahead. You see, he does not believe in growth. He has no interest in growth. The only message under Labour is that people will save through the New Zealand Superannuation Fund, and now it will make people compulsorily save through KiwiSaver. People are already compulsorily saving through the New Zealand savings scheme. So the only future under Labour is that the economy will not grow. That is the only future under Labour. Well, there is a future out there that is a lot brighter.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000260\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EThe time has come for there to be a just a little bit of focus on the inconvenient truth about Labour\u2019s economic management. If Al Gore was here he would be making the commercial and the video right now, because the facts are pretty interesting. In 1999\u2014[Interruption] Well, let me remind the Prime Minister of what she said when she came in here in 1999. We were 20th out of 30 countries in the OECD. She, the Prime Minister of New Zealand, said: \u201CI\u2019ll take New Zealand up in the OECD.\u201D That is what she said. Well, I will tell the House what has happened: we have not gone up; we have gone down in the OECD. We are 22nd out of 30 countries. We do not compete with America. We do not compete with the UK. We do not compete with Australia or Canada. We compete with Portugal, Hungary, and the Czech Republic. Under Labour, that is our ambition. We are in a humiliating race to the bottom.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000261\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EWhat also has happened in the last 8 years has been quite interesting. You see, in the last 8 years wages in Australia, after tax, have gone up at twice the rate they have in New Zealand\u2014twice the rate. No wonder 700 Kiwis a week now leave for Australia! It is Export Year all right, but it should not be Export Year of our people. Our people should be earning more. Seven hundred of them a week leave for Australia. It is a disgrace. Tonight when New Zealanders are watching TV, they will be asking themselves a pretty interesting question: why does New Zealand, a country of 4 million people, have a million New Zealanders now living overseas? Why did one in four of them go to university? Why do one in two of them live in Australia? Why does Australia\u2014a country of 20 million people\u2014have only 800,000 of its people overseas? The answer is that in the last 8 years, for a start off, they have had some decent economic management in the form of Peter Costello, and, for 5 years in a row, Australian workers have got up the morning after Budget day and said: \u201CI\u2019ve got to keep a little more of what I earn.\u201D And that is fair.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000262\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EUnder Michael Cullen, this is the only message: the only time there could possibly be a tax cut would be election year 2008. It has got nothing to do with the inflation rate, nothing to do with the surplus, nothing to do with the cash balance, and nothing to do with whether he believes in it; it is because election year 2008 is the only time a New Zealander is allowed a tax cut, and we say that is totally and utterly wrong.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000263\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EMaybe when Helen Clark is in Auckland explaining to Aucklanders why they are paying more for their petrol despite her having a massive surplus, she can explain to them why\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000264\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ed324d47212c417d8bd822e17303bb05\u0022\u003EHon Trevor Mallard\u003C/span\u003E: Oh, this is interesting, yes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000265\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221bc9048e727e430dbfcef08e31c0b1f1\u0022\u003EJOHN KEY\u003C/span\u003E: Maybe Trevor can explain this question: why is a house in Auckland now the seventh most unaffordable in the world? Why does a house there cost 7\u00BD times the average earnings? Is it because that house is so expensive? I do not think so. It is because our wages are so low. In 7 or 8 years of Labour our wage growth has been half that of Australia. That is why New Zealanders cannot afford a house, and after today\u2019s announcement from Michael Cullen they will never afford one, because they are not getting a tax cut and they are not getting a wage increase; what they are getting is a little more than 45 years of renting, and then they get to retire.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000266\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EWhat Michael Cullen should have been doing today is getting up and giving an apology. He should have been apologising for driving the highest interest rates in the developed world. He knows, like the Reserve Bank knows, like the IMF knows, that the reason our interest rates are so high is that he has been out of control with the cheque book. It is not just the quantity of what he is spending on; it is the quality of what he is spending on. He has to step up and take some responsibility for those interest rates.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000267\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EWhile he is at it, when he looks at the inconvenient truth of his economic management, maybe, just maybe, he can explain why productivity is at an all-time low. Productivity in the private sector in this country is as low as it has been since the series began in 1988, and in the public sector it has gone backwards. [Interruption] As my health spokesman said, Michael Cullen is going to throw another three-quarters of a billion dollars at health, the waiting lists will get longer, the number of New Zealanders going overseas for health treatments will increase, and the quality of health care will go down.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000268\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EI thought it was pretty interesting the other day when John Roughan made a very interesting comment in his newspaper article on Saturday. John Roughan said that John Key had a vision for New Zealand that was a \u201Cstep change up\u201D. Well, I agree with him. That is exactly what we intend to do. It is exactly where we intend to take the New Zealand economy. It is exactly where we intend to take things. Under National, it will not be election year when there is a tax cut. Tax cuts will be there, rolled out, sharing the benefit. We will not be putting on petrol taxes if expenses are at the height they are now, if we have the surpluses that this Government has.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000269\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EWho owns this Budget? The answer is that nobody owns it. You see, this is a Government that has given up on the business of governing. Michael Cullen does not believe in company taxes. It is Peter Dunne who believes in that message. That is why Michael Cullen took $2 billion off the companies after he gave them $1 billion. Michael Cullen does not believe in company taxes. Michael Cullen does not believe in savings incentives, either\u2014that is New Zealand First. Michael Cullen has no solutions for monetary policy; that is why he sent it to the Finance and Expenditure Committee. Michael Cullen does not have any economic message. It is a tired Government and it has absolutely no ideas at all.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000270\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EWhile Labour is there, maybe, just maybe, Helen Clark might want to explain why she has racked up a bill of $1.7 billion for climate change. That is the record\u2014$1.7 billion. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000271\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209a5b71a-ca7e-4e7c-9e09-f9e63f18aa12\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b3ef8c372a5e4001803db30da4b33108\u0022\u003EHon Annette King\u003C/span\u003E: You\u2019ve got 4 more minutes. Hang in there.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000272\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220c9ffb67b67a46f4b010d8489adad091\u0022\u003EJOHN KEY\u003C/span\u003E: Maybe Annette King wants to explain why we are not getting $500 million. Well, I suppose it was Pete Hodgson who said we were going to get a cheque for $500 million. Now we owe $1.7 billion, and the Government will put $1 million into research and development to save it. That is the whole lot that is going in there.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000273\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003ELet me finish by saying something that I think members will find rather interesting. Labour\u2019s pollsters are a company called UMR. Labour members know UMR\u2019s pollsters very well. They have been running polls for them for a very long time indeed. What is just a little bit interesting is that last week a constituent of mine rang me to say they had been rung by UMR, which was undertaking a poll. The question was this: \u201CWhat will voters remember of the legacy of Helen Clark and Michael Cullen?\u201D. It is a shocking sign when Michael Cullen\u2019s own pollsters think the end is nigh. They are writing the appendix now, before he has even gone. I tell you what: they did not need to undertake that research; they could have rung me, and I would have told them what it was.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000274\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220083bcaa-f44d-4b70-97de-d091a209b88c\u0022\u003EMichael Cullen has had 8 years to capitalise on the best weather and the best economic conditions we have had in a generation. He had an opportunity to deliver a really bright future for New Zealand, and he failed, and no mickey mouse, roundabout Budget is ever going to save that. There was a time when I used to care who read Budget 2008. I will tell members this: I do not know whether it will be Michael Cullen who reads the Budget in 2008, and I do not care. I do not care, because I know who will read Budget 2009. It will be Bill English, and it will be a lot better Budget than this.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022 data-id=\u0022f2eba61825a348efb334ff1cea9a48df\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000275\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f2eba61825a348efb334ff1cea9a48df\u0022\u003ERt Hon HELEN CLARK (Prime Minister):\u003C/span\u003E Was that it? What a lightweight! As my colleague said, that speech makes a bird bath look deep. It contained no vision for New Zealand. It was a whole speech\u2014 \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000276\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022022cfe6b-bae4-4028-b68a-ccffb4269442\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b85bb3d38211483bb146198a3a0bfb4b\u0022\u003EMadam SPEAKER\u003C/span\u003E: I am sorry, Prime Minister\u2014please be seated. I do not mind the level of interventions, but they have got to the point where it is impossible to hear.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000277\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225e7cefd4ced94058b12249c2f69a74de\u0022\u003ERt Hon HELEN CLARK\u003C/span\u003E: A whole speech was spent promoting something that Mr Key\u2019s finance spokesperson does not even agree with. The finance spokesperson is not allowed to go on Close Up tonight because he is going around saying that big personal tax cuts are not affordable; his leader has just spent his whole speech saying the opposite. It was just another bankrupt Tory speech from a leader who would bankrupt New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000278\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003ERunning an economy is not about taking short-term positions in the market. Running an economy is not about gambling our country\u2019s future. That might be all right on the money markets for money traders, but it is not appropriate for running a country\u2019s economy. We know that if John Key had had his way last election, right now New Zealand would be cutting its health spending and its education spending. Right now Kiwis would be paying much higher interest rates, because National was prepared to promise anything, regardless of the damage it did to New Zealand. The choices are very, very clear. The choices are that one can write a Budget that backs investment and savings, or one can write a Budget that squanders New Zealand\u2019s economic potential\u2014which is the National Party way. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000279\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003E This Budget is about growing and developing New Zealand\u2019s economy and living standards. This Budget looks to the future and to supporting New Zealanders\u2019 aspirations for prosperity and security. The National Party looks back to the 1990s\u2014or was it the 1890s\u2014as we have just heard. Its policies did not work then and they will certainly not work in the 21st century\u2014they will not work. New Zealanders have got used to experiencing something much better under Labour\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000280\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221583b5cb-f4e0-4981-97ba-193c338ff404\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002224230fab0521409ea69f8771dd3524e1\u0022\u003EHon Marian Hobbs\u003C/span\u003E: I raise a point of order, Madam Speaker. I have very good ears, I have this speaker on full bore, but I cannot hear the Prime Minister.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000281\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022022cfe6b-bae4-4028-b68a-ccffb4269442\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223fb45494ccf9414abb03201c990fbd7a\u0022\u003EMadam SPEAKER\u003C/span\u003E: There are levels of disorder that cannot be tolerated. We know that the basic rule in this House is that people are entitled to be heard. Of course members may make their interventions\u2014it is that sort of debate\u2014but those interventions have now got to the area where in fact it is extremely difficult to hear anything.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000282\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223f1efcabd63c49e7beb32a0aedc241a1\u0022\u003EGerry Brownlee\u003C/span\u003E: I raise a point of order, Madam Speaker. I hope that you are not going to listen to too many more appeals about this. At the very opening sentence of Mr Key\u2019s speech, Mr Mallard\u2014sitting right next to the Prime Minister\u2014practically drowned out the rest of the House.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000283\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022022cfe6b-bae4-4028-b68a-ccffb4269442\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223e29c0eb6104492a99af46e400087c63\u0022\u003EMadam SPEAKER\u003C/span\u003E: I thank the member. I listened very carefully when Mr Key was speaking and he could be heard. There were interventions\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000284\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ec402f319a244cd88ef76e5e3ed70ca2\u0022\u003EGerry Brownlee\u003C/span\u003E: He couldn\u2019t be\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000285\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022022cfe6b-bae4-4028-b68a-ccffb4269442\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ef53571e5835486380fe0cf3cba90cd8\u0022\u003EMadam SPEAKER\u003C/span\u003E: Mr Brownlee, do you wish to remain in the House for the rest of this debate? If you do, please do not intervene.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000286\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e6b4dc55-3561-49a8-a871-ae005354ef90\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d5a531ab7cda46c79ef4903715100aeb\u0022\u003EGerry Brownlee\u003C/span\u003E: Quite honestly, no.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000287\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022022cfe6b-bae4-4028-b68a-ccffb4269442\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022660e1c79dc2b4276b766db302d65eba1\u0022\u003EMadam SPEAKER\u003C/span\u003E: Off you go, then. Please leave the Chamber.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000288\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022022cfe6b-bae4-4028-b68a-ccffb4269442\u0022\u003EGerry Brownlee withdrew from the Chamber.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000289\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022022cfe6b-bae4-4028-b68a-ccffb4269442\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227a34923de1ed4ab9a028dba285879b33\u0022\u003EMadam SPEAKER\u003C/span\u003E: As I said, of course it is the type of debate where there should be interventions, but every member in this Chamber is at least entitled to be heard.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000290\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226a843006ba914f7c88c0e16b113d3af3\u0022\u003ERt Hon HELEN CLARK\u003C/span\u003E: All that latest exchange proves is that all the hollow men can do is holler\u2014because they have no answers.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000291\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003EThe experience of the Labour Government has been an experience of long-term economic growth, it has been the experience of low unemployment, it has been the experience of rising living standards with high employment levels and support for families, and it has been the experience of investing back into those all-important basics of education, health, superannuation, law and order, and infrastructure. This Government has turned New Zealand around\u2014around from the nation that was demoralised and had no hope under a National Government. That was National\u2019s legacy. There is no point even in having a poll that asks people what they thought about it; they know it was misery, it went on too long, and it must never come back.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000292\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003ENot only has the economy been growing under Labour but it has experienced the second-longest run of continuous economic growth since the Second World War. We have seen benefit numbers tumbling\u2014not just of those on the unemployment benefit but of those on the domestic purposes benefit, and now sickness and invalids benefit numbers are falling as well. This Government has virtually eliminated the number of young people on the dole. It is down 92 percent\u201492 percent. All these things happen because of economic success under a Labour-led Government. Over there on the National benches, members have been sulking for 7\u00BD years\u20147\u00BD years\u2014and I say there are at least 7\u00BD years to go because their legacy was to leave behind a broken-down economy and a shattered society.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000293\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003EI ask members to look at what commentators are saying now about the 21st century economy. Perhaps Mr Key might like to consult the Hongkong and Shanghai Banking Corporation, which last week described the New Zealand economy as the miracle economy. That is high praise. Members should look at this month\u2019s monthly monitor from Business and Economic Research Ltd. Its economic indicators are at their most positive right now for any time in the last 5 years, with 32 of the 42 measures higher than they were a year ago. So this Budget is written against a background of economic growth and development.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000294\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003EThe challenge before the Government is to write a Budget that makes that situation continue, and that is best done by addressing the well-known imbalances in the economy. That means working to stimulate the export sector, which has been hurt by inflation pressures, particularly in the housing market. I am aware that although our exporters have shown considerable resilience, some of them are hurting and they wonder how much longer they can carry on. We know also that those high interest rates and that high currency have made the current account deficit particularly high, so the approach in this Budget\u2014to promote investment and to promote savings\u2014is the right approach at this time. It is the right approach at this time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000295\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003EThe Minister of Finance has outlined the three big areas of initiatives in the Budget\u2014firstly, the business tax reform and assistance package of $3.4 billion promoting investment, research and development, and upskilling and exporting. There was a party over there on the Opposition benches that used to say it was the party of business. When did its members last deliver a business tax cut? It was not in living memory\u2014not in living memory.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000296\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220bae2157bb0043e3a3b566153ace72d0\u0022\u003EHon Member\u003C/span\u003E: 1960s!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000297\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022705bf4032390462089338a4bd1a321be\u0022\u003ERt Hon HELEN CLARK\u003C/span\u003E: It was in the 1960s with \u201CKiwi Keith\u201D, not with \u201CMoney trader John\u201D.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000298\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003EThere is the $650 million rail infrastructure package, and there is the $3.2 billion KiwiSaver package. That package is good for our families, and it is good for the economy. It helps our families save for greater security in retirement, it boosts our nation\u2019s savings rates, it makes us less dependent on foreign capital, and it gives us greater control over our own destiny. It is good all round.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000299\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003EIt is good especially because it gives Kiwis an economic dividend from the growing economy without throwing fuel on the flames of the domestic economy. Members should make no mistake: the National Party approach outlined by Mr Key would see every family\u2019s mortgage go up, every business\u2019s mortgage go up, and the currency go up, and it would make the imbalances in the economy worse, not better. So this Government has set out to do what is right for New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000300\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003EWe believe that the corporate tax rate cut will help our businesses invest for the future. We believe that the new tax credit for research and development will support our businesses and industries in going upmarket. We also have more funding in this Budget for Government grants for science and research\u2014a lot of it directly helping our businesses and industries innovate in their products and services. There is new money in this Budget for industry training and for tertiary education; that is good for the economy, too. There is extra support for exporters, and that new funding going into the market development assistance scheme means a near doubling of the baseline support for those grants. That helps our exporters get out to market.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000301\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003EThe Government has long identified the state of New Zealand\u2019s transport infrastructure as a brake on economic development, particularly in Auckland. So this Budget is not only funding the commitment we made to the State highway programme but it is also acting to secure the future of rail and public transport in Auckland and Wellington. We are looking\u2014over the next 8 years\u2014to a 50 percent increase in per person public transport journeys in Auckland. We are prepared to play our part in investing in that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000302\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003EOur Labour-led Government is very proud of this Budget. Our philosophy has always been that the rising tide should lift every boat, and that as the country\u2019s economic capacity grows, we must invest back into basic services\u2014as our people expect us to. They expect Governments to deliver on health, education, superannuation, and law and order. They expect those things to be looked after, not cut, as they have long been under National Governments in the past. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000303\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003EIn the health area we have been able to provide another $3 billion over the next 4 years. There is a particular boost for care and services for older New Zealanders and for people with disabilities. That might not matter to the National Party, but anyone with aged parents, and any aged person who needs that care and those services, knows that it matters that workers are properly paid. We value and appreciate what they do, and this Budget makes that possible. It never mattered to the National Party through the 1990s\u2014and it does not matter to it now\u2014that people then could not afford to go to the doctor. This Government\u2019s Primary Health Care Strategy makes it affordable, and 1 July is the last roll-out date of that strategy\u2014lower doctors\u2019 fees and lower prescription fees for every New Zealander. But we cannot have that and have big personal income tax cuts\u2014those are the choices. Do we look after the basics and invest for the future, or do we just squander tax as the \u201CMoney trader\u201D would?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000304\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003EEducation is a very high area of priority for our Government. Come 1 July a very important policy will take effect, which is the 20 hours\u2019 free early childhood education policy\u201420 hours\u2019 free. This is, without doubt, the greatest expansion of the public education system since the first Labour Government brought in free secondary education. That is how important it is. The policy has been constantly attacked by National, because it prefers to give tax cuts to its rich friends rather than look after children\u2019s education. We know where our choice is.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000305\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003EThe same thinking lies behind the big increase in this Budget of teachers and classrooms for small children. This Budget takes us well down the track to the implementation of the 1:15 teacher-pupil ratio in our new-entrant classes. That is the first time any Government has ever committed to that. Operations grants for our schools are up 4 percent in this Budget. Funding for student allowances is up, which means that 12,000 more students will have the opportunity to get a full or partial allowance.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000306\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003EAs well, the Budget funds a very significant increase in New Zealand superannuation\u2014a 5 percent lift in after-tax pension income. That was something negotiated with the New Zealand First Party after the last election. We have been prepared to fund it, support parties are prepared to back it, and it will make a substantial difference to our older people\u2019s living standards. Also in the Budget is more support for respite care. Respite care is essential in giving a break to both carers and those they are caring for.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000307\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003EWe also see significant new spending in the law and order area\u2014again, that is something that has come out of the confidence and supply agreement with New Zealand First\u2014as we put in place the 1,000 new police. What will be seen from this side of the House is support for our police\u2014not abuse\u2014support for them to do their job.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000308\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003EThe Minister of Finance has focused on sustainability initiatives in the Budget, and we are working on ways of helping households and businesses save money and contribute to a cleaner environment. The urban rail initiatives are all about sustainability as well as public transport, and we are moving to promote greater energy efficiency in many ways. We have for some time been gearing up for a bigger programme to retrofit old homes that are not insulated. In this Budget, for the first time, we are looking to develop an interest-free loan scheme for a wider group of homeowners, so that they too can save money on their power bills and have warmer and healthier homes. That is very, very important. There will be a lot more promotion for businesses and homes generally about how to reduce their energy and water use, and recycle their waste. I will also give a plug to public recycling facilities. Frankly, some of the places, whether local or international, where our visitors visit are a disgrace in respect of rubbish. If we want our tourism image to be \u201C100 percent pure\u201D, as the posters say, we have to do something about cleaning it up, and the Government has made a commitment to do that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000309\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003EUnder the national identity theme of the Budget we are putting more resources into speeding up Treaty settlements. This House has passed legislation to close off historical claims by September next year, but that means we have to resource the negotiations and the inquiries that make settlement by 2020 possible. We will do that. There is more support for public broadcasting, including M\u0101ori television and radio, and for our digital content strategy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000310\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003EThere is more support for the Department of Conservation in respect of improved pest management around the conservation estate. Biodiversity is important to us. And we are supporting New Zealand\u2019s representation and contributions offshore through extra support for foreign affairs, defence, police personnel, and, of course, overseas aid.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000311\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003EI know that this Budget could be written and delivered only by a Labour-led Government. Just think of what John Key had in mind. Just think of no new investments in health and education, and no new investments in families and superannuitants but, instead, of cuts in those areas. Just think of not boosting the transport infrastructure out of taxation but tolling across the network, as Maurice Williamson wants to do. Just think of not making investments in business growth, innovations, skills, and exporting, but of sitting back, as National did for 9 years, and letting market forces rip our country apart.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000312\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228ff55f5e-9237-45e2-8e15-24228a10320e\u0022\u003EThat is not the future Labour sees for New Zealand, and I do not believe it is the future that the support parties voting for this Budget see, either. We are supporting saving, investing, and growth and development. We are working for New Zealand\u2019s long-term health and prosperity, off the back of considerable success from the time the Labour Government was elected. We look to lock in success through a better balanced economy, and that is why I say, with confidence, that this is a good Budget for these times.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022 data-id=\u002249c7610bea3c422a8fb4ac483ce6d8c1\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000313\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002249c7610bea3c422a8fb4ac483ce6d8c1\u0022\u003ERt Hon WINSTON PETERS (Leader\u2014NZ First):\u003C/span\u003E I just want to say at the start of my address that in the long time I have been in Parliament, I have never before seen what I have just witnessed today. Members from one political party were prepared to listen to their leader, but after he had spoken they were \u201CGone with the Wind\u201D. They are bad-mannered intellectual philistines, who are not prepared in a debating chamber to hear the alternative views of other parties on the biggest debate on any given day in any Parliament. A party that is not prepared to listen to the views of others is not worthy of governing. That is a disgrace. Mind you, it is that party\u2019s problem, because those members will miss out on some great dialogue from here on in. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000314\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003EThese debates are where New Zealanders look to for vision, hope, and leadership\u2014not the kind of vision I have just heard from the Opposition side of the House, which was more like an ingratiating nightmare, but real leadership and vision. Then there are others who cynically see Parliament as a soap opera. As I said, after the last case of hot air from the leader of the National Party, National members vanished or went with the wind. There was a little bit more drama here and there, and the most predictable lines were played out to well-worn plots. That has certainly been true of the contribution we heard in reply this afternoon. There was no original script and no original lines at all. It arises because this House\u2014in the case of so many of those National members over there, particularly the new members\u2014is full of prima donnas. They could fill the cast of Shortland Street. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000315\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003ESo the real question is what new performances have we seen in this Budget year thus far? We can see that for Labour this Budget is all about trying to find \u201CFriends\u201D. Labour now hopes that by \u201CMucking In\u201D its poll ratings will rise. That is predictable. Although there are some people who have questioned the Government\u2019s \u201CAgenda\u201D, the fact is that there is much that is commendable in this Budget, and those people cannot deny it. Much of what was in the Budget, I am pleased to say, my party has argued for over years. Even at this late stage I am pleased to see that it has now become the mantra of Parliament. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000316\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003ENew Zealand businesses have been waiting to get the economy into \u201CTop Gear\u201D. Cutting the tax rate to 30 percent, which brings us in to line with Australia, will go somewhere towards achieving this. But if our businesses are to really see \u201CHappy Days\u201D, again, we must go a lot further. There is much good work that is being done to build our export capacity in Export Year 2007, with further initiatives in this Budget. But how much better would things be if all new export profits were taxed at 20 percent, and we pursued some of the policies of successful economies\u2014like Ireland or Singapore?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000317\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002230786eaee1cb49048dc5360bcbbf1b8e\u0022\u003ERodney Hide\u003C/span\u003E: Why just exporters?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000318\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f266fb10f42d49cdb2146bb78e6518db\u0022\u003ERt Hon WINSTON PETERS\u003C/span\u003E: Why just exporters? I say to Mr Hide that that is because we are an export-dependent country. That is why. Coming in here with ill-applied, American ideas\u2014which is a totally different economy\u2014is what has so constrained this country for the last two decades. We should focus on exports, because, like so few countries, we are export dependent. I say to Mr Hide that instead of going off to Dancing with the Stars maybe he should pay attention to what is going on in New Zealand\u2019s economy. We must encourage our businesses to do better, both at \u201CHome and Away\u201D. It is the only way we will grow. New Zealand First fully supports the Government\u2019s efforts\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000319\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a541632afb854420968d545115254ef8\u0022\u003ERodney Hide\u003C/span\u003E: You\u2019re just jealous.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000320\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022eeda4516d9854694a5f41fcf5ddd4824\u0022\u003ERt Hon WINSTON PETERS\u003C/span\u003E: I am jealous? Excuse me? I am jealous of that spastic exhibition I saw on TV? For God\u2019s sake, the only person who would be jealous is Tana Umaga\u2014he cannot do a spear tackle that good! The member must be joking! I am jealous? Jealous of what?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000321\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022022cfe6b-bae4-4028-b68a-ccffb4269442\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b6b15c7022334eb1b5a7af461e1bfe45\u0022\u003EMadam SPEAKER\u003C/span\u003E: Order!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000322\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f0f222c3a5174a47b43352ac3bad7dc7\u0022\u003ERt Hon WINSTON PETERS\u003C/span\u003E: Well, I was asked\u2014and one can see why.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000323\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022022cfe6b-bae4-4028-b68a-ccffb4269442\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022183a975178c844bb80f954efd37f5c5f\u0022\u003EMadam SPEAKER\u003C/span\u003E: Could the member please return to the debate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000324\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228235b36f1fc146d79a9c76fd1b23aa92\u0022\u003ERt Hon WINSTON PETERS\u003C/span\u003E: We fully support the Government\u2019s efforts to build our savings base. The reality is that in Australia, and elsewhere, they have been playing \u201CWho Wants To Be A Millionaire\u201D for 15 long years. In fact, New Zealand\u2019s savings strategy, until today, was like a Lotto draw\u2014hoping and wishing that things would go away. I have to say that the announcement by Dr Cullen today, for New Zealand First, is a bit like going \u201CBack to the Future\u201D. I recall all of those comments that were made 10 years ago about New Zealand not having a savings plan. I recall all of those comments in particular from a party that claims to be conservative\u2014but is just plain reactionary\u2014that went up and down this country opposing a national savings strategy, and that put Jenny Shipley, who was hopeless, incompetent, and unprepared, in the job of Prime Minister. Where is she now? She has taken a \u201CSlow Boat to China\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000325\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d55ad41ed33f47d88b09bf6e4b624c6c\u0022\u003EHon Members\u003C/span\u003E: Who was Treasurer?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000326\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f4be2a6c39a549c6a2d731ea5f5897b1\u0022\u003ERt Hon WINSTON PETERS\u003C/span\u003E: Well, the Treasurer at the time was, of course, none other than yours truly. Today I am looking at a man, Bill English, who not only campaigned against the savings strategy but, in his next Budget, got rid of the programme designed to spend road-tax collections on roads. He will get up today and say otherwise, but if one looks at the 1999 Budget one sees that that is exactly what he did. So before people accuse New Zealand First of being \u201CSupernanny\u201D over compulsory savings, we suggest they look across the ditch and then tell us who was right and who was wrong.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000327\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b076c363357f45db93cd029b5f5a5828\u0022\u003EHon Members\u003C/span\u003E: We were right!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000328\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022208f8a43bcf14155812c162ddfca23bf\u0022\u003ERt Hon WINSTON PETERS\u003C/span\u003E: I say to those laughing backbenchers over there that they are not going to be here for 5 minutes if they keep on laughing like that. I saw Mr Borrows on TV.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000329\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224e9e3470869342b89e38058ef2227316\u0022\u003EHon Member\u003C/span\u003E: Who?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000330\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022747c8d9572004cb280e8a7241531ab11\u0022\u003ERt Hon WINSTON PETERS\u003C/span\u003E: Mr Borrows. I saw Mr Borrows on TV complaining about flak jackets not being carefully fitted and being too small. I wondered how the police could possibly know what would be the right size if they were all going to look like Mr Borrows. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000331\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003EWe do share one of Mr Borrows\u2019 concerns, and that is on the issue of law and order. We initiated the recruitment of 1,000 extra front-line policemen and policewomen. But our concern, for example, about the Department of Corrections today is that it is beginning to look more like \u201CPrison Break\u201D and \u201CGetaway\u201D. We have to do something about it. Our gangs are completely out of control on our streets at the moment. We have our own version of \u201CThe War at Home\u201D, and it is not pretty. We can, and we must, do better. The time has come to declare war on gangs, and to say that enough is enough. The time has come to give the image of M\u0101ori a chance instead of the degrading vision so often on TV at night at 6 o\u2019clock, which is that very abhorrent vision that the M\u0101ori people in this country do not want. The time has come to act now. In South Auckland on any given day and at any given school\u2014and sometimes this will be for one classroom\u2014one can find 15 kids with serious weapons on them, mostly knives. Ask any teacher who knows. This is way out of hand, and the sooner we do something about it then the better we will be. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000332\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003EWhat sort of environment are we providing for our young people to learn in under those circumstances? We have heard from all of the apologists\u2014all the sociologists. We have heard them say that it is too hard or that we should give these young people a chance\u2014well, we in New Zealand First say that they have had their chance for four long decades. We say that it is game over. The war on gangs is now a \u201CGame of Two Halves\u201D. We are now entering the second half, and New Zealand First says that it is time for the right team to start winning. We will outlaw the gangs, hunt them down, shut them down, and rid our society of their scourge. [Interruption] For those members who laugh, let me say that they laugh because they know nothing of the society in which they live. How can they, with their pristine backgrounds? That member from Hamilton has never done a day\u2019s work in his life. He probably thinks that manual labour is the President of Mexico. I ask members to have a look at him. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000333\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003EI say that the gangs have had their warning. Any party that seeks to work with New Zealand First after 2008 will meet the condition requiring their support, which is the assurance that gangs will be shut down once and for all. One could say that they could be \u201CThe Departed\u201D. I heard a lady on Radio New Zealand National today between 9 a.m. and 12 p.m. Her name was te Heuheu. She has been 30 years in that world of association with the gangs, and she was as certain as I am that they should be outlawed. She is M\u0101ori; she is sympathetic, but this abomination must go, and go now. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000334\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003EWe are pleased with the $400 million extra going into the elder-care sector\u2014it desperately needs it. It is long overdue. We hope that it also relates to proper wage adjustments within the aged-care sector. We cannot have women of 55 or 60 years of age, who are experienced and conscientious, getting the lousy wages that they have been getting. So I am pleased and delighted\u2014as are my colleagues\u2014for that $400 million extra going into the elder-care sector. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000335\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003EWe applaud the increased funding for making free health-care more accessible for children under 6. But we ultimately hope that that will extend to all primary school - aged children. New Zealand First believes that there should be a little \u201CNip/Tuck\u201D when it comes to the administration where health care is concerned. There should be much less administration. Far too much of our health sector looks like \u201CER\u201D\u2014one dramatic crisis after another. New Zealanders deserve better. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000336\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003ENew Zealand First is pleased with the massive increase in overseas aid, with most of it going to the Pacific. I am also delighted with the greater expenditure on the one agency that is our image abroad\u2014the Ministry of Foreign Affairs and Trade. I am grateful for the Government\u2019s support on that initiative. It is desperately needed if we are, in an economic sense, to match the First World in the 21st century and also fulfil our obligations to our own neighbourhood. Success in our own neighbourhood makes us strong in the eyes of others miles and miles away\u2014in the European Union, the US, and Asia. It is important. One could say that we believe in being good \u201CNeighbours\u201D, but I will speak more about that later. As we strengthen our own neighbourhood we make our future more secure\u2014the two things go hand in hand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000337\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003EThis Budget is an MMP Budget, because this is an MMP Parliament. New Zealand First, like United Future, welcomes efforts on reducing business tax. The United Future party, though, I am sad to say, seems to be going through its own version of \u201CDownsize Me!\u201D. Some parties deserve this and some do not, and New Zealand First feels genuinely sorry for Peter Dunne and his remaining colleague on this matter. We know exactly what it is like to have people ride into Parliament on one\u2019s coat-tails. We know about all the effort, the sacrifice, the expenditure, the door-knocking, and all the work over years to get them here, and then they suffer from delusions of grandeur and stab one in the back. The soap opera about which I speak reminds of that called \u201CRome\u201D, where someone has been left with a knife in his back. The explanation on Morning Report this morning was a disgrace. How can a person call himself a Christian when the first act of his party is 5 months of deception against his leader and the troops that put him here?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000338\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003EWhen it comes to the National Party on the soap opera front, the only thing I could describe its members as is \u201CLost\u201D. They are several divided tribes who never know whom they can trust and whom they cannot, and they are stuck someplace they do not want to be. They went from having \u201CThe Odd Couple\u201D of Don and Gerry to \u201CMy Two Dads\u201D\u2014the present couple.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000339\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003EJohn Key, of course, is going through his own version of \u201CThe Apprentice\u201D. First it was Jenny Shipley who got the line: \u201CYou\u2019re fired.\u201D Then it was Bill English: \u201CYou\u2019re fired.\u201D Then it was Don Brash. The one whom they said was the greatest leader the National Party had ever seen, Don Brash, was told: \u201CYou\u2019re fired.\u201D Then, of course, there is Nick Smith. He is living proof that still waters run shallow: \u201CYou\u2019re fired.\u201D Then there was Gerry Brownlee, Parliament\u2019s heaviest lightweight: \u201CYou\u2019re fired.\u201D Why was it that John Key today kept on screwing up his notes after he had completed each page of his speech? Why would he be screwing up his notes?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000340\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209a5b71a-ca7e-4e7c-9e09-f9e63f18aa12\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002228207ae3cc754140bc1579a9386cda81\u0022\u003EHon Annette King\u003C/span\u003E: Cos he\u2019s talking rubbish.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000341\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002249af97e087444b778a894920a703c639\u0022\u003ERt Hon WINSTON PETERS\u003C/span\u003E: My colleague says it is because he was talking rubbish. He was getting it ready for the round filing basket. That is typical.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000342\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002223de6bd3-0482-495d-88f4-7cc3f75d8442\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223e28a0dcc558450a83819a3904017f3b\u0022\u003ENathan Guy\u003C/span\u003E: You can do better than that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000343\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228930c729dbcc481196caa6061c6e3fbe\u0022\u003ERt Hon WINSTON PETERS\u003C/span\u003E: Yes, of course I can, and I will get to that member shortly. Now we are going through the John Key episode. He and Bill English are playing their own version of \u201CWhose Line Is It Anyway?\u201D over everything from tax cuts, climate change, and dealing with the newly discovered underclass. Of course, John Key is right in the middle of an \u201CExtreme Makeover\u201D. Everything Don Brash stood for, John Key is renouncing. On Treaty policy, an extreme makeover; on climate change, an extreme makeover; on KiwiSaver, an extreme makeover; on 4 weeks\u2019 annual leave, an extreme makeover\u2014and I could go on. National\u2019s solution, of course, has always been based on one of \u201COutrageous Fortune\u201D: tax cuts funded by savings on services, cutting services, large borrowing, and selling off more of the family silver\u2014just like National members did back in the 1990s. For a brief time I was able to stop them, but they went straight back to it. [Interruption] It was October 1998. Despite all the desperate rhetoric, they are really like \u201CDesperate Housewives\u201D, looking around for a suitor come the next election. I know they will climbing over cut glass. I saw them do it before, twice, and now they are coming again.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000344\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003EACT, of course, is still reminiscing about Dancing with the Stars, but all the stars have gone now. In fact, we have seen Rodney go from \u201CTwo and a Half Men\u201D to disappearing \u201CWithout a Trace\u201D, just like his party. For most of New Zealand, of course, the Greens are a combination of \u201CFantasy Island\u201D and \u201CFear Factor\u201D, and although most New Zealanders had wished the M\u0101ori Party had stayed on the \u201CMarae\u201D, we now have those members stepping into \u201CNative Affairs\u201D. They are not an option that National wants to entertain.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000345\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003EThen there is the one drama show that is now topping the ratings because it is original, creative, and has integrity, just like the one political party that now stands out from all others and offers real hope in 2007. The show is, of course, called \u201CHeroes\u201D, and the political party is, of course, New Zealand First. We are the party that has demonstrated that one can have quality policy solutions, and that one can argue for them for years and get defeated, but those ideas, because they are quality ideas, will one day become a reality. Today we saw that almost get there in the savings plan announced by Dr Cullen. We have proven that New Zealand can have policies\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000346\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a11ce4e-9fb3-4738-b0be-5a9f81d975da\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fc26120e719245f8b7f9cb20b74ad99f\u0022\u003EHon Maurice Williamson\u003C/span\u003E: This is like \u201COne Flew Over the Cuckoo\u2019s Nest\u201D.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000347\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225d41305d1c264963babbe6428c70b882\u0022\u003ERt Hon WINSTON PETERS\u003C/span\u003E: Well, we know who flew over the cuckoo\u2019s nest in the case of Maurice. He kept on coming back.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000348\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003EWhich party is a hero to our seniors? It is New Zealand First. We want to ensure their quality of life is so much better through higher superannuation, through the SuperGold card, and through the huge increase in the funding of care for elders. We are heroes to New Zealand business because we have gone for tax cuts. We want to rewrite the Reserve Bank of New Zealand Act so that our exporters might get a fair go, and that is what we will be arguing to do all the way to the 2008 election. We want a Reserve Bank of New Zealand Act that recognises that New Zealand is a uniquely export-dependent economy. We are heroes to New Zealand families. Young people today and other people on the minimum wage are getting $70 more per week because it is in our agreement to get that. We are heroes to Kiwis who want to see the Kiwi way of life preserved, their ideals protected, and their quality of life enhanced.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000349\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223d49aeac-8adf-497b-9400-ab7bb077bb8d\u0022\u003EI close by saying we are heroes to those who want to see New Zealanders as one people\u2014different cultures but bound by shared values. We want to end the politically correct nonsense that has surrounded the Treaty, and it will take heroes to do it. You see, New Zealand needs political heroes who are prepared to stand up on the tough issues when others will not. Who told me in Rotorua back in 2005: \u201CWe can\u2019t afford to pay more to the superannuitants.\u201D? Don Brash did. We stuck it out, and it is there today. We know we take a risk in standing up and fighting for ordinary New Zealanders, but it is worth it. It is not easy. We now have business tax cuts, a huge change in the savings plan, $400 million for aged care, the greatest ever increase in overseas development aid, and 1,000 extra police. As they say in the ghettos of North America: \u201CIs that black enough for you?\u201D. I close by saying that it is not easy, but that is what heroes do, and it is what New Zealand First does best.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002209278070-a54a-41e9-8a27-45166301277e\u0022 data-id=\u002278b9cffcd752402a9ce0532fc76bec7b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000350\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002278b9cffcd752402a9ce0532fc76bec7b\u0022\u003EJEANETTE FITZSIMONS (Co-Leader\u2014Green):\u003C/span\u003E I start by congratulating the Minister of Finance on his pale yellow tie. I remember that last year he wore a Shot silk tie with red and blue in it. I guess that leaves him with no other choice next year than to wear a green one, and we look forward to that. Ever since the Prime Minister\u2014[Interruption] \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000351\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EI raise a point of order, Mr Speaker. I apologise for not noticing that you had taken the Chair. I have very little voice left and will not be able to shout in this speech. I am not asking to be heard in silence; I am asking just for the noise to be down a bit.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000352\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226af8873e3df646fcb36ba91679814cf4\u0022\u003EThe ASSISTANT SPEAKER (H V Ross Robertson)\u003C/span\u003E: That is at the discretion of the House.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000353\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229fad71db2d174062ab58072c59b303b2\u0022\u003EJEANETTE FITZSIMONS\u003C/span\u003E: Ever since the Prime Minister declared an aspiration for New Zealand to become carbon neutral and truly sustainable, the nation has been waiting for the means to this end to be revealed and funded. Instead, we have a Budget designed to make us a teensy-weensy bit less unsustainable in a few years, with carbon emissions growing just a little bit more slowly than they are now, provided we do not upset anyone and provided we continue to move slower than all our trading partners. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000354\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EThis is the first Budget since the Stern report, a World Bank report on the costs of addressing climate change, which showed that addressing climate change would be costly but not nearly as costly as ignoring it. It is the third Budget to have ignored the Millennium Ecosystem Assessment report, which told us that the resources we depend on now\u2014fresh water, climate, soils, and fisheries\u2014will not be there for our children if we continue to use them as we do now. It is the first Budget since Al Gore\u2019s An Inconvenient Truth hit the screens, raising public consciousness to the point where the ShapeNZ poll this week found that over 80 percent of voters think that climate change is a problem, 36 percent think it is an urgent and immediate problem, while only 8 percent think it is not a problem at all\u2014they are mainly ACT supporters. If the Prime Minister\u2019s aspiration is serious, we might have expected a price on carbon this year that is linked to the world price, and a fairly rapid transition to polluters taking full responsibility for their carbon emissions. We might have expected a substantial fund to invest in cleaner technology, better planning and design, sustainable infrastructure\u2014like public transport, a decent rail system, and coastal shipping\u2014planting of steep eroding land, and incentives for businesses to be more sustainable. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000355\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EEarlier this week in the House I quoted from Lester Brown\u2019s highly respected book Plan B: Rescuing a Planet Under Stress and a Civilization in Trouble. He says: \u201CSaving civilization means restructuring the economy\u2014and at wartime speed. It means restructuring taxes to get the market to tell the ecological truth. And it means reordering fiscal priorities to get the resources needed to restore the earth, eradicate poverty, and stabilize population \u2026 If we cannot restructure the tax system to enable the market to tell the truth, we almost certainly will not make it.\u201D He is talking about the survival of large sections of humanity and of many other species with which we share the earth, by protecting and restoring their life support systems. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000356\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EI have argued in this House for the last 10 years that we need to change the way we measure economic success in order to focus on human well-being and include environmental sustainability, and that the genuine progress indicator would be a good way to start. We have also been arguing that we should reduce taxes on desirable things like goods, work, and enterprise, and instead tax waste, pollution, and the use of scarce resources. Once again, after 10 years, we have a Budget that largely ignores that. In fact, this Budget takes a step backwards, in that last year we still had a plan for a carbon tax to come into effect this year. Now it has gone and there is nothing to replace the lost $360 million of revenue. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000357\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EIncome tax, company tax, and GST are bearing even more of a burden, proportionally. A huge opportunity has been lost with the business tax cuts handed out indiscriminately to polluters and conservers, fossil energy and renewable energy, organic farming and highly toxic farming, good employers and bad employers, and innovators and laggards in technology. Those cuts will produce no change in behaviour and serve no public good, except for lining a few pockets. Instead, we could have had a system of tax incentives that rewarded sustainable investments, especially in technology to save energy and water, reduce toxic materials, and replace fossil fuels with renewables. A Government that truly cared about sustainability would not have missed this opportunity. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000358\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EThis Budget was the chance for the Government to show whether the Prime Minister\u2019s statement was a serious policy goal or hollow rhetoric. It was the chance for the Government to put its money where its mouth is. But the money turns out to be only farthings. Specifically, in a Budget where a surplus is identified as $1.7 billion, we are told that there is $7.5 million a year for \u201Csustainability\u201D. I will be generous and add to that the $18 million for energy efficiency, the $16 million a year capital investment in rail\u2014which, of course, does not come off the operating surplus\u2014and some amount on climate change that must be small or it would have been identified in the speech. We were given no numbers on that. It is not that there is nothing in this Budget that goes in the right direction; it is that sustainability is a minor footnote. What is there is the result of hard lobbying by the Greens from a position right outside Government where we are not even supporting on confidence and supply. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000359\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EHowever, let us celebrate the small things, starting with the initiatives that flow from the Greens\u2019 cooperation agreement with the Government. On energy efficiency, an overall package has been put together as part of the New Zealand Energy Efficiency and Conservation Strategy to upgrade people\u2019s homes. Declining funding for insulating low-income homes is being replaced so that we can continue at the rate of 12,000 a year. A new interest-free loan scheme will enable people to get their homes insulated and to pay back out of their power savings. That will also include clean, efficient heating devices, because insulation alone is not enough to improve health and well-being if there is no affordable heating source. We also have the new building code coming into effect later this year, with upgraded insulation requirements for new homes, which in effect will mean double glazing through much of the country. There is new money for the Home Energy Ratings Scheme to go operational at the end of this year, giving every home the chance of a quality mark in energy efficiency. This will protect homebuyers by informing them about the energy performance of the home they are considering buying, and it will provide a market advantage for those with superior standards. The $15.5 million Green-initiated solar water heating programme is funded in this Budget and is already rolling out, with better quality standards, consumer information, installer training, and grants for complying systems. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000360\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EAlso new, as signalled in the Greens\u2019 cooperation agreement but without any acknowledgment today in the speech, is $2.2 million a year for the ecological restoration of three of New Zealand\u2019s foremost wetlands\u2014Whangam\u0101rino in the Waikato, the Ashburton Lakes and Upper Rangitata River in inland Canterbury, and the Waituna Lagoon in Awarua wetland complex in Southland. This new baseline funding is more than 10 times the funding these sites have had to date. We can expect it to reverse declining water quality, control invasive pests and weeds, and protect endangered birds\u2014such as the bittern, fernbird, crested grebe, and the wrybill\u2014some of which are internationally important, as they fly across the equator twice a year to breeding grounds in Siberia and Alaska. Eventually, these sites will have the potential for the reintroduction of locally extinct brown teal. The Greens have ensured that a large part of these projects will be delivered by partnerships between the Department of Conservation and local communities, especially adjoining landowners, iwi, and local conservation and land-care groups. They will also operate as test beds for new methods of control that are acceptable to local communities. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000361\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EThe revelation of my co-leader, Russel Norman, that our savings in the Superannuation Fund and other Government funds are being invested in nuclear weapons production, uranium mining, tobacco, landmines, and other socially and environmentally destructive practices has obviously somewhat embarrassed the Government. We are very pleased to see the transparency requirements for managed funds and the advisory committee on socially responsible investment. But we do not note any change signalled in the Budget for the investment of public funds, such as the Superannuation Fund and accident compensation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000362\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EAfter years of pointing out the embarrassment of being near the bottom of the OECD in our generosity to countries struggling to survive, we celebrate the increase in overseas aid from 0.27 percent of gross national income (GNI) to 0.3 percent. This is a big victory, considering that the Government previously intended raising it to only 0.28 percent in this Budget. The Greens have been pushing the Government hard on this\u2014as stated in our cooperation agreement, and for some years before that. Of course, much of the credit should go to the determined effort of the whole aid community over several years under the 0.7 percent campaign. The Greens will continue to work closely with this campaign for a timetable to get New Zealand from the 0.35 percent of GNI that this Budget projects New Zealand to be at by 2010, to the 0.7 percent international target by 2015. It is urgent to help developing countries in Pacific Island States at our back door to leapfrog the fossil fuel age and develop clean energy technologies that will give them a more stable future. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000363\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EOne of the most important investments we can make to reduce carbon emissions is in transport\u2014in particular, to reduce the huge imbalance between funding for new roads and for lower carbon transport options. Labour-led Governments have, for the last 5 years, poured megabucks into roadbuilding. They have so stretched the capacity of the construction industry that it is pushing up prices far faster than inflation. All the international evidence is that countries that rely primarily on road transport, with poorly developed or non-existent rail, public transport, and travel demand management, have high carbon emissions. In New Zealand, transport is responsible for almost half of our carbon dioxide emissions\u2014one of the highest proportions in the world. Public transport spending has not kept pace. What improvement there has been is largely owing to the influence the Greens had in a special agreement in the 2002-05 Government where we managed to get a substantial part of the petrol excise ring-fenced for public transport, travel demand management, walking, and cycling. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000364\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EWe are pleased to see some further progress in this Budget, as a result of our efforts. First, the Wellington rail improvements will take some pressure off the Kapiti Coast road. This Budget funds only about half what is needed, but if the rest were funded we might well find that pressure for Transmission Gully would reduce considerably. I have to give some credit to the Option3 lobby group, which has consistently done the analysis to show that an improved rail option on the western corridor would be cheaper and more sustainable than more big roading projects. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000365\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EWe also, finally, have the prospect of a mechanism for funding the electrification of the Auckland rail system, which is an essential first step to increasing its carrying capacity from 5 million passenger trips a year to 38 million, and eventually more. We have watched the Government gradually warm to the idea, as Auckland has made it abundantly clear that it wants more spending on public transport and proportionately less on roads. There has been a petition, e-cards, and a very well-attended public meeting in Auckland calling for the Government to fund its share of the capital cost, which will allow more frequent, more reliable, cleaner, and quieter trains. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000366\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EA regional petrol tax, of course, still has Auckland paying for it, yet it does not have to pay a penny for State highways like the western motorway, known as State Highway 20. This is the big imbalance that must be addressed. Big roads cost the regions nothing; for public transport, they have to find much of the money themselves. Legislation still has to be developed to provide for regional petrol taxes. We will reserve our position on that issue until we see the bill. Yet another way of funding yet more roads is the last thing we need. It is time to even up the balance a bit. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000367\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EIt is pretty clear that if the Greens had not been in Parliament, it would have been hard to find much in this Budget to support the Prime Minister\u2019s stated goals. But in looking at the new things in the Budget, we should remember also the many Green initiatives that are included, without headlines, because they were found, in previous years, to be so effective that they have been baselined. As a result of previous Green Budget initiatives, which are now permanent, we have, for example, environmental legal aid, community internships, organic farming support, increased energy-efficiency funding, and the Conservation with Communities programme, to mention just a few. The last Budget allocated $11.5 million to the Buy Kiwi Made programme, run by my colleague Sue Bradford. In August this year we will see the beginning of the Buy Kiwi Made media marketing campaign. The Green Party looks forward to that, celebrating New Zealand manufacturers during the difficult period they are facing and encouraging New Zealand consumers, including the Government I must say, to support New Zealand products when they make their purchasing decisions. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000368\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EPast Budget initiatives that are not baselined but continue to be funded this year, include environmental education and support for schools to offer better food to children. There have been calls today for a Budget that delivers tax cuts so that an economy running on consumption-led growth can consume even more. Consumption-led growth is what one gets with a high dollar, giving us cheap imports but poor export returns, and massive household debt fuelled by a perception of wealth from rising house values. Banks are not just offering easy credit; they are pushing credit in our face and suggesting we are fools if we do not let our house pay for a new car and an overseas holiday. So we support much greater enforcement of current rules on capital gains, but we doubt they are strong enough or that they will work without addressing also the use of loss-attributing qualifying companies. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000369\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EWe also give qualified support to the tax rebates through KiwiSaver. It is a clever way of ensuring that the assistance does not add to consumption-led inflation, and that it goes to those on low incomes equally with those on high. This, I have to say, is vastly different from the scheme put forward in 1998 and rejected comprehensively by New Zealand voters. However, it continues the current discrimination between part-time workers and full-time workers, and against beneficiaries such as invalids, who will have no savings in their old age. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000370\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003ETo conclude, we cannot vote for this Budget because it fails to deliver even the first stage of investing in a sustainable future, making a mockery of the Prime Minister\u2019s goals. Our cooperation agreement always anticipated that this would be the case, given the current make-up of the Government and its support. That is why our agreement is to abstain. However, we see no reason to break our commitment and oppose the Budget, given that the Government\u2019s side of our very modest agreement is slowly being delivered. There is some way to go yet to implement the full agreement, and there will need to be progress next year, but we have no evidence at all that a National-led Government would deliver anything closer to the programme the Greens have outlined for survival; so we will not vote to bring down the Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000371\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EWe hope that over the next year or so the competition to win the votes of the increasing number of New Zealanders who are seriously concerned about environmental sustainability will move from where it is now\u2014a race to be not last\u2014to a race to be first. Then we may have a partner that we can work with enthusiastically in a new Government.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022 data-id=\u00223083bc9a1e5049b097bbedb415397c68\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000372\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00223083bc9a1e5049b097bbedb415397c68\u0022\u003EDr PITA SHARPLES (Co-Leader\u2014M\u0101ori Party):\u003C/span\u003E T\u0113n\u0101 koe, Mr Assistant Speaker. I was thinking of previous Budgets, previous Governments, and, in particular, a former Minister of M\u0101ori Affairs. We call him he Tipua\u2014one of a kind\u2014a leader of M\u0101ori who was able to advocate for, and achieve, the transfer of State resources to assist the Treaty partners in the path to self-determination. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000373\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EThe leadership of Sir Apirana Ngata established the benchmark by which we can assess all subsequent Budgets\u2014as we do today. Not for Ngata a Budget in which M\u0101ori are denied, as in 2005. Not for Ngata a Budget in which the Minister failed to bid for any new funding for M\u0101ori, as in 2006. Not for Ngata a Budget in which funding for M\u0101ori projects is allocated, but not in any amounts of any significance, as in 2007\u2014the add-on Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000374\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EThe M\u0101ori Party will be the first to say we support any appropriation to advance M\u0101ori development. We are relieved that the Crown appears to have finally recognised the innovation and initiatives led by M\u0101ori, even if that recognition is, at best, tokenistic. This Budget allocates some $3.3 billion, of which $19.9 million is new funding specifically for M\u0101ori. That equates to a grand total of 0.6 percent of the funding. Wow! But, forever looking for the silver lining, we welcome the investment in the proud and independent voice of M\u0101ori being enhanced through $1 million a year for iwi radio, and $5 million a year for M\u0101ori television, the voice of our nation\u2014m\u0101 t\u0101tou, for everyone. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000375\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EWe welcome the move towards reconciliation promoted with another $2 million a year to the Waitangi Tribunal. We are pleased that the initiative that Tariana Turia pioneered\u2014the Mauri Ora framework\u2014to support wh\u0101nau in the prevention of violence has been extended to include another 60 workers. We congratulate those hard-working heroes in our community\u2014M\u0101ori wardens\u2014who are today rewarded with $2.5 million of support. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000376\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EWe come to this House saluting the spirit of enterprise and entrepreneurial vigour that has defined tangata whenua. We think of the wh\u0101nau who gathered in an old factory at Pukeatua in Wainui\u014Dmata some 25 years ago to set up a language nest, te k\u014Dhanga reo. That initiative grew into a movement of some 513 k\u014Dhanga reo to nurture te reo rangatira. Today that initiative is rewarded with the equivalent of $6,000 a year for every k\u014Dhanga. That is not a lot, but every bit counts. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000377\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EBut we also recognise that one of the main difficulties facing both k\u014Dhanga and kura kaupapa M\u0101ori is the challenge of finding trained and experienced teachers who are fluent in te reo. Although the Budget provided for some support for k\u014Dhanga, and funding for year 1 teachers, we are mindful that some 30,000 students are currently receiving M\u0101ori-medium education, and we were disappointed to see that there was nothing explicitly allocated for kura and wharekura other than the capital funding for property. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000378\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EIndeed, I would call this Budget the add-on Budget. It adds little trinkets for M\u0101ori to sprinkle in and stir, little gems like $30,000 a year to conserve M\u0101ori taonga. That does not sound like much when we know that Sotheby\u2019s has valued the Treaty of Waitangi at $32 million. Although we are of course mindful of being grateful for small mercies, a number of things just will not go away. For a start, there are some 9,000 M\u0101ori students who woke up last Budget day to the news that the manaaki tauira fund had dried up, leaving them under financial strife to buy textbooks, learning resources, and study materials, and to pay their fees. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000379\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EYes, there will be another $150,000 a year for the Ng\u0101rimu scholarship, and we are pleased to see the $6 million in research capability for w\u0101nanga. But the unknown factor, of course, is how this will increase retention and completion rates in tertiary education for M\u0101ori. Although some might be happy enough juggling the small change, we cannot ignore the grim reality of other statistical pressures that are literally in our face\u2014facts such as that although 21 percent of the school population is M\u0101ori, M\u0101ori account for 41 percent of all stand-downs and 47 percent of all suspensions. Another fact is that 53 percent of M\u0101ori left school without even a National Certificate of Educational Achievement level 1, compared with 20 percent of P\u0101keh\u0101. This is a picture of total system failure for M\u0101ori in general stream education, a system in which 91 percent of M\u0101ori children are enrolled. This Budget does not include the M\u0101ori education strategy that M\u0101ori have been calling for. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000380\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003ESo perhaps the picture might be brighter for health. The M\u0101ori Party has long been concerned that M\u0101ori infant mortality is also significantly higher, with 7.2 deaths per 1,000 births compared with 5.6 deaths nationally. We are thus well pleased to see a $124.2 million investment in child and youth health over 4 years. But, again, we come to the crunch. We know all the determinants, facts such as that 40 percent of M\u0101ori are expected to develop type 2 diabetes, with 5 percent of that number dying each year, or that life expectancy for M\u0101ori, on average, is 8 years less than for P\u0101keh\u0101. PricewaterhouseCoopers suggested that $50 million per year would be a good start to avoid the massive future cost of preventing and treating diabetes, such as that involved in heart failure, blindness, circulatory problems, and amputations. This Budget allocates a quarter of that, giving $50 million over 4 years. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000381\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EWe do not see much in this Budget that will address the rise and rise of poverty; that will satisfy the 120,000 New Zealanders who petitioned Parliament to \u201Cmake poverty history\u201D. They must be heard. Indeed, our preliminary analysis suggests the gap between rich and poor just continues to grow wider. An offering of peanuts will not do much to address the pervasive assault of poverty that afflicts so many in our wh\u0101nau. All of these figures give us every reason for arguing for the management of appropriations to be in the hands of the M\u0101ori partner. The Crown has failed in its capacity to fulfil the promise of article 3 of the Treaty of Waitangi. Insufficient funds for Treaty settlements, including quantum, mean that attempts to address article 2 breaches remain unfulfilled. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000382\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EGovernments speak of \u201Cwhat the country can afford\u201D, despite successive years of accumulating surpluses\u2014a whopping $7 billion dollar surplus. It appears to us that the price of justice for M\u0101ori\u2014the price of citizenship, which Ngata wrote of in 1943\u2014will always remain a debt. It is a debt that the mean-spirited appear unwilling to pay. On the basis of human rights and Treaty jurisprudence, a compelling case exists for an independent and adequately funded approach that unbundles funding to be redistributed fairly. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000383\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EThe M\u0101ori Party believes that M\u0101ori social aspirations have been poorly served by the mismanagement and policy neglect inherent in a mainstream bureaucracy. Mainstreaming, from its very genesis, was never about Treaty justice or enhanced citizenship rights. It was about savings; savings for the Crown sliced off the backs of M\u0101ori. As a consequence of mainstreaming, Vote M\u0101ori Affairs was reduced back in 1991 by $212.4 million. Of that, $114 million was retained by the Crown as savings. These are savings that could well have prevented a reality in which 36.5 percent of people receiving the unemployment benefit are M\u0101ori. They are savings that may have addressed the stark face of poverty, extreme income inequalities, and the rising proportions of M\u0101ori families in severe hardship. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000384\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EThis Budget does not address that stark reality. The M\u0101ori Party believes that the only way we will truly achieve change is to instigate the unbundling of funds to assess the effectiveness of money spent for, and on behalf of, M\u0101ori. The way to do this is painstakingly simple. It requires a technical amendment to the Public Finance Act to enable Te Puni K\u014Dkiri to monitor all Crown agency expenditure on M\u0101ori. At this current point in time, the Treaty partner is being denied the information to be able to reliably gauge the effectiveness of the Government spend on M\u0101ori. If we are to truly recognise two parties to the Treaty, we must also agree on how the Budget allocation is to be shared, managed, monitored, and reported upon. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000385\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EThe Treaty Tribes Coalition has advised that the greatest shortcoming of our present constitutional arrangements is the failure to recognise the fundamental significance of the Treaty. The Treaty Tribes Coalition is a major force amongst M\u0101ori. We want to see that all legislation introduced to this House is able to maximise the fulfilment of M\u0101ori aspirations. A starting point to how such a strategy will be achieved is found in the genuine progress index. This is a system of accounts that gives priority to an alternative economic system\u2014a system driven by kaupapa\u2014by measuring the true costs against the benefits. Under such an index, we welcome the EnergyWise package: $20 million a year for energy-efficiency initiatives, and $7 million a year to enhance sustainability. These are real steps in preparing for climate change. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000386\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002219767ece-60f1-4014-9855-74afaa34e699\u0022\u003EWe believe that if the State were to unbundle the funding, we would be in a far better position to assess social, economic, and cultural policies and programmes to determine what effect that spend is having on M\u0101ori. We do not want any more piecemeal adhockery. We seek progress on a grand scale, progress and prosperity, and the outcomes that really would achieve meaningful change. Thank you, Mr Assistant Speaker.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022 data-id=\u0022ca1c73a251794c48a63062440246fbf7\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000387\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022ca1c73a251794c48a63062440246fbf7\u0022\u003EHon PETER DUNNE (Leader\u2014United Future):\u003C/span\u003E United Future is pleased to give its support to this Budget, because in many senses it delivers on a number of the key policy objectives that were put in our election policy in 2005 and that were part of our confidence and supply agreement with the Labour-led Government. I refer to the business tax review, to the changes in the donations regime for charities, and to the establishment of a pest-control group to study how future pest management can occur in this country. I want to talk about each of those in a little detail in the time I have available this afternoon, because collectively they demonstrate the role that a small party can play in supporting a Government to achieve its policy objectives and make significant progress for the benefit of the people of New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000388\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThis Budget contains a $3.4 billion business tax package. It is the biggest business tax package since 1988 and the first change to our corporate tax regime since that time. I am very proud of the fact that what the package delivers is entirely the policy United Future put to the electorate 2 years ago. We talked about reducing the company tax rate to 30c in the dollar. That is achieved. We talked about bringing in a research and development tax rebate regime at around 15 percent. That is achieved. We talked about the need to maintain competitiveness in our international tax regime, and, through the work being done with the forthcoming changes to the international regime, we can tick that off as achieved, as well. Although we can sit here and feel some satisfaction at our achievement, the really big gain is for New Zealanders, because all those gains represent wins for New Zealand workers, for their employers, and for the enterprises for which they dedicate their time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000389\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E One of the key objectives of the business tax review was to maintain competitiveness with Australia and to boost productivity in New Zealand. By moving to a rate of 30c in the dollar we match the Australian rate and we come close to the OECD weighted average. But, more important, we go ahead of the Australians, because we do not have the state taxes, the stamp duties, the capital gains taxes, and the other impositions that go on top of the federally imposed corporate tax regime in Australia. At the time we started to talk about comparability with Australia, some people asked: \u201CWhy limit your horizons?\u201D. It is very simple: 70 percent of New Zealand\u2019s business is with Australia. Australia is our major trading partner. If we can get a competitive advantage over Australia, then we are well placed to take on the rest of the world, and that is what the driver of that business tax review was. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000390\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EBut at the time we released the document, I think that potentially the most significant point came late in the document and was overlooked by many. That was the review of the international tax regime that we foreshadowed. A discussion paper was released last year. The Budget today makes it clear we are going to move to an active-passive regime for New Zealand income earned overseas. I want to explain that in a little more detail, because it is critically important. At the moment we tax all New Zealanders, businesses or otherwise, in New Zealand on their worldwide income. So a New Zealand company that may have a manufacturing plant in Shanghai, for instance, paying the local tax rate that may be equivalent to 10 percent in the dollar, is, under our current regime, taxed on that rate plus, then, the statutory rate in New Zealand. It makes no sense and it is a complete disincentive for those businesses to stay in New Zealand. Of course, they will want to relocate manufacturing plant offshore to be nearer to markets, but what we are having at the moment is that they are relocating the entire business because of the tax disadvantage. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000391\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003ESo the introduction of an active-passive test means that income earned actively overseas\u2014in this case through the manufacturing entity that I gave the example of\u2014can be offset against tax payable in New Zealand. That will even out a number of the discrepancies that are present at the moment. We have worked very closely with the business community. We have consulted widely with them, and we will continue to do so in the ongoing design and implementation of that package. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000392\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EIt is significant in most of the comment I have seen since the Budget that there has been very positive recognition of both the change in the company tax rate and the move to reform our international tax regime. It is rather absurd, when we look back on all the changes that have occurred since 1988 in the international economic environment\u2014the growth of free trade around the world and the opening up of various closed economies in the past\u2014to see that we are one of the few countries that maintain the same international tax regime today as in the days when the Soviet Union was alive, when the proverbial Polish shipyard was alive right through eastern Europe, when the growth of China had not started to explode, and when all the developments we have seen in recent years, and that we have been so keen to be part of, were incipient. So it makes common sense to change our rules now to get us up to play with everyone else\u2019s game. That is exactly what today\u2019s changes are all about, and I am very, very pleased to see those. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000393\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003ESimilarly\u2014and I refer to changes to research and development rules\u2014we have often prided ourselves on Kiwi ingenuity. We call it the No. 8 fencing wire mentality. In more recent times we talked about what originally was the Team New Zealand approach\u2014it then became the Weta Workshop approach\u2014of innovation, skill, and brilliant devising of new products by New Zealanders. Then we lament the fact that people say that it is too difficult to do business here and that they are going elsewhere because the regimes are more attractive. A 15 percent research and development scheme, in the way it has been outlined in the Budget, will give us the scope to retain a significant amount of that investment and opportunity in New Zealand and also to attract new investment in the research and development area. I think that is a very positive thing, not just for our image of New Zealanders but also for those young innovators coming forward who have skills, who have ideas, who want to work in New Zealand and make this country their base and their home, and who want to see this country benefit from the innovation they have to offer. So I am pleased for them, because this Budget and these moves represent a victory on their part, as well. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000394\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI refer now to the area of charitable donations. I hate to steal the Leader of the Opposition\u2019s thunder, but I have to tell him, in good truth, that the very day he made his first announcement was several hours after we had actually decided on the policy that is contained in the Budget. So although he is a little bit behind the eight ball, I welcome his support. It is one of those happy coincidences, and I assure the member that it is absolutely true.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000395\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002210ecb13f898149698979f4ff5251c9e5\u0022\u003ERodney Hide\u003C/span\u003E: Did it leak?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000396\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002267ab59861e624c4ca4c0af6b8de4a264\u0022\u003EHon PETER DUNNE\u003C/span\u003E: No, it did not leak. As far as I am aware he just happened to divine the same sort of thinking that we were working on. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000397\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EBut let us go through what it means. At the moment every New Zealander who makes a donation to a registered charity\u2014there are about 90,000 of these organisations in New Zealand, and we as individuals donate around $356 million to them each year\u2014gets a rebate of 33c in the dollar on the first $1,867. Under the proposals contained in this Budget, which will be law from 1 April next year, there will be no limit. That rebate will apply to every donation made, and it will apply to every donation made by a business, by a M\u0101ori authority, or by other corporate identities. So the total set of restrictions is being lifted and New Zealanders will be able to embark upon the development of a culture of giving, knowing that the State is there to support them in that endeavour. I think that is extraordinarily positive, not only for the generosity of New Zealanders\u2014for their sense of philanthropy\u2014but also for the role of the voluntary and charitable sector in New Zealand moving forward. I am delighted we have been able to deliver that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000398\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EBut it goes one step further. We are also investigating the introduction of payroll giving, which means that the deduction can be made at the point of payment. The employee simply notifies the employer of the charities he or she wishes to make the donation to, and the rebate will be payable instantly. That happens in other countries. I think the Australians have moved in that direction; the British certainly have. We are looking at the feasibility of legislation coming in next year to provide for payroll giving in New Zealand. So a complete new way of approaching charitable donations is on the way. The one area we need to do more work on\u2014and it was contained in the discussion paper; there is huge support for it, but we have to develop the mechanisms a little better\u2014is how we recognise the voluntary contribution of time. I give notice that that is on the agenda, as well. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000399\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003ETo sum up\u2014because I know, Mr Assistant Speaker, that you are going to call me to a halt very shortly\u2014this Budget, titled \u201CSaving and Investing\u201D, is a positive statement for the country\u2019s future. Its achievements, as far as United Future is concerned, show what a small party working constructively in Government in the MMP environment can achieve. In that sense, contrary to some of the doom I have heard, I think this Budget is a triumph for the politics of collaborative Government, where partners work together to achieve policy objectives within a coherent whole. I think New Zealanders will look with some satisfaction at the fact that we have been able to bring together a Budget that is as bold as this one is in so many different areas. That is why United Future is pleased to support it.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022 data-id=\u002295ab584dc7a74569b9172358130edc02\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000400\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002295ab584dc7a74569b9172358130edc02\u0022\u003ERODNEY HIDE (Leader\u2014ACT):\u003C/span\u003E The ACT party will not be voting for this Budget. We will not be abstaining on this Budget; we will be voting against this Budget. This Budget can be summarised as one of spend, spend, spend, and tax, tax, tax. It is another Michael Cullen Budget that has the same old policies, the same tired old policies, that he has trotted out Budget after Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000401\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EWhen Michael Cullen took office, he famously said that he would be judged, and his policies would be judged, on whether he achieved 4 percent real economic growth. Well, the judgment is in on that, I say to Dr Cullen, and those famous words should be his famous last words. The outlook in this Budget for the next 5 years\u2014and I am amazed that no one from the Government has talked about economic growth\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000402\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f9c81fdc642f449fa07ba2de74bcbafd\u0022\u003EHon Member\u003C/span\u003E: You will.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000403\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227ff10b83edd54b97a9e83ab53ae75395\u0022\u003ERODNEY HIDE\u003C/span\u003E: Well, I will not, actually. The outlook for the next 5 years is a paltry 2.3 percent increase in economic growth. That is only because in years 4 and 5 the Government is hoping the growth rate will pick up. In the next 3 years the outlook for New Zealand is an average growth rate of less than 2 percent per year. That compares with Australia, which is topping nearly 4 percent a year. So the outlook is for the gap between New Zealand and Australia to widen.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000404\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E We see again in this Budget from Michael Cullen no plan, no direction, and no strategic vision for New Zealand. The only thing this Budget guarantees is more spending, higher interest rates, and lower economic growth. In 2000, when Dr Michael Cullen took over as Minister of Finance, Government spending per year was $9,000 for every man, woman, and child in the country. So, for a household of four people, that amounted to $36,000 a year. That is what the Government spent, on average. Of course, we have to ask ourselves what that average family of four gets from the Government. Is it getting $36,000 worth of benefit? I do not think so. Well, now that spending is $13,000 a year per person, and in 2011 it will be $15,000 a year per person. Under Michael Cullen, core Government expenditure has increased by $20 billion, which is a 32 percent real increase, and it is set to go up over the next 3 years by another $9 billion. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000405\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EDo members know what is truly shocking about that increase? It is that Treasury itself says it can see no benefit from that extra spending. There has been no improvement in Government service, and every Kiwi knows that. In fact, the more money that has been thrown at Government departments, the poorer the service from them has been. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000406\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EWe hear that this Budget is about savings and investment. Well, the way to achieve savings and investment is to have more money in people\u2019s pockets and to have a higher economic growth rate. The way to achieve both of those is to cut taxes comprehensively across the board. There is the money to do that. That is what this Budget should be about. But, of course, the Labour Government is about spending money to win votes; it is not about managing the economy for the good of the country. That is why the ACT party says that we need, now, a tax payout rights bill that would put politicians on a constrained budget and hold the level of Government spending at where it is. And if politicians like Dr Cullen want to spend more money in real terms, then they should go to the people in a binding referendum. That is what the ACT party says we should be doing, so we can have some confidence that the size of the Government in the years ahead will not ever become bigger than it is now. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000407\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EYou know, Michael Cullen says that we cannot let people spend their own money, because that would be inflationary. Well, Milton Friedman got a Nobel Prize for explaining that the cause of inflation is monetary policy, not people actually working, earning, and spending their own money. Monetary policy is what causes inflation. So the idea that somehow allowing people to spend their own money is inflationary is totally wrong. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000408\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EOf course, we are all in favour of the cut in the company tax rate that has occurred, from 33 percent to 30 percent, but now we have widened the gap between the top personal tax rate and the company tax rate. Tax accountants will have a field day, and the other complications that have been introduced will complicate our tax code further. We should be aiming for a low flat tax across the board, without the exemptions that arise when, just because the Government has a policy that it wants people to follow and invest their money in, it thinks it therefore has to give them a tax break. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000409\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EHere is what a real Budget would do for New Zealand. It would drop the top rate of income tax across the board to 20c in the dollar. That would be a boost for investment and savings, and, indeed, for economic growth. We would hold Government spending, in the medium to long term, in real terms. We would deal to red tape with a regulatory responsibility bill. We would demand transparency and accountability from all Government departments through service-level agreements that would see departmental heads fired for any failure to deliver that. We would actually take the shares of the State-owned enterprises and distribute them to everyone. If the State-owned enterprises truly do belong to the people of New Zealand, let us see that. And we would take the Cullen fund\u2014a Government fund\u2014and distribute that money to everyone by putting it into their KiwiSaver account or into an education endowment, so that it is their money. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000410\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EWe have seen even more money go on health. And where are the benefits of that? There have been absolutely none. In fact, the one thing that the Labour Government has done in health is to actually deny us the opportunity to see the size of the waiting lists and to see the performance that is occurring. More money has gone in, but now we are not even getting the information that we used to get on the performance of the State health system. Why is that? Because it is woeful. We cannot achieve a better result from our health system by pouring in more money. If we could, it would actually be working now, because we have never seen an increase of money go into the health system like the increase we have seen under Labour. The way to fix the health system is the same as the way to fix everything else in the economy. It is not to run it like the Soviet Union used to run its economy; rather, it is to empower consumers\u2014empower New Zealanders through the provision of competition and choice by introducing the private sector into the delivery of health. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000411\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EThe key thing New Zealanders are looking for in a Budget is the direction that a Government is going to take. We see nothing in this Budget except a process of spend, spend, spend, and tax, tax, tax. The way to approach a Budget is to introduce a taxpayer rights bill and to hold Government expenditure in real terms. If politicians want to spend more of people\u2019s money, why do they not go and ask them to agree to that, by having a referendum on it? That is the ACT way. Thank you, Mr Assistant Speaker.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022 data-id=\u0022cc9634b3a1474bdc8b3c33f11b986b2d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000412\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022cc9634b3a1474bdc8b3c33f11b986b2d\u0022\u003EHon JIM ANDERTON (Leader\u2014Progressive):\u003C/span\u003E All I can say is that if Milton Friedman is the answer to New Zealand\u2019s economic problems, then I do not know what on earth the question was. I have to say to Mr Hide, if he is interested in the facts, that the economic growth gap between Australia and New Zealand has actually closed in the last 7 years, but as I do not think the facts will ever get in the way of Mr Hide\u2019s reactionary prejudice, I suppose it is a bit wasteful to give him those facts. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000413\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EAs leader of the Progressive Party and a coalition partner in this Government, I want to say to the House how proud I am of this Budget. I congratulate Michael Cullen on it and I look forward to this side of the House delivering many more Budgets. I am proud of the Budget because it turns its back on the selfishness and government-for-privilege that is the Opposition\u2019s only reason for being. I am proud of it because it is a Budget for all New Zealanders. I am proud because this Budget completes the decisive turn away from the disastrous policies of the 1980s and 1990s, to which the National Party Opposition would drag us back. Well, I am not even sure of what it would drag us back to, after hearing the speech from the leader of the National Party. I have not got a clue what its policy is, except that it would borrow a lot more money to pay for the groceries. That is all I heard. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000414\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EI am proud of this Budget because KiwiSaver will make a dramatic difference to the wealth of individual New Zealand households\u2014and the only one who seems to be in any doubt about that is Mr Key, the futures trader. I am proud of it because the business tax changes it introduced are the most sweeping in 20 years, and it is the most comprehensive measure to lift innovation and productivity since I have been in this House, which is now going on for 24 years. I am proud of it because it invests heavily in our present and future needs without worsening the stressed parts of our economy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000415\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003E I am proud of this Budget because it invests in infrastructure and builds the capacity a modern economy needs\u2014something that Governments successively in the 1980s and 1990s failed to do. I am proud of this Budget because it makes a deep investment in tertiary education and an investment in the needs and skills to demand higher incomes in a global economy. I am proud of the initiative the Budget takes in my portfolio areas\u2014in the primary sectors that form the backbone of our economy and in protecting vulnerable young people from suicide and drug abuse. I am proud of the Budget because it invests in better social services, in stronger health-care, and in education. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000416\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EI am proud of this Budget mostly because it is a Budget that is carefully shaped to fix New Zealand\u2019s problems, increasing our savings in a way that will last for generations, lifting our innovation, productivity, and exports, and investing in the infrastructure that we need. Every serious problem this Budget fixes is a problem that the National Party Opposition will ignore. We could have chosen a Budget, of course, that scratched the short-term itches\u2014the ad hoc and ultimately damaging approach to which the National Party is still addicted. We could have gone back to the past, to the destructive slash and burn of the 1980s and 1990s, as the National Party evidently still wants to do. But this Budget is much better than that. This Budget will make a difference to generations of New Zealanders. KiwiSaver is a historic scheme. I invite Mr English to say whether he would repeal the KiwiSaver scheme if he were ever elected to Government. Let us hear from Mr English about the real policy National would follow. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000417\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EThe expansion of KiwiSaver is one of the most important social programmes ever introduced into New Zealand. KiwiSaver is a very strong incentive to New Zealanders to save. It is a very strong incentive to keep New Zealanders of talent here to build for the future. The challenge for the Opposition is to say how it would create savings anywhere near as comprehensive as these. It could not and it would not, because it does not actually see the need for saving. We need to save more because not enough New Zealand households have enough saved to live in retirement in the way they do during their working life. What does the Opposition propose to do about that? Clearly, the answer is \u201Cnothing\u201D. It proposes to ignore our poor household savings rate because it stands only for people who already have ample savings and it does not care about the average New Zealand family. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000418\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EWhat is there about an incentive for a poorer family to earn three times more than what it saves in its savings account for its future in terms of buying a house or for retirement? It is an indictment that the National Party leader holds poor New Zealanders in contempt by thinking that they will not be able to count like that. Obviously he cannot count; they can. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000419\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EWe need to save more because we have a problem with interest rates and a high exchange rate. I am happy that New Zealanders feel that their household wealth is rising, and they are enjoying the use of better-quality cars, plasma TVs, and all the rest of it, but the inflationary pressure is burning our exporters. The high real interest rates are holding back our businesses. We need to move the pressure from household spending to household saving. Ever since the 1980s the current account was forecast to be repaired by exporting more. After all the pain we went through in the 1980s and 1990s, the end result is that the exporting share of GDP is more or less the same as it was. But the current account deficit is worse now than it ever was. We need to lift our exports and we are not going to reduce our current account deficit until we save more. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000420\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EThis Budget will make a difference to our exporters. It invests $80 million in export market development assistance. Is Mr English against that? It cuts the company tax rate. Is Mr English against that? I called for the business tax rate to be cut 3 years ago. I am glad I have had to wait only that length of time to see it brought to fruition, but I will not claim any credit for it. We will not go there. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000421\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222884619b1cc54df197827430ae38528a\u0022\u003EHon Trevor Mallard\u003C/span\u003E: Everyone else is\u2014why don\u2019t you?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000422\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220431165a2bf44060980b45c69f5a883b\u0022\u003EHon JIM ANDERTON\u003C/span\u003E: That is true. One reason that the cut will make a difference is if there is a substantial differential between the top personal and top corporate tax rate. That encourages business to leave more capital in the business to grow it, instead of taking the capital out in dividends. It makes sense to me. Everyone who is arguing now for the top personal tax rate to be cut as well as that, is actually arguing for less capital in our businesses. How will that help grow the New Zealand economy? Perhaps Mr English will tell us. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000423\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003ESo the question for the Opposition is this: what is the most important challenge for New Zealand? Is it cutting taxes? That would be mainly for those in the top income tax bracket. Anyone in this House who does not know that tax cuts benefit the most affluent New Zealanders does not have a faintest idea. Is this Budget about saving more, or is it about blowing the current account, increasing interest rates, and bashing exporters with a still higher exchange rate, which is every single bit of the policy I hear coming out of the National Party\u2014spend more, borrow more, save less, and invest less? Or is the Budget about saving more for investing in our future? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000424\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EThis Labour-Progressive Government is today making a $3 billion to $4 billion investment in innovation. Has the National Party ever heard that word? Does it have any understanding of what it means? This gives our businesses the tools they need to compete effectively and to make sure that New Zealand becomes a much more attractive place in which to invest in new enterprises for the benefit of all New Zealanders. It gives our infrastructure a shot in the arm. There has never been a time in the last 100 years when we have invested as much in new roads and new rail, and in this Budget we are now deepening further that pool of investment. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000425\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EThe only reason we are able to do that is the fiscal prudence that Michael Cullen has shown over the last 7 years to put us now in a position to deliver. The thought that a National Party might ever get into Government and, with profligacy, wipe out all of those advances is one of the most appalling thoughts I could have. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000426\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EWe are investing in our most important industries to future-proof them from the challenges they face, whether they be challenges in different markets, or problems down on the farm. In my primary sector portfolios this Budget strongly supports a pro-business approach to these industries. This Budget increases research and development in the primary sector. It increases research and development in the primary sector. It increases capability at the border to keep out organisms that can harm our biologically based economy. It funds initiatives to protect rural communities from adverse weather events and erosion, and it improves the environmental performance of the primary sector. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000427\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00228415e962-886d-47b9-9356-3fdce746891f\u0022\u003EThis is simply a landmark Budget. Saving and investment will build on our progress over the last 7 years. It will continue to transform New Zealand into a more dynamic and innovative economy. The Budget provides solutions to meet challenges we face today and tomorrow, and its social investment will allow New Zealand families to enjoy a better quality of life\u2014something this Government stands for absolutely. It strengthens our place in the world, it strengthens our economy, and it strengthens security for New Zealand. I strongly commend it to the House and I congratulate the Minister of Finance, who has delivered not only his best Budget but the most profound Budget for the future of this economy, and all New Zealanders should be proud of it.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022 data-id=\u00220c1e10bfcf654b7e956edcdeee4bb735\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000428\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00220c1e10bfcf654b7e956edcdeee4bb735\u0022\u003EHon TREVOR MALLARD (Minister for Economic Development):\u003C/span\u003E I move, That this debate be now adjourned. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000429\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EMotion agreed to.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000430\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u0022381640e8ce1643b6a8783154692bcc0e\u0022\u003EUrgency\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000432\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u002285c8d632d95f46bcbcb9bcbc0fc42e2d\u0022\u003EUrgency\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022 data-id=\u0022fce4790939a74e9097b2b91200b907f6\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000431\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022fce4790939a74e9097b2b91200b907f6\u0022\u003EHon Dr MICHAEL CULLEN (Leader of the House):\u003C/span\u003E I move, That urgency be accorded the introduction and passing of the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill and the introduction and first reading of the Taxation (Annual Rates, Business Taxation, KiwiSaver, and Remedial Matters) Bill. This motion is moved so that a range of Budget-related measures can be referred to the select committee as quickly as possible, and so that measures that come into force on 1 July can be passed as quickly as possible.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u002291116a39189447c198102513f61ea899\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That urgency be accorded.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 61\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 49; New Zealand First 7; United Future 2; Progressive 1; Independents: Copeland, Field.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 50\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 48; ACT New Zealand 2.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAbstentions 10\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EGreen Party 6; M\u0101ori Party 4.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EMotion agreed to.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022\u003EBills\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000433\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022dd27c696fc8a4540b3551d9145d566f6\u0022\u003ETaxation (KiwiSaver and Company Tax RateAmendments) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000434\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u00226c036b1d963d4fefa37dbbf4d7f660e6\u0022\u003EFirst Reading\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022 data-id=\u00225858d1947b2a4ca28085afc46058138a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000435\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00225858d1947b2a4ca28085afc46058138a\u0022\u003EHon PETER DUNNE (Minister of Revenue):\u003C/span\u003E I move, That the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill be now read a first time. This is the first of the two taxation bills to be tabled in the wake of Budget 2007. This bill focuses on tax changes that will assist to transform the economy and transform New Zealand savings culture. It complements the second bill, which will introduce other measures announced in the Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000436\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EAs part of the business tax reform package announced in the Budget, this bill provides for the reduction in the company tax rate from 33 percent to 30 percent from the beginning of the company\u2019s 2008-09 income year. This major change\u2014a product of the business tax review\u2014will help to increase New Zealand\u2019s international competitiveness, including with Australia. Aligning our company tax rate with that of Australia makes New Zealand more attractive internationally as a country in which to do business. It is estimated that the $2.1 billion cost to the revenue over 4 years will actually be an investment in New Zealand\u2019s future, because it will increase investment into New Zealand and boost New Zealand\u2019s capital stock, and that, in turn, will increase and boost labour productivity and wage rates. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000437\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe bill also makes changes to the uplift factors for calculating provisional tax to recognise these tax rate decreases. An associated tax rate change\u2014another to emerge from the business tax review\u2014is the reduction in the tax rate for certain savings vehicles from 33 percent to 30 percent from the beginning of their 2008-09 income year. As a result of that change, people who save through entities such as unit trusts and widely held superannuation and group investment funds will benefit from the new 30 percent rate that will apply to those funds. Likewise, many people who invest in managed funds that elect into the new portfolio investment entity tax rules will benefit from the reduction in the top tax rate from 33 percent to 30 percent. Less tax paid on income from these savings vehicles will mean faster accumulation of savings by individuals. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000438\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThis bill also gives effect to some of the major enhancements to the KiwiSaver scheme that were announced in the Budget. The changes build on to the KiwiSaver model in a way that greatly increases incentives for people to join and to continue to make contributions to KiwiSaver for the rest of their working lives. Under this bill, from 1 July people who save through KiwiSaver or a complying superannuation fund will be eligible for a new tax credit that matches their contributions of up to $20 per week. That means that if they save $20 a week through their fund they will receive an extra $1,040 a year in their account via the tax credit, and that will help them build up their financial assets faster. Employer contributions will not count for the purposes of this tax credit. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000439\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe second bill will provide for a credit for employer contributions to come into effect next year. Members of these funds who are entitled to the credit will not have to do anything to receive it; their scheme provider will claim the tax credit each year from Inland Revenue and simply credit the amount to members\u2019 accounts. Making it easier and more rewarding to save has benefits for all; it helps people to have greater financial security and a better retirement, and it helps to create a stronger economy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000440\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EFinally, as announced in March, the bill also introduces a number of amendments to the portfolio investment entity tax rules that will ensure the smooth introduction of KiwiSaver later this year. To help funds make the necessary changes to their systems in time, the technical changes in this bill focus on problems relating to the portfolio investment entity calculation. The changes are intended to ensure that KiwiSaver funds that are portfolio investment entities will be able to operate with certainty from the start up of the new rules. Given that the new scheme applies from 1 July, it is necessary to move swiftly, hence this bill being taken through all stages at this time. I commend it to the House.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022 data-id=\u0022d23e36d6fd3c413fb5c05a917f9586cd\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000441\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022d23e36d6fd3c413fb5c05a917f9586cd\u0022\u003EHon BILL ENGLISH (Deputy Leader\u2014National):\u003C/span\u003E In the brief time\u20146 minutes, I think\u2014that we have had to peruse the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill, National has decided that it will be opposing it. [Interruption] Yes, there is the trapdoor. [Interruption] I ask members to get over it. The problem with this bill reflects the larger problems of the Budget. We believe that this country needs a better balance of incentives for saving and incentives for growth. The growth forecasts in the Budget itself show just what the effect of 8 years of Labour in power actually is. Over the next 5 years they forecast that this economy will not grow faster than 2.5 percent, and over the next 3 years it will grow, on average, slower than 2.5 percent. So in that context, it does not matter how many savings are stacked away now, if the economy has not grown significantly in 20 or 30 years\u2019 time, when New Zealanders comes to realise the value of those savings, then their standard of living will simply be lower. It will simply be lower. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000442\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe other reason we will oppose this bill is not because we are totally opposed to incentives for savings\u2014that is not a bad idea\u2014but because of the dishonesty about who is going to pay for these incentives. Who is going to pay for these incentives? This bill is titled the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill and is meant to encompass aspects of the KiwiSaver announcements made today and aspects of the company tax rate announcements. In the end, there is only one group of people who will pay the bill for all of that\u2014the average New Zealand wage or salary earners and the lower-income self-employed. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000443\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe $20 tax credit that is coming from the Government comes from the taxpayers\u2019 pockets. It is their own incentive. Who is paying for it? The person who is paying for it is the taxpayer. That is the only place that the Government can get the money from. So it is a money-go-round, as my leader, John Key, said today. Who is going to pay for the compulsory employers\u2019 contribution? Well, the wage or salary earner is going to pay. If wage or salary earners opt into this version of KiwiSaver, they can forget about increases in their net pay for some years. The employer is going to say to them: \u201CYou opted in, so I have to contribute 1, 2, 3, and eventually 4 percent\u2014in pretty short order, actually\u2014so why are we going to have a wage increase on top of that to increase your net pay?\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000444\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EFor the average wage or salary earners sitting there today, the news is that the \u201Cchewing gum tax cut\u201D they were going to get has now gone. They were promised that two Budgets ago\u2014before the election. Labour was saying that it would give some grudging tax reduction, but today that promise is gone and it will not happen. The effect of that is that, because of inflation, people on the average wage who, in 2000, were paying 19 percent of income as tax, now pay 22 percent of income as tax. Their effective rate of taxation has risen\u2014it has risen\u2014and today they lost the chance for any tax reduction and I now get the news that they are going to be funding a tax credit to help them save. They are going to be funding a tax credit to help them save. They are going to be giving up increases in their net income. They are going to be giving up increases in their net income in order to fund the employers\u2019 contribution to the KiwiSaver.There is no new money coming into this system; the money can only come from the economy. It can only come from the pockets of the taxpayers who pay the tax. I think Dr Cullen should write legislation that is more honest. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000445\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe best insurance that this country can take out against future demographic challenges and retirement income is still a growing economy. It does not matter how those claims are accumulated; if there is no growing economy, then people cannot get much of value when they retire. Let us just remind ourselves that the KiwiSaver part of this bill is all about people putting money away until they reach 65. So the $20 per head that the Government puts in stays in there until a person is 65. I ask members to imagine they are part of a household that is struggling to deal with rising costs, facing rising interest rates\u2014[Interruption] Well, Dr Cullen is trying to tell people he will increase savings but not cut consumption. One of the first laws of economics is that savings are what one does not consume. So I want Dr Cullen to go out there and tell New Zealand that the $5 billion he is putting into this is not coming from reduced consumption\u2014because he knows that it is. The only way he can finance any of this is to cut the workers\u2019 pay. That is what he has to do\u2014cut the workers\u2019 pay. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000446\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ESome of those cuts, of course, are quite dodgy. That is, taxation increases because inflation pushes salaries up through the tax brackets. So he is cutting the workers\u2019 pay now by $1 billion per year in fiscal drag. That is one way he will finance it. The other way he will finance it is that when the workers go to the boss and say they want a pay rise, the boss will say: \u201CSorry, mate, Dr Cullen has already given it to you. It is sitting in your account. You\u2019ll get it when you\u2019re 65.\u201D\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000447\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022803002d1-e810-4bd8-b8e7-2e97d0d6f626\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c93ab6447e6f4eaa898928e47ff678a4\u0022\u003ESimon Power\u003C/span\u003E: Andrew Little knows that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000448\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220886101b804b463ba0832ac0d046622e\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: Andrew Little knows that. If he thought this was a great idea, he would be coming in here to get the political credit, but he is staying out there. So Dr Cullen\u2019s challenge is to explain to the households of New Zealand that this is what he is saying. The Government will keep spending up large\u2014$3.785 billion of new spending in this Budget\u2014so it can win the 2008 election with people\u2019s taxes, and it will cut New Zealanders\u2019 consumption and make them save in order to cure the inflation that he caused. That is the recipe. That is why 50 percent of New Zealanders will not take it up. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000449\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EHe has made it more attractive, but they just cannot afford it. After 8 years of a growing economy, nothing has come back to New Zealanders. What lies behind this bill is the fundamental problem with Labour. Dr Cullen imagines himself as engineering the economic outcomes for New Zealand. He is absolutely dismissive of the idea that any proceeds of growth should be allowed to be used by households, and that they should have any say at all over what happens about the future of this economy\u2014it is all him. Labour does not fundamentally trust the people of New Zealand. The effect of that is the worst growth outlook we have had for 15 years, and that is 5 years of 2\u00BD\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000450\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cada9fb8996c4a26b31bd39d2c945511\u0022\u003EHon Trevor Mallard\u003C/span\u003E: No way! Dear oh dear!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000451\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002284125355e0c64684882434a0b2ead001\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: Well, even in the depths of the recession in the 1990s it turned out that we got up to 4 to 5 percent growth. Now we have an economy that will grow at 2.3 percent, and that means that the gap between us and Australia will continue to widen. The income gap will continue to widen. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000452\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWe support some incentives for savings, but we also support a much better balance between a focus on savings for problems that will actually come up in 20 to 30 years, and a focus on growth in an economy that needs to yield higher incomes for New Zealand households so they can make their own choices, take their own opportunities, express their own innovations, and fulfil their own aspirations, all of which are increasingly different from those of the Labour Government.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022 data-id=\u0022916a27e878964db1ab84bd86529643c8\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000453\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022916a27e878964db1ab84bd86529643c8\u0022\u003EHon Dr MICHAEL CULLEN (Minister of Finance):\u003C/span\u003E That speech showed why that man led National to its worst ever election defeat in 2002\u201421 percent of the vote. That speech made Social Credit members look like orthodox economists. Let me take just a few things. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000454\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EBill English said we had the worst growth outlook in 15 years. This economy went into negative growth in 1998-99, when National was in power and unemployment was rising. He said we want a growing economy but we should not be trying to increase saving and investing. We have a 9 percent current account deficit, an 11 percent negative household saving rate, and we have a National Party finance spokesperson who says we should not be trying to cut the rate of growth and consumption but increasing it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000455\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EWhere did this mickey mouse man come from? Which bit of Nightcaps did he suddenly emerge out of, without realising that at the end of the day people have to earn what they are spending? If people want to grow, they have to save, and if they want to grow, they have to invest\u2014and people\u2019s behaviour has to be changed to achieve those things. But, no, the man who only 2 weeks ago said large-scale tax cuts at this point would be out of the question has now dropped into his leader\u2019s trap of saying it is the only thing that should be on the agenda. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000456\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EHe also told us that the workers\u2014the \u201Cwerkers\u201D, sorry\u2014will pay for their own tax incentive. But his leader said in his speech that it would cost the employers $2 billion a year. Well, which is it?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000457\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229cf2225ee11f43eca9b195169605ed47\u0022\u003EHon Member\u003C/span\u003E: Both.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000458\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022825f84294b5e487999f3fb55a5a72c6a\u0022\u003EHon Dr MICHAEL CULLEN\u003C/span\u003E: Oh, both. That was Lockwood Smith, who has it both ways at everything in life. He can actually have the tax incentive costing employers $2 billion a year, but somehow it is the workers paying for it. This is mickey mouse economics at its worst.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000459\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ffff76875c2543fbb9eefb73f6c0f8be\u0022\u003EHon Bill English\u003C/span\u003E: No, it isn\u2019t.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000460\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223b625a973a614c669a62c949fc4552fc\u0022\u003EHon Dr MICHAEL CULLEN\u003C/span\u003E: No it isn\u2019t? It is what goes down well in Nightcaps\u2014it is the kind of economics they run down there for the poor old member from Southland! When will he front up with some solutions around savings and investing? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000461\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ELet me take his leader\u2019s numbers\u2014$2 billion a year. That figure is actually completely impossible. He thought that everybody who is employed is in full-time employment. There are actually 1.35 million full-time equivalents in employment, and if 50 percent signed up, as Mr Key said, that would actually cost the employers $1.35 billion a year. But half of that is paid back straight away in the tax credits\u2014$670 million. One-third of what\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000462\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b48f260dee2e484d882f3f663f4ae9e6\u0022\u003EHon Bill English\u003C/span\u003E: What\u2019s the point of that?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000463\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e70005ee7a944b2f9b57125f1811a03f\u0022\u003EHon Dr MICHAEL CULLEN\u003C/span\u003E: The point of that is that John Key cannot add up, for a start, and his finance spokesperson is even worse: he was out by a factor of three. When one is a shoddy money trader, that stuff may do, but it does not do when one is trying to run a country, and when people\u2019s success in life depends on what one does. Borrow and hope went out of fashion 25 years ago, and Mr Key said today that he wanted to borrow more money\u2014that is what he actually said in this afternoon\u2019s speech. Then, if there was only a 0.5 percent moderation of wage demand in total over the next 4 years\u2014in total, not each year\u2014that $670 million would come down to a bit over $300 million a year. That is actually\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000464\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022130c3352cdab4070b2ee0cb2f1e0ec2e\u0022\u003EHon Bill English\u003C/span\u003E: Cut the workers\u2019 pay!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000465\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226d3b56f92aa7488182fc5c11fbee16d2\u0022\u003EHon Dr MICHAEL CULLEN\u003C/span\u003E: No, a 0.5 percent moderation in wage demands for a 4 percent contribution into superannuation is actually a pretty good deal. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000466\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EBill English\u2019s problem is that he has been on the parliamentary superannuation scheme for too long. He does not realise how it works out there in the real world for the average person who actually expects to save in order to increase his or her savings. The average person does not think there is a magic tap that gets turned on and savings come out of it. We have a finance spokesperson who thinks that with a current account deficit we should be increasing the rate of growth in consumption. What on earth is that supposed to be? It will not even sell out there in mickey mouse land, which he tries to appeal to. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000467\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EWhat do people say? Standard and Poor\u2019s says that this will maintain our triple A foreign currency rating, and, importantly, that the Budget includes measures to boost contributions to KiwiSaver to promote high savings. What does the New Zealand Exchange say? It says: \u201CThere\u2019s no doubt we\u2019re swimming in a global talent pool. Now employers will be able to contribute to their employees\u2019 savings in a low-cost, tax-efficient way, adding a degree of flexibility to structuring pay packages that will help them to attract and keep the best people,\u201D. This will actually help to keep the best people in New Zealand. He does not want to do that; he thinks that if people are given a five-bucks-a-week tax cut, then they will stay in New Zealand rather than go to Australia. That is what he is saying. No wonder his leader ripped up every page of the speech as he went along\u2014screwed it up and threw it away. That is all it was worth this afternoon as a speech in the House; it was so shallow that it was unbelievable, given the challenges facing this country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000468\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThe fact is that the member has fallen through the trapdoor I talked about a week or so ago. He is voting against a company tax rate reduction; the biggest\u2014and only\u2014tax rate change since 1988 under a Labour Government. For 9 long years National did not reduce the company tax rate and we now find out why: it is opposed to it. The National Party, the party of business, opposes a cut in the company tax rate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000469\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e50a976c9b33468ca3db78499ee879aa\u0022\u003EHon Bill English\u003C/span\u003E: We said it was a lower priority.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000470\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222b7d402b393d42aaac46f8599ac3a654\u0022\u003EHon Dr MICHAEL CULLEN\u003C/span\u003E: That sound members just heard was the sound of Bill English\u2019s neck being stretched as he fell through the trapdoor. No wonder his leader will not allow him to go on Close Up in order to debate with me tonight. His leader is going to go on instead, because he thinks that he is prettier and better than Bill English is. Well, he is half right in that respect. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000471\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EHe is going to vote against a tax credit that will add to KiwiSaver contributions and that will help lower-income people make the decision to save, because proportionately it is worth more to somebody on $25,000 per year than to someone on $50,000 per year or $100,000 per year. It is worth basically four times as much to somebody on $25,000 per year compared with somebody on $100,000 per year. It is a very good tax credit, because it will increase people\u2019s savings proportionately over the long term. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000472\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EOf course, the National Party does not want to see a more equal distribution of wealth over the long term. It does not want to see people more independent in retirement. It does not want to see people building up their own savings, just as Australians are building up their savings. No wonder it has got no answers to New Zealand\u2019s economic and social future. No wonder National members sat there like stunned mullets as they came in at 2 o\u2019clock wondering what to do about this Budget. It swept the ground out completely from under their feet. All they could do was come back and say that there should have been a personal tax cut. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000473\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMr English rejected a personal tax cut publicly on more than one occasion over the last few weeks; he knows it would make no sense at all. He knows that in a country with our savings and investment problems and with our current account deficit it would be madness to be feeding more demand into the New Zealand economy. He knows that it would keep interest rates higher for longer. He knows that it would keep the exchange rate higher for longer, as well.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000474\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002207dc4112-8a19-4dd6-a57c-878b47f8a9b6\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223660de9654f9473c9ddfcebf74974cda\u0022\u003ERon Mark\u003C/span\u003E: They\u2019re silent now.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000475\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f3e1e13e1e964d3fa46697cab92538e1\u0022\u003EHon Dr MICHAEL CULLEN\u003C/span\u003E: They are very, very silent now. He knows that it is economic nonsense, but for the sake of trying to make a cheap speech in the House this afternoon, he got up and somehow suggested that is what should be done. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000476\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EWe are going to have the National Party voting against a corporate tax rate cut, and voting against a tax credit for savers that helps those on modest incomes more. I say to National members: make my day; please do it. I ask them to please carry on opposing it for as long as they can all the way through tomorrow.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022 data-id=\u0022a21c518724924ff4852087a16ab92d53\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000477\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a21c518724924ff4852087a16ab92d53\u0022\u003EDr the Hon LOCKWOOD SMITH (National\u2014Rodney):\u003C/span\u003E We have just been listening to Dr Michael Cullen. We have heard all of that bitterness and all of that nastiness. I want to remind him that in 1990, when Labour was losing the plot\u2014the last time it was thrown out on its ear\u2014he spent money illegally. He was prepared to do anything to retain power. He was the Minister of Social Welfare in the Labour Government leading up to the 1990 election, and he illegally spent unappropriated money\u2014money that had not been appropriated by this Parliament\u2014to try to buy votes. Cullen and Goff\u2014Goff did the same thing in education spending. I know that, because I followed Goff as Minister of Education and I had to make legal the illegal spending of Phil Goff. And Jenny Shipley had to make legal the illegal spending of Michael Cullen. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000478\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EThe bitterness and vitriol that we heard in the House this afternoon was from Michael Cullen when he is losing. He does not know what to do. Economic growth is down to under 2 percent a year, yet inflationary pressures are so high that the Reserve Bank is putting interest rates up all of the time. The exchange rate is crippling exporters, and Dr Cullen does not know what to do about that. He has referred that issue to the Finance and Expenditure Committee. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000479\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EI want to refer to something highly relevant to this Taxation (KiwiSaver and Company Tax Rate Amendments) Bill that Dr Cullen said in his Budget speech just a little while ago. I think it is very pertinent. Dr Cullen said: \u201CThis Labour-led Government wants to see more people, not fewer, sharing in the wealth that we create.\u201D Dr Cullen thinks the Government creates the wealth in this country, and that his job is to share it out to everyone. He is so wrong\u2014so deluded\u2014about that. The Government does not create the wealth; hard-working New Zealanders create the wealth, and they are finding it harder and harder to do so under this Labour Government. It is a stunning statement from the treasurer that he thinks the Government creates the wealth. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000480\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EThe explanatory note of this bill says that one of the reasons why the Government is going ahead with all of these incentives around KiwiSaver and the other measures is to increase productivity and improve our international competitiveness. Productivity right now is a huge issue for this economy. When Dr Cullen and this Labour Government came into office, productivity in this country had been growing throughout much of the 1990s at 2 percent per year. In the time that Dr Cullen has been Minister of Finance in this country, the average productivity growth rate has dropped from 2 percent per year down to under 1 percent per year\u2014down to 0.7 percent per year. It is only one-third of what it was during the 1990s. Now the latest estimates on productivity growth in this country have it as being almost stalled. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000481\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EIf Dr Cullen thinks that this bill will suddenly turn around the massive decline in productivity that we have had under this Labour Government, then he is deluded. One of the reasons why productivity has collapsed in this country is that the Labour Government has brought in 2,000 extra pieces of regulation and legislation since it has been in office, and that makes it more expensive to do business in this country. Our productivity has fallen off because all the regulation means that an employer must employ a whole lot more people in order to get the same outputs. That, amongst other reasons, is why productivity has fallen off. This bill does nothing to address that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000482\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EAs I look at this bill and after hearing Dr Cullen\u2019s Budget speech this afternoon, I am reminded very much, with regard to this Labour Government, that Dr Cullen and Helen Clark think they know best. They will not trust Kiwis, by giving them back any of the hard-earned money that they earn\u2014oh no, this Government knows best. It thinks that big government is good for New Zealanders, because it does not trust New Zealanders to have more of their hard-earned money. So the Labour Government says that the only way people will get back any more of the money they earn is by putting money into its scheme\u2014the KiwiSaver scheme it has dreamt up. In fact, the \u201Cchewing gum\u201D tax cuts that were promised are gone. They are sacrificed because this Government, which knows best, is not prepared to give ordinary New Zealanders a chance to actually do what they think is best for them and their families. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000483\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EWe have the incentive of a $20 per week tax credit\u2014up to a bit over $1,000 per year\u2014if people do what Dr Cullen and Helen Clark dictate that they should do. What is very unfair about it is that the low to average wage earner will not get any benefit from that\u2014the very people whom the early Labour Governments genuinely represented before we had academics\u2014like Dr Cullen in Labour. They do not actually represent working-class people, at all. In the old days of Labour, it actually cared about low-income people. Today we have a measure that low-income people will not be able to get any benefit from, at all. How will someone who earns $20,000 or $25,000 a year, say, be able to put 4 percent of his or her income into the KiwiSaver scheme? How can people on $25,000 a year get the benefit of the tax credit by putting money into that scheme? They will not be able to. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000484\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EOnly some will benefit from the scheme\u2014and, when I say \u201Cbenefit\u201D, let us not forget that it is their own money that is being given back to them. It is a bit like the Labour Government\u2019s Working for Families package. The Government says it is giving families all that money, but the families earned it in the first place. It is all their money. They pay it in PAYE, the Government puts it into a great merry-go-round, and then the Government gives it back to them. Families have to apply for it, though. They have to go crawling to the Government to actually get it back. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000485\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003ENow, we have another merry-go-round. If people earn enough to be able to put money\u20144 percent of their earnings\u2014into the KiwiSaver scheme, the Government will give them some of their own money back. But, of course, it will give it back to them only once they are aged 65.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000486\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228a01a8c29a5d43c7bdffdbdad992a62d\u0022\u003EHon Trevor Mallard\u003C/span\u003E: Twice. Put a green one down and you get two on top of it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000487\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221a35751b209442feba0a0113f47e4193\u0022\u003EDr the Hon LOCKWOOD SMITH\u003C/span\u003E: I ask Trevor Mallard, who is interjecting, whether he honestly believes that low-income wage and salary earners\u2014those on $20,000 to $25,000 a year\u2014who pay 20 percent of their income in PAYE if they have no children, will be able to put 4 percent of their income into KiwiSaver.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000488\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a3a80356157c4cb9b144faad9d8f25fe\u0022\u003EHon Trevor Mallard\u003C/span\u003E: Yes, they will.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000489\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223e389122a32b4673a40e7414374f8436\u0022\u003EDr the Hon LOCKWOOD SMITH\u003C/span\u003E: Of course they will not. So they will get no benefit whatsoever. And what is worse is that not only will they get no benefit but, when they come to their annual wage negotiations, their bosses will say: \u201CUh-uh! The Government has already forced us to put money into its scheme, and there is no money to increase your pay.\u201D So the low-wage earners will miss out twice. They will miss out twice, because they will not get any pay increase. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000490\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003ELet us remember that when people do not get an increase, this Labour Government has a habit of calling that a cut. Members will recall Labour said that with regard to national superannuation. When the rate of increase was reduced in the late 1990s by not linking it to the movement in the average wage, Labour called that a cut. So if Labour members are honest, they will call this measure a measure to cut wages, as well. Low-income people will not get the same wage increases that they would otherwise have received, and they will not be able to put 4 percent of their incomes into the KiwiSaver scheme. They will not get the $20 a week tax credit, and they will hurt. They are hurting already. Working for Families does nothing for low-income people with no children, and what is more, they pay significant tax. At $25,000 a year of income, as I said, 20 percent goes in PAYE. Those low-income people have to pay a lot of tax. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000491\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EThis Budget does nothing for low-income people. Their costs have gone up very much in the last few years. The cost of housing has gone up hugely. This Budget does nothing, and this bill will do nothing, for the low-income New Zealanders whom Labour once used to believe in and used to support and help. It is little wonder that ordinary New Zealanders are leaving the Labour Party in droves.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022 data-id=\u0022634ab589768142a3892c802e0b560fc1\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000492\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022634ab589768142a3892c802e0b560fc1\u0022\u003ER DOUG WOOLERTON (NZ First):\u003C/span\u003E I would like to be a little bit more positive than the Hon Dr Lockwood Smith. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000493\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002286c6474f4f024ae4a436ac5ea4113865\u0022\u003EHon Trevor Mallard\u003C/span\u003E: It is \u201CDr the Hon Lockwood Smith.\u201D\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000494\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226ed2de4d1a3543d0a0b033ba483794f0\u0022\u003ER DOUG WOOLERTON\u003C/span\u003E: Dr the Hon\u2014is it that way round?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000495\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002210acf9cacd154c479094b1bef85342cf\u0022\u003EHon Trevor Mallard\u003C/span\u003E: That\u2019s the way he likes it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000496\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f12b5d47454d41ad84b623aa80920425\u0022\u003ER DOUG WOOLERTON\u003C/span\u003E: I would like to be more positive than him, anyway. I do not usually talk about my family, but I want to do so tonight, because I want to be positive. But before I do that, I want to say that I think taking the company tax rate down from 33c to 30c in the dollar is positive. I think it is long overdue. It is something that needed to be done in this country. Now it has been done, and I applaud the Government for doing it. New Zealand First would like to take the rate down further, but that is something for the future. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000497\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EAs we are talking about incentivised savings and tax cuts, I want to talk about the Working for Families package and how it affected my family. My youngest son, who is a hard-working funeral director, has a wife and two young children, the second of whom was born only a year ago. We were talking about Working for Families during the time his wife was unable to earn an income to help with the bills. At that point\u2014I am quoting from memory, and I am not as exact as some of my more financially learned colleagues\u2014I think, under National\u2019s tax cuts, I as an MP would receive something like $90 a week, and my son, with a newborn babe, would earn no income at all from tax cuts, or perhaps, at best, $5 a week. Under Working for Families, my son now receives something like $120 a week extra, and I\u2014and I do not believe I need anything\u2014receive nothing. I would like it, but I do not believe I need it. I think that is right, I think that is proper, and, more than any of that, I think that is just. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000498\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EWe are more than happy to see that sort of thing continue. It is a tax cut, it is targeted, and it is targeted at the people we want to encourage in this country. I go on talking about my son and say that if the KiwiSaver scheme, incentivised as it is with an employer contribution, will help him and my daughter-in-law, and my other family members, to save for their future, then I say it is fantastic and we are voting for it\u2014and we are. These things are of real interest, because I believe that at some point in life we do have enough. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000499\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EI know that people say one has to have more and more to invest more and more. I have three brothers\u2014I said I would talk about my family, and I hope they are not listening to this\u2014who are millionaires of substantial means. Good luck to them; they worked really, really hard and I am very, very proud of them. But I have to say that at this point in their lives, when they have that wealth, rather than entrepreneurial investors I see cautious people who are intent on retaining their wealth. I think that that is right and proper too. But members should not come into this House and say that tax savings for the rich will go into investment, because they will not, and they have not for anybody I have known in my lifetime. Tax cuts go into consumption. That is what this Budget is about. This Budget is about trying to cool an overheated economy without putting penalties on people, and I think that has been done in innovative ways and in ways that protect the future of families and people in this country. I applaud that, and New Zealand First applauds that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000500\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EI am not saying that wealth should be punished. I am not suggesting in any way that the seeking of wealth\u2014and I am saying this for my brothers, because they are all bigger than me\u2014should be inhibited. Hard work should be encouraged, and while I am talking about hard work I must say that I do not see my son, who is receiving money from Working for Families, working any less. I do not see that his drive to succeed is any less than it has ever been. In fact, I see just the opposite. He is able to go to work and give his skills, his sympathy, and his empathy to the people who need it without having to worry that he might have to go out and get another job or that his beloved wife will have to go out and work when she should be looking after that child in its first year, and things like that. We are not talking about losing incentives to work. I will always work. My sons work hard. My daughter works hard, and my brothers have worked hard, and because they have been, shall I say, perhaps more cautious than me and perhaps less profligate than me, they are commensurately wealthier, and God bless that fact. I do not deny them one cent of what they have. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000501\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EBut I think that when we retire into our corners and talk politically we should at some point admit that there is a crossover here between one side of politics and the other. I do not like to hear the bold statement that if one gives a young person a chance not to work, then those young people will not work. That is not true. By the same token, if one says that the rich should be stopped from getting richer, that is not true, either. It is also not true to say that the wealthier a person gets, the more that person will invest. I know from experience that that is sometimes true, but not always. New Zealand First is in favour of this bill. New Zealand First has long wanted to see company tax rates reduced and to see some incentives in the taxation system. This bill is a recognition that we need to catch up to other countries in that area. I applaud this bill.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002209278070-a54a-41e9-8a27-45166301277e\u0022 data-id=\u00224be9a9fd34f9474fa36cd4d243a06959\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000502\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00224be9a9fd34f9474fa36cd4d243a06959\u0022\u003EJEANETTE FITZSIMONS (Co-Leader\u2014Green):\u003C/span\u003E Probably only three or four people in this House\u2014if that\u2014have had the opportunity to read the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill. Therefore, all that the rest of us can do is reply to what the Minister Peter Dunne said in his introduction of the bill and to the explanatory note on the front of it. Nevertheless, the intention of the bill is reasonably clear. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000503\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EThe KiwiSaver-related tax credits are a very smart way to increase savings and to give tax cuts to those who save, while avoiding consumption-led inflation with all its evils\u2014pushing up the dollar and interest rates\u2014and ensuring that the benefits from those tax cuts are not captured by the very wealthy, which is what usually happens with a tax cut regime. The tax credits are also a clever way to get employers involved in matching the superannuation savings of their employees, with the sweetener that, initially, it is at no cost to them, and what cost there is will be partly subsidised forever. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000504\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003ESo far so good. I think the Greens will be able to support that idea. But let us look at who misses out. This scheme is not one that offers opportunities equally across all of society. First of all, anybody earning less than $500 a week will not achieve, with their 4 percent savings, the maximum subsidy that the Government is prepared to give. Anybody saving 4 percent of a less than $500-a-week income will receive less from the Government in these tax credits. That might be for a number of reasons. It might be that those people are on the minimum wage. Anybody who is on the minimum wage will not get the maximum tax credit from the Government. It might be because they are working part-time. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000505\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EI have not had the opportunity to see exactly what is stated in the bill about full-time and part-time workers. People might be working part-time for a variety of reasons. It might be that they cannot get full-time work. It is much more likely that they are trying to balance work with the needs of their children\u2014I think particularly of solo parents who have decided that they want to work while they bring up their children and not go on a benefit. Some parents do that and work very hard but they cannot work 40 hours a week, and if they are on a low income then they will not get the full tax credit. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000506\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EThere are those who, for whatever reason, are on a low income and simply cannot afford to save 4 percent of their income. Their employer might be topping it up so that they can still have some superannuation savings, but the employer\u2019s contribution will not be matched. Then of course there are those who are not working at all, who get absolutely nothing out of this scheme. People on invalids benefits, domestic purposes benefits, and unemployment benefits will get no tax credit at all. Working for Families started to drive quite a big wedge between those who are in employment and those who are not. That wedge will now get a whole lot bigger. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000507\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EThe KiwiSaver scheme means some people will have not only permanently low income during their working lives but much lower superannuation than others, when they retire, as well. I challenge the Minister Peter Dunne to tell the House at some stage in this debate how many people in New Zealand earn less than $500 a week\u2014if he knows\u2014and how many people will miss out on this scheme, even if they would like voluntarily to join it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000508\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EThe second issue I want to address is that of lowering the tax rate on managed funds or portfolio investment entities. At first sight that appears to be non-contentious and straightforward. It simply brings the tax on managed funds into line with business taxes generally. But when one looks at it, it is actually a disguised tax cut for people on the top tax rate. It works like this: the KiwiSaver legislation, as it stands now, passes through the tax rate of its investors. So for an investor in a managed fund, who is on a 19c tax rate, the fund pays 19c on that person\u2019s investment and the investor gets the benefit. But the KiwiSaver legislation does not pass through the tax rate of those investors who are on a 39c tax rate. A person on a 39c tax rate who invests in a managed fund is already getting a 6c tax advantage, in that the managed fund pays only 33c; now they will get a 9c advantage. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000509\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EThen there is the business tax cut. I have spoken a number of times before\u2014in the House and elsewhere\u2014of the missed opportunities to target some of this business tax cut towards investment in sustainability. That was a huge missed opportunity, because it was never part of the options that were discussed initially. It has another effect, as well, and I challenge the Minister to quantify it for us. A lot of that business tax cut will go to the overseas owners of the New Zealand economy; it will simply disappear from this country. I ask the Minister how great overseas ownership of the New Zealand economy is. There must be some figures on that. We can look at Telecom and all the banks, at most of the forestry industry and forest processing industry, and at all of our metal smelting\u2014and that is before getting down to medium and smaller-scale businesses. I am challenging the Minister to tell us\u2014I am working from memory here, because this has all been at such short notice\u2014how much of the $680 million that he says the lowering of the business tax rate will cost us will disappear straight overseas, with no benefit to the New Zealand economy or to New Zealand investors. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000510\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EThe second question is\u2014when businesses receive this tax cut\u2014what it will do to the amounts that they reinvest in productive enterprises, as distinct from what they pay out in dividends. Because most New Zealanders\u2019 investments are in their homes or in other housing, they need dividends from any investments they have in the share market\u2014housing, after all, costs them money. They are investing in housing in order to get a capital gain later on. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000511\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003ENew Zealand businesses tend to have a very high rate of paying out dividends rather than retaining earnings to reinvest in productive enterprise. I ask the Minister whether that will change and whether we will see any difference in the amount that is paid out in dividends. I understand that Telecom pays out 90 percent of its earnings in dividends. I ask the Minister whether we are really going to see the investment in productive capacity increase in New Zealand as a result of this tax cut. I think it is very unlikely. Those are the questions that the Minister needs to come back to the House and give us the answers to.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022 data-id=\u00224923c2759e8c44ca94ba7e3b40078338\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000512\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00224923c2759e8c44ca94ba7e3b40078338\u0022\u003ERODNEY HIDE (Leader\u2014ACT):\u003C/span\u003E Let me just respond to Jeanette Fitzsimons\u2019 point. Of course, if we cut taxes\u2014company rates and personal rates\u2014the question is whether we would see an investment back into New Zealand. What Jeanette Fitzsimons was thinking about was that we would get a higher dividend stream. That is quite right\u2014there is no guarantee that that dividend stream will then be invested back into New Zealand. But if we think about it for a minute, when people are making a decision about whether to invest in a company, or in particular whether to invest into a country, they are interested in the return they will get, balanced against the risk. If we cut taxes on the return from investing in a New Zealand company, we automatically boost that return. In that sense, we would not necessarily expect that people would be getting a higher dividend, but all around the world there would be a proportional higher investment back into New Zealand, simply because we have increased the return from investing in the country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000513\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003ESo I think we do know that, all things being equal, if we reduce the tax on companies, and drop taxes on capital, then we will see increased investment. That does not necessarily mean that a particular dividend stream that a particular shareholder gets will be returned to New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000514\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EI like the idea of cutting the company rate of tax from 33c to 30c.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000515\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022da0ab9bc191a4ecc95e318d230119419\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Are you going to vote for it, Rodney?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000516\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222038896b56db427b96332b75f67b349f\u0022\u003ERODNEY HIDE\u003C/span\u003E: I would like to vote for that bit, but I am afraid I cannot vote for this other stuff.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000517\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022947acf58e4544a02b171e61233582b5d\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Aw!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000518\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ca9406f1af5d4ec6a2d6d67377386d19\u0022\u003ERODNEY HIDE\u003C/span\u003E: I know that the member for Waimakariri is upset that I am not joining him on this particular occasion, but I have a problem with it. One of the things that concerns me is that people are actually voting for a pay cut for the people who will go into this scheme. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000519\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223db93f80b4f84504a6cbc7d85a8115ee\u0022\u003ER Doug Woolerton\u003C/span\u003E: What\u2019s that?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000520\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c18f79e9af204403b90b60ab1f49abd4\u0022\u003ERODNEY HIDE\u003C/span\u003E: It is a pay cut. What I want is a tax cut and a boost to people\u2019s pay, and Mr Woolerton is voting for people who go into this scheme to have a pay cut. How smart is that? What people think about when they get paid each week is what they get in their hand each week. If people enrol in this scheme, what they will get each week will be less. It will be less\u2014they will be getting it paid, but it will be paid into Michael Cullen\u2019s scheme. Then he is telling people that he will pay them if they put it into that scheme, but they will not be able to get it until they are 65. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000521\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EI think that it is quite a good thing that people save, but saving is not for everyone all through their lives. I pick up on what Mr Woolerton was saying about his son. It is probably not the smartest thing for him to be saving in an investment scheme right now. He would be better off investing in his business and paying off his mortgage. But what will happen under this scheme is that he will be denied the opportunity to invest in his business or pay off his mortgage. He will be encouraged to put money into the KiwiSaver and, as a consequence of his doing that, his take-home pay will be reduced. I do not know why this House is so cock-a-hoop about voting for a scheme that will reduce people\u2019s take-home pay. [Interruption] Mr Clarkson has a point.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000522\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022909c825c-6cf3-49bd-9c74-6df837480631\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bf9cdaa781834342b0fc221cd44cc308\u0022\u003EBob Clarkson\u003C/span\u003E: There\u2019s going to be a sliding benefit.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000523\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022073ebd3b98004c10a38f96b209f66e75\u0022\u003ERODNEY HIDE\u003C/span\u003E: I look forward to hearing about that too, because I tell Mr Clarkson that I am just a simple man, and what I see is a reduction in take-home pay. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000524\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EHere is another problem with this scheme. John Key and Bill English are quite right. This scheme is a money-go-round, and it does nothing to boost investment and saving in New Zealand\u2014nothing. It does nothing whatsoever, because it simply takes money that people have already earned and gives it back to them if they put it into the dopey KiwiSaver scheme. That is what it does. It is money they have already earned. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000525\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EIf we care about the future of New Zealand and about providing for our elderly into the future, the only way we can do that is to have a bigger economy. That is the only thing we can do. If we think about it, if our economy is just this size there is only this much for everyone\u2014it does not matter how much we have saved or invested. If our economy is only this size, that is what we have. However, if we have an economy twice as big in 30 years\u2019 time, we will have twice as much ability to provide for the elderly. That is where we should be focusing our attention. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000526\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EDr Cullen is right: it takes investment and saving\u2014in part\u2014to grow an economy. By the way, it is not guaranteed that if we invest and save, we will get a stronger economy. It depends on where we put it, and that is another key thing about this scheme. I think that if Doug Woolerton\u2019s son were to be left to his own devices, he would be better off taking his own money and investing it into his mortgage, his business, and into his family, rather than into a State-run superannuation scheme, particularly given that he has a young family. That is the point. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000527\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EInvestment and saving are important, but it has to be good investment and good saving. The other thing is that just letting people keep a little more of the money they earn if they save in a particular scheme does not actually generate any economic growth or prosperity. It would be far better to do this: cut taxes across the board and flatten taxes across the board. That would produce\u2014[Interruption] Mr Woolerton says that he has heard it before. I am pleased that he listens to my speeches, because he will hear it time and time again. The great thing is that in the 2009 Budget he will hear it, and it will actually be happening. If we cut taxes and have a flatter tax system, then we will get investment, we will get savings, and we will grow the economy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000528\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EI can tell Mr Woolerton that his son will be far better off when our economy is growing at 4 percent, 5 percent, and 6 percent in real terms, rather than at 2 percent in real terms. I can tell the M\u0101ori Party that M\u0101ori will be better off if they can keep more of their money, and they will be better off if the economy is growing at 4 percent, 5 percent, and 6 percent than when it is growing at 2 percent. All this bill does is to take what money we have and redistribute it slightly, and it says that we have to save it until we are 65. It does nothing\u2014nothing\u2014to boost the economic fortunes of our country. That is why I tell Mr Cosgrove that I am sorry, I know he is looking forward to the day that the ACT party joins him in a vote\u2014and I will tell him when that day will be; it will be when Labour returns to its glory days, when it actually stood up for the working person of New Zealand, actually stood up for the future of New Zealand, and when it actually had a vision for the people of New Zealand\u2014not this little Budget that tinkers around. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000529\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EIn this bill the Government says to working people that it has this scheme, that it is a savings scheme, and that it knows that people do not want to invest in it. The Government is saying that what it will do is rob some money from people and that it will give them some of it back if they put even more money into its scheme. That is the deal Michael Cullen is promising New Zealanders\u2014and Doug Woolerton is voting for a scheme that will reduce the take-home pay of New Zealanders. I do not get it. Thank you, Madam Assistant Speaker.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022 data-id=\u0022810077019de449d88c6871ed698a0c0e\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000530\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022810077019de449d88c6871ed698a0c0e\u0022\u003EHon CLAYTON COSGROVE (Associate Minister of Finance):\u003C/span\u003E With regard to the KiwiSaver scheme so derided by Rodney Hide, if we look back at history, we can see it has taken 30 years to get to Michael Cullen\u2019s scheme today. It has taken 30 years\u2014since 1976, I think it was\u2014to correct the biggest act of economic and social vandalism that was ever perpetrated in this country. That was when Rob Muldoon, the then National Prime Minister, rolled back and destroyed Norman Kirk\u2019s compulsory superannuation scheme, which had been introduced by the previous Labour Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000531\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002243bea6b641004db0834cf868de6ad91f\u0022\u003ERodney Hide\u003C/span\u003E: Roger Douglas\u2019s.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000532\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022853c31cba01048d080147701433cd421\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: Yes\u2014Mr Hide said \u201CRoger Douglas\u2019s.\u201D, so I must be fair to the member. Sir Roger Douglas was part of that. That is true; it is dead right. Also, Sir Roger Douglas, as patron of the ACT party, ran a mile when that member became its leader\u2014but we will get back to that later. However, the member is right; Sir Roger Douglas was part of the Norman Kirk scheme. The biggest act of economic and social vandalism perpetrated in this Parliament by a National Government has now taken 30 years to correct, and the KiwiSaver scheme begins to correct it today. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000533\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EIs it not interesting that this bill has the first corporate tax cut since 1988? I would ask Mr Hide who gave that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000534\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228e6dc6c2cec14846b0f00f3a4e673d01\u0022\u003ERodney Hide\u003C/span\u003E: Labour.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000535\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002256c50f9cf6b54224bd1cadf1843056de\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: Labour\u2014and who was the Minister of Finance, I would ask Mr Hide. It was Roger Douglas. Again, I say the cut was given under a Labour Government. I never thought that Rodney Hide would be a cheerleader for Labour, but he has proved he is today. It was not National that cut the corporate tax rate. It had 9 years to do so\u20149 long years\u2014and it did not. When was the last time that a National Government cut the corporate tax rate? I cannot remember the date, but I believe it was under \u201CKiwi Keith\u201D Holyoake in the 1960s. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000536\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThe National Opposition turns up today and tells the business community of New Zealand that it will vote against a 3 percent reduction in the corporate tax rate. Dr Cullen said that Bill English has fallen through the trapdoor. Bill English has fallen on his head, because what did Mr English say right through the election campaign? And what did the leader of the National Party at that time, Don Brash, and John Key say right through the election campaign? They said we should cut the corporate tax rate. What did National\u2019s leaders say up until a few weeks ago? John Key, of course, said we should cut the personal and corporate tax rates. Then, on 24 April of this year, on Morning Report, Bill English said: \u201Cand we would agree the last thing it\u201D\u2014it being the economy\u2014\u201Cwould need would be sweeping tax cuts\u201D. Then he comes in here and votes against the cut in the corporate tax rate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000537\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EEvery business person out there who has called for corporate tax rate cuts and who believed the National Party was in favour of business is sitting stunned tonight, as \u201CBarmy Bob\u201D Clarkson makes his contribution and confirms that National will not just vote against the corporate tax rate cut but vote against a measure in the KiwiSaver scheme that, as I have said, will correct 30 years of economic vandalism perpetrated by that party while in Government in 1976. The National members are very quiet over there on the Opposition benches. Mr Groser is very quiet. He may be one of the few intelligent people on that side of the House, because he knows his history. He may not know much about this House, but I give him this: he knows his history. And he ain\u2019t arguing, because he knows that is a fact. \u201CBarmy Bob\u201D is also history; we know that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000538\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI never thought I would say this in the House, but I say to National members that although I disagree with Mr Hide\u2019s contribution, it was a far more logical contribution\u2014a wrong contribution, but far more logical\u2014than anything we have heard from the National Party members. Do members know why? I will give Mr Hide this: he and I have had the odd rumble, but at least he is consistent. He is consistently wrong, but he is consistent; he is consistent in what he says and in the policies he believes in. The crew on the other side of the House\u2014the National Party members\u2014have flip-flopped on tax cuts. That is the most recent policy they have flip-flopped on: their flagship policy of tax cuts. Today, after saying we should have tax cuts\u2014after months and years of saying we should back business, and encourage innovation and investment, by cutting the corporate tax rate\u2014what are they doing? They are doing the biggest flip-flop since that mob has been in Opposition, because today Mr English confirmed National will vote against the cut in the corporate tax rate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000539\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EWell, I do not know what to say. Those guys are good. The problem is that they speak out of both sides of their mouths. John Key wanders around the country\u2014I would love to know what he will say tomorrow\u2014going into business houses, into chambers of commerce, and into manufacturers, saying the National members are in favour of a cut in the corporate tax rate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000540\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224fba6bedad1e4c92a4c8edfb4794bf57\u0022\u003EDarren Hughes\u003C/span\u003E: But they are going to vote against it in Parliament.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000541\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f1c090b65d3b4a268e179c28f8efd976\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: But they are going to vote against it in Parliament. So I look forward with relish to hearing what the chambers of commerce say about the National Party\u2019s position on business tax. I look forward with relish to hearing that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000542\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThere have been so many flip-flops. The National crew over there has a simple strategy. Anything this Government has done that is popular, it will adopt. Any policy it has had that is unpopular, it will drop. [Interruption] Oh, the National members do not like hearing that; Tweedledum and Tweedledumber over there do not like that. But they know it is true. What will the National members do before the next election? Here is a prediction: I reckon they will probably turn to my learned friend Peter Dunne and concede that he is absolutely damn right, and that the bill he proposes today to cut the corporate tax rate was right. They will do that on the eve of an election, to try to \u201Cme too\u201D the Government and our partners and get into power. That is what they will try. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000543\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EBut, you see, business people are smart. Business people go beyond reading the papers, to read what politicians and finance people say in this Parliament and what analysts say outside Parliament. They know about voodoo economics, and they know flip-flops when they see them. Mr English ruled out tax cuts as being inappropriate, after a year or two or three of ruling them in\u2014John Key said he would drop $7.2 billion in tax cuts on the country. The National members belittle the KiwiSaver scheme. When KiwiSaver is fully ramped up and fully implemented, a person on the projected full-time average wage in 2011 will need to save about $40 a week. The result will be that $100 a week, or $5,200 a year, will go into his or her KiwiSaver account. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000544\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003ENational members, of course, say we should scrap sustainable saving for people\u2019s retirement. They say we should give people a tax cut. Most of the people in my electorate would get about $5 or $10 a week from National\u2019s tax cut proposal. Although Mr Key, Mr Groser, and \u201CBarmy Bob\u201D over there would get $100 a week, most New Zealanders would get about $5 or $10 a week. What can someone do with $5 or $10? Not a lot. I stack up $5,200 a year\u2014with the Government contribution, the employer contribution, and the saver\u2019s contribution\u2014against the $5 or $10 a week that that motley crew over there, those indecisive champions of mediocrity and flip-flop, would give to most people. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000545\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003ENational members have told us to give a tax cut, and then they come into this House and confirm they will vote against a cut in the corporate tax rate. Well, I say today that the National Party has dived to new depths. Mr Foss is the man who knows about tax; he questioned the Finance and Expenditure Committee about his own tax return, of course\u2014that was his priority. He understands tax, especially his own tax return.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000546\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022740816aaf45746eba1847d78e75e27a9\u0022\u003ECraig Foss\u003C/span\u003E: I raise a point of order, Madam Speaker. I would like the member to withdraw that final remark about what happened at the Finance and Expenditure Committee, because it was not accurate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000547\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fae7af0d-c48d-4dd4-88f3-928ccaa3a984\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f4a38a2d2a2842a2a9cd93b9a95fbd0e\u0022\u003EThe ASSISTANT SPEAKER (Ann Hartley)\u003C/span\u003E: That really is a matter of debate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000548\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022840a3c45f2f4440b900dfab1cf9e1571\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: I wonder what Mr Foss, who has a reasonable understanding of tax, will say when he goes to the local corporates in his electorate. What will he say to them? How will he justify National\u2019s position of voting against a corporate tax rate cut, when it campaigned on the basis that it would give tax cuts? National campaigned on the basis that it would give tax cuts up until at least 24 April, when Bill English killed the policy off. What will Mr Foss say to the corporates? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000549\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThe one thing that has come out of this debate today is that the National Party members are all over the shop. I tell members that we have put our Budget on the Table; we have put a solid Budget and a plan on the Table. Did we hear one policy, one creative thought, one bit of initiative or innovation from the National Party? Not one thing! Well, ours is out. Our plan is on the deck; I ask the National members to give us theirs.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022 data-id=\u0022614a52b11dae41478923ce93b3d82e3e\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000550\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022614a52b11dae41478923ce93b3d82e3e\u0022\u003ETIM GROSER (National):\u003C/span\u003E The member Clayton Cosgrove has just challenged us to explain why we are not voting for the Taxation (KiwiSaver and Company Tax Rate) Amendment Bill. I will explain to the member exactly why. This country fundamentally needs a coherent approach to economic management. This bill, by the Government\u2019s own admission, is the centrepiece of its Budget strategy. Here we have this centrepiece of a Budget that continues a direction taken by this Government over the preceding seven Budgets. That is what we are voting on, and that is why we will not support it. We are not interested in a Budget where there is a titbit here or a titbit there in respect of John Key\u2019s excellent charities policies that Labour has just simply taken wholesale; we are not interested in that. We want a coherent approach to the economic management of this country. That is why National will not support this bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000551\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003ESitting suspended from 6 p.m. to 7.30 p.m.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000552\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022673c77a8348e42cb8b1d77536eb5a7ce\u0022\u003ETIM GROSER\u003C/span\u003E: The Government has challenged us to explain why we are voting against the bill. As I explained just prior to the break, we are not looking at just a bill, we are looking at a bill that the Government itself has described as the centrepiece of its economic strategy\u2014the centrepiece of its economic strategy. That is what we are voting against, and I will tell members why. I do not know quite what lies behind the political thinking in this Budget. What I can see is that it is a political accommodation to certain political pressures by a Minister of Finance who, for eight Budgets in a row now, has had a deep and abiding reluctance to face the facts of a huge and growing Budget surplus. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000553\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003EThis is actually a nip and tuck operation. Michael Cullen, the ultimate Budget surplus denier, faced with unmistakable evidence that he could no longer torture the statistics until they confessed, has had to own up to the reality that we have a Budget surplus. Essentially what the Minister of Finance has done is make a series of minimal concessions to those facts. What he has had to finally face up to is the fact that since he took the responsibility for economic management in this country the total tax take has gone up by $20 billion. The average wage or salary earner\u2019s tax bill has gone up by a little less than $2,500, and a little bit of nip and tuck has gone into this Budget bill. That is why we are opposed to it. What this country needs is a coherent strategy that addresses the fiscal realities of this country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000554\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003EThis is, as our party leader said, a money-go-round. What the Government is trying to ask us to do tonight is to give approval to this churn factor that will cause more and more of the taxpayers\u2019 own moneys to be recycled in various ways to very little positive effect. So instead of actually facing up to the underlying reality that has been building on the Minister of Finance over the course of the last eight Budgets for which he has had the awesome responsibility of managing this economy, he has done some minimal adjustments to accommodate some overriding pressures from the minor parties on whose support his very survival depends. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000555\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003EI do not know whether we are looking at the eighth and the last, or the eighth and the penultimate Budget in this sorry series; I do not think anyone knows that. The answer to that lies not so much directly in the hands of the New Zealand electorate but inside the minds of perhaps four or five increasingly nervous people in some of the minor parties as they assess the relative long-term damage to themselves of staying on board this ship. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000556\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003ESo that is essentially the political calculation that has happened. I think that beyond that we can also see the internal political calculation. Here is a Minister of Finance with a long\u2014and, I would have to say, very consistent\u2014track record of opposing tax cuts, and particularly a dislike of tax cuts for \u201Cthe rich\u201D and for companies. But he has actually been manoeuvred in a direction in which he does not really emotionally or psychologically want to go. So what has he done? He has given tax relief in the form of a reduction in the company tax rate with one hand, and he has taken off with the other hand, in order to finance the KiwiSaver subsidy scheme, a net $672 million\u2014$1.3 million gross, $672 million net. So we have here yet another example of the money-go-round approach of this Minister. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000557\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003EWhy does he have this reluctance to face up to fundamentals? Well, what we hear is not what I call a neo-Keynesian approach to economics, it is a Palaeolithic approach to Keynesian economics\u2014something that he learnt and perhaps I learnt 40 years ago, but some of us have just added a little to the sum of knowledge in those years. Faced with this Budget surplus he seems to think that the only issue in terms of inflation is the overall fiscal surplus or deficit. What he has never accepted is that when the Government makes real claims on real assets, it forces up prices, and when it forces up prices it leads to inflation tendencies, particularly in the non-tradable sector. That causes the Governor of the Reserve Bank to put up interest rates. That causes the exchange rate to rise. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000558\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003ESo when the Government bids up wages\u2014and we know that for the last 5 years, wage increases in this country have been led by the State sector\u2014that is a claim on real resources. When the Government fills Wellington with more and more bureaucrats, such that it is hard to find spare office rental accommodation in Wellington City, that is putting pressure on real asset prices. When the Government expands its core spending, often in poor-quality areas of spending, there are very few demonstrable outcomes for this extra spending. Take the $4 billion spending on public health and look at the results of that. That is putting pressure on real asset prices. But he has failed to understand that that is his responsibility to deal with, and now things are coming home to roost.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000559\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003EAnother Minister of Finance, not too far removed from us across the ditch, Mr Costello, yet again, using what is actually relatively more modest headroom for tax reform in Australia, initiated yet another series of a continuing process of tax reform. The economists of the Commonwealth Bank of Australia, in their analysis of that, put out the following statement: \u201CThere have been 13 significant tax cuts since the late 1970s. But history shows no clear correlation between those cuts, or the size of the cuts, and ensuing trends in consumer spending.\u201D If that was not enough, the OECD said just a few weeks ago to the Government: \u201CA clearer strategic direction for the tax system is needed to maximise living standards in the long term.\u201D If that was not enough, he should have listened at least to Tom Scott.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000560\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224ae5c43649e64212b1f0c5c56e2f76da\u0022\u003EHon Trevor Mallard\u003C/span\u003E: How can you listen to a cartoon?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000561\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227bf763bedaba401a979b55375dd04626\u0022\u003ETIM GROSER\u003C/span\u003E: Because there is some speaking inside the cartoon, mate. I have the cartoon in front of me, and it is a typical, very clever Tom Scott cartoon. It has a picture of Michael Cullen in the sandpit guarding the toys in the sandpit against any encroachment from others. The teacher writes: \u201CMichael is a very clever boy who needs to learn how to share. If not corrected soon it could affect his whole life.\u201D Well, ladies and gentlemen, it has affected the whole macroeconomic settings of this country over the last 8 years. But Michael Cullen is not prepared to listen to the OECD. He is not prepared to look at the Australian experience. He will not even follow the implicit advice of a cartoon. He has convinced himself, as a Budget surplus denier, to the point at which the evidence has accumulated beyond any reasonable stretch of imagination to where he has had to make some minimal adjustments. This churn factor, this money-go-round bill we are being asked to support, is not a coherent approach to New Zealand problems and that is the reason the National Party will not be supporting this bill.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022 data-id=\u0022eb0eb02263004c75abbf3dbf0f2fbb8a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000562\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022eb0eb02263004c75abbf3dbf0f2fbb8a\u0022\u003EHon TREVOR MALLARD (Minister for Economic Development):\u003C/span\u003E The people of New Zealand should know that that was John Hayes, the member for Wairarapa, and I am sure the people of the Wairarapa will be calling out for Georgina Beyer to come back to Parliament again. \u201CCome back, Georgina.\u201D, they are saying. John Hayes might have done good work at Bougainville, but he has done no good work in this Parliament at all.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000563\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002223de6bd3-0482-495d-88f4-7cc3f75d8442\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002236105b40c97e4cd782d33b792360e55b\u0022\u003ENathan Guy\u003C/span\u003E: I raise a point of order, Mr Speaker. The speaker should address the member by his correct name.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000564\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ed9ad81-05c1-4171-80c6-24fa02cade42\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b5c4df7e707f4a47a4035ace0f64d692\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: It was clear he was referring to the speaker who had just made his contribution, Tim Groser, and I am sure all members know who other members are.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000565\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022208aa983389f4b6ea17c73ddb2c5b5e2\u0022\u003ETim Groser\u003C/span\u003E: I raise a point of order, Mr Speaker. I do not find this at all upsetting. This is actually the fourth occasion. It is obviously a deliberate tactic. Just let it go. It does not worry me at all.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000566\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229502238c8aec467a82b40f939ee83699\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: I apologise to the member. There are a number of those new members around who have not really made an impression on Parliament yet, and if that is Mr Groser, I apologise. [Interruption] Sorry? I apologise to Mr Hayes as well, just to make it even-handed. [Interruption] That is right. To accuse Mr Hayes of making a speech like that would be a terrible thing to do. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000567\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002235a1997e4fca4b2c9c508c5002e21e35\u0022\u003EDarren Hughes\u003C/span\u003E: Hayes would be worse.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000568\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022be82ef92c98a481f8198a049875f5a53\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: Oh, no. He could not be worse than Groser. But what I think is really interesting is coming down and listening to the man who was paid excessively to go around the world for years and years as a public servant, and who now criticises their wages. He was one of the highest-paid public servants in the country. He got overseas allowances and put money in his pocket all over the place, but now he is attacking the public servants of Wellington. Well, I say that for someone who apparently wants to run for Wellington Central, not for Wairarapa, that is very, very sad indeed. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000569\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EThe next question I want to ask Mr Groser is whether he ever got a posting to Australia. Did he ever notice what happens in Australia? He does the comparators between New Zealand and Australia, but what will the net effect of KiwiSaver be on employers in New Zealand when fully implemented? There is debate about it\u2014it may be 1.1, 1.15, or 1.2 percent of salaries. And what does it cost in Australia?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000570\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221583b5cb-f4e0-4981-97ba-193c338ff404\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022dd647ae36e464fa19b5ff8e9e52ea729\u0022\u003EHon Marian Hobbs\u003C/span\u003E: 9 percent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000571\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002261081ad8be16462e8389b5245ee0871f\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: The figure is 9 percent. He says that firms will flee to Australia\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000572\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002289799fda3856411584871bc059ed66b5\u0022\u003EDarren Hughes\u003C/span\u003E: To pay more.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000573\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e779a481dc1449b19913d16db292c5a2\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E:\u2014to pay 8 percent more, and have capital gains tax\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000574\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224a8f94421519489a844ad39386d5ecfd\u0022\u003EDarren Hughes\u003C/span\u003E: And stamp duty.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000575\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022726a3cfa7f3d4155b75c77634d4882de\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E:\u2014and a few other things, and some local taxes as well. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000576\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EWell, generally public servants are good, but I have a feeling that as that member has come from the public service to the National Party, the average has improved in the public service. I am not sure about the National Party; that is something that is truly debatable in the House today. But what I could not believe in the House earlier was Bill English saying that the National Party will vote against the biggest cut in company tax rates since 1988. I know that politics is turning on its head and I know that the world is upside down, but how could the party of Holyoake, the party of Marshall, and the party of Brash vote against massive tax cuts for companies? Of course it could, but I can see Mike Williams doing the phone calls now. The donations will probably all be under $5,000 or $10,000, but companies will be saying that the National Party wants to reverse the tax cuts, and they will be running to the Labour Party. I tell members that I will be photocopying that Hansard\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000577\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221d4d453a904c4eedadccbe77630e7658\u0022\u003EHon Bill English\u003C/span\u003E: Big business has bought Labour\u2019s policy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000578\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002253730524b47f4e258e0f718e6f86e873\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E:\u2014and I will be sending it far and wide, I tell Bill English. Every employer in my electorate will get a copy of Bill English\u2019s speech, because he said that National members are against company tax cuts. You know, a bright party\u2014and even old Bob Clarkson knows this\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000579\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002282c05ca566a04a2da5196a62260d6d99\u0022\u003EDarren Hughes\u003C/span\u003E: Not bright enough.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000580\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220306b2d029354dbb84c0d215da59022d\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: No, he is bright enough to know that a bright party says: \u201CWe will oppose parts of this at the Committee stage. There are bits of it that we don\u2019t like. We can\u2019t work out which bits, but we will get through to there, identify the bits we are opposed to, and vote against it at the Committee stage, but we won\u2019t make tits of ourselves voting right through.\u201D There are good bits, even from a National Party perspective, in this bill. I think that the whole bill is excellent. I think that the bill is absolutely brilliant. I mean, \u201CTrapdoor Bill\u201D has the noose around his neck\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000581\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ed9ad81-05c1-4171-80c6-24fa02cade42\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c617099f204a4c0e9827a3cabcc7c5d1\u0022\u003EMr DEPUTY SPEAKER\u003C/span\u003E: Order!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000582\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b303ae2f656e435a990bd70003d4bd27\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: I mean that Mr English has the noose around his neck and his legs are dangling in the trapdoor, because he got caught. He opposed something when he did not know what was coming. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000583\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c22fba306e0f427c98be55873c0b73c0\u0022\u003EDarren Hughes\u003C/span\u003E: But he runs the strategy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000584\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e7540a6576814226855bbf9543a28678\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: No, he does not run the strategy. No, no, they have \u201CBright Gerry\u201D doing the strategy, or Murray McCully\u2014it is probably Murray McCully, actually, by the way they are going at the moment. I think it is a McCully approach\u2014you know, to build up a lead and blow it. He has done it four elections in a row now.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000585\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022605133aa-6c88-4150-82dd-7d9fcf1824b4\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002250cfafd7652940869e636447b121bf17\u0022\u003EHon Steve Maharey\u003C/span\u003E: He\u2019s a choker.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000586\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c3ddceb3b2794ef996e1782daf9acdf0\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: I really would not go into the detail of Mr McCully. But what is clear is that Mr McCully specialises, as National\u2019s strategist, in building up leads and blowing them\u2014and we can see it happening here now. It is just absolutely obvious, for anyone who has any experience in politics, when something is to be adopted. We know that John Key will cuddle up to KiwiSaver. We know it. We know that John Key will not take money off ordinary punters, who will get their money for KiwiSaver. We know he is not as stupid as that. So why does that party oppose it now, which will mean having to do a flip-flop? Why would anyone who is half rational not say: \u201COK, every now and again Labour has a good idea, assisted by Peter Dunne\u201D\u2014but not assisted by all of Peter Dunne\u2019s previous team\u2014\u201Cand Winston Peters. There is a good package here. Let\u2019s adopt it. Let\u2019s go for it and get it over with.\u201D But what do they do? They say traditional, old, Opposition crap: \u201CWe\u2019ll oppose it for the sake of opposing it.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000587\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224a793052c689428b8b41c02f2a344630\u0022\u003EDarren Hughes\u003C/span\u003E: The 1992 strategy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000588\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ff9a9217f0fc414f822420c20b27858e\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: Well, actually it is the 1999 strategy for the Labour Party policy\u2014the bits of it they should have adopted then. In 2005 they had a very, very similar strategy\u2014and they fell over. I am not going to complain. You know, Michael Cullen is approaching the mid-point of his career as Minister of Finance and if they want to take that sort of approach, it is something I absolutely welcome. But I would have thought that with the quality of education these days, the continuing education courses that people do, the political science that is available at universities around the country, and some of the wise old heads there\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000589\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022705be9a36b2f4820847f080027d5ddb7\u0022\u003EDarren Hughes\u003C/span\u003E: Like Lockwood Smith.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000590\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cba366c22ab1479ca416a9c133581b80\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: Well, no\u2014people who have gone. All they had to do was give Jim Bolger a ring. Jim Bolger would have given them advice. I rang him yesterday and got some advice. He is in Ireland. They could have given him a ring and said: \u201CJim, what should we do? You know, this is quite good. We don\u2019t want to damage ourselves. What should we do?\u201D. Any reasonable former leader\u2014any reasonable person\u2014would have said: \u201CIf you really agree with it, cuddle up quick. Don\u2019t let there be any divisions, and go for it. And for goodness\u2019 sake, don\u2019t get caught doing a flip-flop, because that\u2019s the fatal thing.\u201D\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000591\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022909c825c-6cf3-49bd-9c74-6df837480631\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f476a93d950e4db1b06e2ba550abddb6\u0022\u003EBob Clarkson\u003C/span\u003E: Like the Australians.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000592\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226352b0c6a3ff438796a751cb8cefac4f\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: Well, a flip-flop like Mr Clarkson on smacking, or puffing\u2014\u201CFlip-flop Bob\u201D! We know that he was against it, and now he is for it. I want to make one final comment on stadia. I want to put on the record that John Key was a stronger supporter of the waterfront stadium than I was. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022 data-id=\u00229f5557b83706427fbe53d88296cf477e\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000593\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00229f5557b83706427fbe53d88296cf477e\u0022\u003ECHRIS TREMAIN (National\u2014Napier):\u003C/span\u003E I rise to speak to the first reading of the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill. I would have welcomed this bill if the only thing in it was a reduction in company tax rates. But in fact this bill is a lamb with a wolf behind it. I would have welcomed this bill if it had just broken the company tax rate, but this bill does something else as well. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000594\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EI will be opposing this bill, for two reasons: firstly, businesses will be worse off, not better off, than they are now and, secondly, employees will not accept lower wage rises than they would otherwise get. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000595\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a3991ca3a0454e0f95832d6bcef4dcd2\u0022\u003EHon David Parker\u003C/span\u003E: How?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000596\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f70ef0be6aa54d77b303c965a50904dd\u0022\u003ECHRIS TREMAIN\u003C/span\u003E: I will explain that to Mr Parker. This is something that, together with across-the-board tax cuts, the National Party would welcome. But this business tax rate cut comes, as I said before, like a wolf in sheep\u2019s clothing. The wolf is Dr Cullen, and the sheep\u2019s clothing is today\u2019s Budget and this bill. This bill does not include just a company tax rate cut but it comes with a kick in the tail. That kick in the wolf\u2019s tail is the compulsory matching employer contributions to employee savings, and that kick is the reason that National will not be voting for this bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000597\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E Up front that measure looks good, and no doubt the spin on it will be fantastic. But here is a question for Labour, and particularly for those Labour members who have run businesses. Mr Parker would fall into that category. I ask Minister Parker what the single largest cost is for most businesses, particularly for service businesses. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000598\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f5d71749-ae91-4af7-b2bd-77260398912a\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002267d88ccf7be04f13af25aa8b9e99fe11\u0022\u003EHon David Parker\u003C/span\u003E: Labour.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000599\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b6105145e2c24cc6a1556f07dd71bc40\u0022\u003ECHRIS TREMAIN\u003C/span\u003E: It is the cost of labour. After materials, it is normally the cost of labour\u2014the cost of employees. In many businesses\u2014in fact, in most\u2014labour is the highest cost by a long shot. For most small to medium sized enterprises\u201486 percent of the businesses in this country have fewer than six employees, and 97 percent have fewer than 20 employees\u2014the cost of labour is the largest cost. I put it to that member that the cost of labour is often significantly higher than the bottom line of a business. That would be a fair comment. For most businesses, as I say, the cost of labour is higher than the profit of the business. For some it is not, but for most it is the biggest cost, and for the majority the cost of labour is larger than the bottom line, as I said previously. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000600\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003ELet me give members an example from the travel industry. I no longer have businesses in that game, but I do understand the figures\u2014I have a pretty good knowledge of that industry. In the travel business, the cost of labour is 40 percent. If one is making a profit, which not many businesses in the travel industry do, and if the bottom line is 10 percent, one is doing pretty well. Let me take a business that has a $250,000 turnover, with a wages cost of $100,000 and a possible net bottom line of $25,000. Under this bill, with a drop in the tax rate from 33 percent to 30 percent, we have a 3 percent saving. So with a bottom line of $25,000 that business, which would have paid $8,250 in tax, will now pay $7,500. That is a straight tax break of $750, which is good. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000601\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EI am a fair man in doing this calculation, so I will take out the credits that will be given back on the PAYE, and allow for the fact that there will be employees who do not take up the KiwiSaver scheme. So I will drop the cost of wages down to 50 percent of what I was talking about\u2014from $100,000 to $50,000. In year 1, a 1 percent contribution will cost that business $500. In year 2 it will be $1,000, in year 3 it will be $1,500, and in year 4 it will be $2,000. That is more than the tax saving that the business will make. That situation will apply to many, many businesses in this country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000602\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003ESo on the one hand, Labour is out there saying it is fantastic that there is a tax break\u2014a 3 percent drop\u2014but Labour members forget that the cost of labour is significantly higher than the bottom lines in most of our small businesses in this country. What will happen is that the poor old small-business person will be kicked.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000603\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220bfa5b74-8933-458a-99d4-bbd75d9898d0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a54ca3c8677d4066944c0494bb7b24c9\u0022\u003EChris Auchinvole\u003C/span\u003E: In the guts!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000604\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223a7f2ce6dae94b7fbc3918e0d6a42997\u0022\u003ECHRIS TREMAIN\u003C/span\u003E: He or she will be kicked in the guts. In fact, it is worse than that, because the contribution costs rise for the business\u2014to 4 percent over 4 years\u2014and what happens if businesses cannot pass that on to the consumer, which competitive businesses like service businesses cannot? That will erode the bottom line. So instead of having, as in the example I gave, a bottom line of $25,000, that will drop to $22,750. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000605\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EMembers should tell me how that improves the situation for small businesses in this country. It does not. This bill is a wolf in sheep\u2019s clothing, and that is why members on the Opposition side of the House will not be voting for it. Additional contributions on the key expenditure line could easily outspend the actual tax advantage on the bottom line, and that will be the case especially in service businesses. Members can do the numbers.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000606\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c732e459ced942ce82f4d83d1e3bed02\u0022\u003EDarren Hughes\u003C/span\u003E: Will you be saying that on Marine Parade?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000607\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022eb4f6f0c8f43455d886b6576329aab53\u0022\u003ECHRIS TREMAIN\u003C/span\u003E: I would certainly give this speech on Marine Parade. I ask the member to listen to this. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000608\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003ELabour says that the contributions by employers will be taken into account in future wage negotiations. That was in Dr Cullen\u2019s speech today. That is, if an employer pays a 1 percent contribution into an employee\u2019s superannuation, the employee will forgo that as part of the rest of the wage rise. Let me quote the Budget speech: \u201CThe Government expects\u201D\u2014members should note that word; it does not guarantee\u2014\u201Cthat the phase-in of the compulsory\u201D\u2014and take note of that word as well\u2014\u201Cmatching employer contributions will be taken into account in wage and salary bargaining as is the case\u201D\u2014this is great\u2014\u201Cin the current campaign by the Engineering, Printing, and Manufacturing Union.\u201D Guess what! When that campaign was being negotiated, was that contribution compulsory? No, it was not. But it will be compulsory from today, if this bill goes ahead. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000609\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EWhat happens in negotiation when something is compulsory? Suddenly it cannot be negotiated, can it? Here we see the wolf coming out from under the sheep\u2019s clothing yet again. Firstly, the Labour Government expects\u2014it thinks\u2014that there might be a phase-in and that employees will take a cut in their future wages, and that employers will not be worse off because of that. Secondly, the employer contribution will be compulsory. That makes a big difference when one is on the other side of the negotiating table. Mr Parker will know that, having negotiated wages before. When something is not compulsory, it is a bargaining chip, is it not? When something is not compulsory, it is a bargaining chip. When it is compulsory, it is a given and it cannot be used in a negotiation. The only reason that employer contributions are being taken into account in the current wage and salary bargaining campaign by the Engineering, Printing and Manufacturing Union is that the decision to allow the scheme right now is optional. It is optional, and because it is optional, it can be put on the negotiation table as something that can be negotiated. As soon as a superannuation contribution is compulsory, it is off the negotiation table. As I have said, as soon as that becomes compulsory, it comes straight off the negotiating table. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000610\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EThe other key point, which members on the Government side of the House\u2014or, in fact, any member of this House who has employed people\u2014should understand is the reality of life for people on low to medium wages. The reality is that every dollar they take home counts. So, firstly, Dr Cullen expects medium and low-paid workers to sacrifice 4 percent\u2014and that is not 4 percent of net income; it is 4 percent of gross income. It is 4 percent of net income, but it is taken off gross income, so it is about 5 or 6 percent. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000611\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220bfa5b74-8933-458a-99d4-bbd75d9898d0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002264b5565a6280485aa93c663febe2db2e\u0022\u003EChris Auchinvole\u003C/span\u003E: Say that again!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000612\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b0019a16b430430e8484ba72250fe614\u0022\u003ECHRIS TREMAIN\u003C/span\u003E: I am talking about medium to low-wage employees, who will be put in the situation of having deductions taken out of their wages but who cannot afford them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000613\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EThe Minister is trying to tell us that those employees will be happy to forgo future wage rises in lieu of the money being put into a scheme that will deliver something to them at the age of 65. I tell members that people will not like that. They are expected to do that while at the same time inflation, in the range of 3-plus percent per annum, is burning away at their spending power. What is worse is that employees have no chance of rising up through the marginal tax brackets. There are no changes to those in this Budget. The marginal tax brackets will stay the same and keep picking up more people. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000614\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EThe guts is that employees and unions will not accept the employer contribution and forgo wage rises for two reasons. Firstly, they will not be able to afford it, and, secondly, the employer contribution has become compulsory for employers, so it is off the negotiating table. Employers will not be able to use it as a bargaining chip. National will not be voting for this bill, because it is a wolf in sheep\u2019s clothing.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022 data-id=\u002281c72f923c694aeaa85b45ba46856428\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000615\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002281c72f923c694aeaa85b45ba46856428\u0022\u003ESHANE JONES (Labour):\u003C/span\u003E Kia ora an\u014D t\u0101tou. I rise to echo the remarks of the Deputy Prime Minister and Minister of Finance, because today is the inordinately important day on which we as a nation, through this document, address the deficits of our history, especially in savings. Up and down the country, people are already ringing members on this side of the House because they are realising that had we been tempted to adopt the confetti-based approach in relation to colourful, cheap, gimmicky give-aways, as that side of the House proposed to do, it would have disappeared in a puff of a Warehouse experience. They know that today, at the very time our birth rate as a nation increases, this Government is prepared to act boldly and invest in a future that not only our children but our mokopunas will look back to gladly, and celebrate the year that we were prepared to take the dividends of economic buoyancy and put them into deepening the wells of capital in our own economy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000616\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E Those people were not willing to follow the tasks or follow the route outlined by members of that side of the House who unwisely think that reacting to a Budget is an opportunity for indulging in minutiae. They unwisely think that members can come to this House and give flippant, trivial, ill-informed stories about tiny parcels of information that completely overlook what the country is really looking for. That is why this is a great day; there is an appetite, a thirst, and a hunger to address the issues of economic security in our families that lie at the root of the problem we have as an economy\u2014scarcity and paucity of capital. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000617\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003ELet us just recite recent history in terms of the Treasurer\u2019s efforts in this regard. Undoubtedly his legacy will be, firstly, the Cullen fund. A small economy with a relatively modest population has been prepared to build, step by step, on enlarging its capital reserves to deal with the inevitability of the flood of ageing that has already affected that side of the House, if not physiologically then certainly intellectually. Nowhere are we seeing it more brightly than in the member for Tauranga. In fact, we have been told by our M\u0101ori colleague here that people in Tauranga are wandering around, not with a headache but with a hangover. They curse the day they sent that man to Parliament. He boasted how he would come down, humiliate Winston Peters, and teach everyone else here a lesson on how the real world works. He sits over there and never says a single lucid, constructive, or memorable thing. In fact he joins Tony Ryall and a host of others who every time they throw foul rhetoric in this House the walls of this esteemed institution are smudged; that is all they have to offer. That, and these flights of fancy into minutiae, is all they have to offer. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000618\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EWhat exactly are we offering today to the happy workers, eager families, and very respectful providers of aged care? We are addressing what National refuses to do. We are dealing with the issues of security amongst those families who eke out an existence on pitifully low wages. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000619\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EWhat do National members say? They say that wages have grown too high, the public sector is too large, it has become bloated, and when they come in they are going to force it back down. That is why they will never be here on the Government side of the House. They will never, ever come back until they can match the quality of stewardship and the vision, because there is a massive appetite out there that we have tapped into. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000620\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EKiwiSaver started last year. It arrived at our committee and was addressed by some very\u2014well, some\u2014fine minds, with occasional inputs from my colleagues from the other side of the House. I will say one thing for John Key. At the end of the day, he heard what people had to say in the select committee and he realised that there was a well of massive support inside society for a savings scheme of this nature. After he had hung \u201CUncle Don\u201D upon the petard, which he constructed himself, he then began to ape and then don the garb that we have created. I will say that much for him\u2014he is adaptable, he is a chameleon, he is a plagiarist, and he will do anything to occupy the benches of power. But what is his remedy and what is the grand narrative he has for our nation? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000621\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EWhat have National members done over the last 4 or 5 years to obfuscate the fact that they have no grand narrative? No. 1 is that they have tried to chase everyone to Australia. No. 2 is that they have tried to pit M\u0101ori and P\u0101keh\u0101 against each other. No. 3 is that they constantly carry on about taxes. There is a clear choice. They should put their choice to the people. We have put ours in this document and we will meet all comers. On every single street corner we will be there, and by Jove it will be a fantastic debate because for the people of New Zealand there are remedies in this document\u2014clear remedies. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000622\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003ELet us talk about business tax. How on earth could a party that professes to be the friend of business not even have the presence of mind to at least acknowledge the overdue steps that our colleague Mr Dunne, Mr Treasurer, and Mr Peters have taken. They know that in a small economy, with a GDP of $160 billion there needs to be a private enterprise sector that is continuously buoyant, resilient, and that looks to the Government to provide through the tax system some useful incentives to enable them to keep more of that money to plough it into the business.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000623\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EThat is the very thing they talk about, profess to know about, and have the opportunity to vote for\u2014but no, they will not do that. So we have two of these massive planks\u2014business tax reform and KiwiSaver\u2014that will characterise the era when this party laid down, which we call in M\u0101ori the huarahi, the pathway, where the full benefits will be enjoyed by our mokopuna. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000624\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003ELet us go back to the pool of human capital\u2014the tertiary education sector. Fortunately Dr Cullen had already adumbrated during the last few weeks that we are continuing to invest in the tertiary sector. We do it in such a way that we remedy and redress the slights and the omissions of the 1990s\u2014a time when trade qualifications and those skills of practical application were almost wiped out. We do it through our tertiary education investments and\u2014of particular importance to me and my colleague in the M\u0101ori world\u2014ongoing investment into human capital. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000625\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003ESo what have we here? We have leadership and boldness prepared to invest well into the future, and economic capital we are continuing to grow in relation to tertiary education, which is human capital. We take it from the k\u014Dhungahunga, the very young and nimble, right through to adult students, the pakeke. That is a seamless, lifelong approach to learning, something that this Budget is willing to invest in. It is not the politics of divisiveness, it is not the politics of triviality, or of an obsession with minutiae. This approach reminds me that every time Mr Ryall rises he stands almost as if he is speaking with a set of latex gloves\u2014one can only imagine why he would need them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000626\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EThe final thing I point out about this Budget is that I look forward to the legislation associated with this grand vision we have laid out coming to our committee. I look forward to input from my colleagues who, no doubt, will join the fray to ensure that the legislation comes back to the House in as robust a form as possible after the theatrics, the predictable rhetoric, and the tired speeches of Mr Groser and others. If there was ever a reason why we have a current account deficit his speech tonight gave it. It is infrastructure\u2014we have covered all the bases\u2014it is physical capital, human capital, economic capital, and a tax system that will enable private enterprise to realise its full potential. This is a grand night for a grand Government that has put forward a grand vision. Kia ora t\u0101tou.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u0022edff4f330c5842d5802fd8dfd3b3523b\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill be now read a first time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 61\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 49; New Zealand First 7; United Future 2; Progressive 1; Independents: Copeland, Field.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 50\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 48; ACT New Zealand 2.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAbstentions 7\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EGreen Party 4; M\u0101ori Party 3.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EBill read a first time.\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022\u003EBills\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000627\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00223b2c73fd1d1646e3bb423130688fe4b9\u0022\u003ETaxation (Annual Rates, Business Taxation, KiwiSaver, and Remedial Matters) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000628\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u00228810d3909569468fb6b63e92e8a97450\u0022\u003EFirst Reading\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022 data-id=\u00220a45b377ea5649e698c74168fe65c392\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000629\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00220a45b377ea5649e698c74168fe65c392\u0022\u003EHon PETER DUNNE (Minister of Revenue):\u003C/span\u003E I move, That the Taxation (Annual Rates, Business Taxation, KiwiSaver, and Remedial Matters) Bill be now read a first time. Later I shall be recommending that this bill be referred to the Finance and Expenditure Committee for consideration. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000630\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThis omnibus bill\u2014the traditional May bill\u2014introduces major changes related to the announcements in today\u2019s Budget. These changes include the new research and development tax credit, changes resulting from the reduction in the company tax rate, provisions relating to employers\u2019 obligations in the employer tax credit under the enhanced KiwiSaver scheme, and increased tax incentives for people in companies to make charitable donations. The bill also introduces a number of other important tax changes, several of which have been announced over recent months. The chief of these changes is the liberalisation of tax penalties to promote voluntary compliance\u2014a reform that has met with widespread approval. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000631\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe companion bill, the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill, which was also tabled today and has just received its first reading, deals with the member side of the announced KiwiSaver enhancements and reduces the company tax rate from 33 percent to 30 percent. That bill also includes the associated reduction in the tax rate for certain savings vehicles and other changes that need to be enacted with urgency. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000632\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe legislation I am introducing now gives effect to business tax reforms that have resulted from the business tax review, which itself was a direct result of policy stipulated in the confidence and supply agreement between United Future and Labour, and between New Zealand First and Labour. Our requirement was for \u201Ca review of the current business taxation regimes with the view of ensuring the system works to give better incentives for productivity gains and improved competitiveness with Australia.\u201D The resulting business tax review set out to do just that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000633\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe first step was the release of a discussion document that canvassed views on possible business tax initiatives to increase our productivity and make us more competitive internationally. Amongst the options were reducing the company tax rate from 33 percent to 30 percent and the introduction of targeted tax credits. The discussion document was followed by further extensive consultation and policy development, the results of which appear in the two business tax reform measures that are featured in this bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000634\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe reduction of the company tax rate from 33 percent to 30 percent\u2014from the 2008-09 year\u2014aligns it with Australia\u2019s company tax rate. This reduction thus improves our competitiveness with our largest export market, as well as making New Zealand a more attractive country from which to do business. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000635\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThis bill introduces a number of transitional and consequential amendments that result from the new company tax rate, most of which concern imputation credit handling in the 2-year transitional period. Without this transitional period, some companies may not be fully able to distribute the profits and associated tax credits they derive before the new tax rate comes into effect. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000636\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe new research and development tax credit is a further measure to emerge from the business tax review. Introducing tax credits for other activities was also considered in the course of the review, but in the end we concluded that tax credits there would be less cost-effective than the existing mechanisms for funding areas such as export market development and skills training. On the other hand, there is a significant and growing body of evidence that tax incentives have been effective at boosting business research and development. So the tax credit for research and development will help to bring New Zealand more into line with what happens in other OECD countries, three-quarters of which already offer research and development incentives. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000637\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe aim of this new tax credit is to help raise the rate of private sector research and development investment in New Zealand, which is currently only a third of the OECD average. Increased research and development investment in turn is expected to have wider benefits for the economy and to help boost productivity and international competitiveness. Under the provisions, New Zealand businesses that conduct research and development in New Zealand will be eligible for a credit of 15 percent of allowable expenditure. The bill defines research and development relatively widely, in line with the definition that Australia uses for its research and development initiatives. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000638\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe research and development tax credit introduced in this bill has built-in safeguards to ensure that it is as effective as possible. For example, the requirement for research and development to be undertaken predominantly in New Zealand by New Zealand businesses is there because the spillover benefits to other New Zealand firms are likely to be largest in those circumstances. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000639\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe transformation of New Zealand\u2019s savings culture is closely related to economic transformation, both of which are major themes in today\u2019s Budget. Over the past few years we have seen major reforms aimed at both making it easier for people to save and improving the tax treatment of savings through collective investment vehicles. Legislation that was enacted last year paved the way for the introduction of KiwiSaver in July of this year. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000640\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EFurther legislation last year brought in new tax rules on investment income, one of the results of which is the new portfolio investment entity rules, and they come into effect in October. A key role of the new portfolio investment entity rules is to prevent the overtaxation of lower-income people who invest through managed funds, which are the first investment choice of many ordinary New Zealanders. They and similar funds are the vehicles through which KiwiSaver will operate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000641\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EIn this Budget the tax reform of the current savings environment continues, and it takes a giant step forward with the announcements contained both in the Budget today and followed up in this bill. What the bill does is to deal with the employer side of the enhancements to the KiwiSaver scheme. It requires employers to match their employees\u2019 contribution to KiwiSaver and complying superannuation funds up to 4 percent of employees\u2019 gross salary or wages, phased in over 4 years. Under the provisions of the bill there will also be reimbursement for employers for the cost of matching contributions through a new tax credit of up to $20 per week per employee. Employer contributions will remain tax-free under legislation enacted last year. The tax credit complements that which is introduced for members in the companion bill, which we have just been discussing. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000642\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EOther savings measures in this bill include changes allowing policyholders in unit-linked life insurance products to access some of the benefits of the new portfolio investment entity rules. We are also including changes to allow certain contributions to retirement schemes to be subject to a withholding tax rather than an income tax, so that the contributions are not taken into account for social assistance delivered through the tax system. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000643\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EAnother key plank in the United Future - Labour confidence and supply agreement was the development of a new tax rebate regime for charities, and the direct results of this commitment are found in this bill. People, companies, and M\u0101ori authorities will be able to claim rebates and deductions for charitable donations, up to the level of their annual net income, and will no longer be restricted by the present caps. Furthermore, the deduction claimable for donations made by companies will be extended to close companies that are not listed on a recognised stock exchange. These changes are designed to provide greater incentives for charitable giving, which in turn will benefit charitable organisations and all the communities they serve. I am very pleased that it has been possible to make these changes, which arise from the review that was undertaken last year. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000644\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EA further major reform introduced in this bill results in the relaxation of a whole range of tax penalties, such as that for taking an unacceptable tax position, so that penalties now reflect the seriousness of the offence. It is generally acknowledged that people comply more willingly with the law when they see that it is fair and reasonable. Our current system of tax penalties does not always distinguish between people who try to do the right thing and fail, and people who have no intention of doing the right thing, so reinstating that distinction is very important. There are also several other areas of the law where the rules are being clarified, and I think that they will be widely welcomed. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000645\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EOnce enacted, the changes in these areas will take effect from today, the date of the introduction of the bill. Related changes involve not penalising taxpayers who occasionally pay late, and updating the definition of \u201Ctax agent\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000646\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe reform has been the subject of extensive consultation and widespread approval. We have also made changes relating to the introduction of data matching between the Inland Revenue Department and the Customs Service, to enable us to better identify those with outstanding child support above a certain level who are seeking to enter or leave New Zealand. This is part of the consistent effort we are making to crack down on outstanding child support payments, and to ensure that those people who have a responsibility are able to meet it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000647\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EFinally, the bill deals with the consequences of adopting international financial reporting standards. That is a very technical area, but it is a very important one, and I think that will be welcomed. The bill of course, being an annual rates bill, also includes the income tax rates to apply for the 2007-08 tax year. Those measures that I have not been able to deal with in much detail tonight are covered in the accompanying commentary, a copy of which is being distributed to members. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000648\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI commend the Taxation (Annual Rates, Business Taxation, KiwiSaver, and Remedial Matters) Bill to the House.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022 data-id=\u00227847564c5da544459119b398d5899a2d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000649\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00227847564c5da544459119b398d5899a2d\u0022\u003EDr the Hon LOCKWOOD SMITH (National\u2014Rodney):\u003C/span\u003E Let me make it clear at the outset that National will be opposing the Taxation (Annual Rates Business Taxation KiwiSaver and Remedial Matters) Bill. This is important legislation, and it is just such a crying shame that this Government cannot bring in legislation that addresses some of these issues in a more appropriate way. The biggest problem facing the New Zealand economy right now is the fact that during a period when we are quite low in our economic growth phase\u2014we are towards the bottom of the economic cycle, if one likes\u2014our economy is growing at under 2 percent per year right now. Yet our capacity utilisation is high, and Dr Cullen cannot deny this. The Reserve Bank is deeply concerned about it. That is why it is having to raise interest rates, because we are in a position where we cannot get non-inflationary growth. That is a huge problem. It is growth that delivers wealth, but we cannot get the growth because at the moment our capacity utilisation is so high that we cannot get non-inflationary growth. The Government believes that this bill might improve that. Of course, the real issue is productivity or the lack of it. Our productivity growth is so disastrously poor and that is why we are not getting non-inflationary growth. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000650\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EMuch of Part 1 of this bill is about these new tax credits for research and development. The Government argues that this is great because this extra investment in research and development will improve our productivity\u2014at least that is what I presume is the theory behind it. But the problem is that if I look at what is in this bill I can see it actually damaging our productivity, because as businesses are forced to go through all the hoops they will have to go through to try to get these tax credits, productivity will actually suffer. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000651\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EWe have seen it all before around the world where Governments offer this kind of incentive. It reminds me of the European Common Agricultural Policy and how disastrous that subsidy scheme has been for productivity. Mr Assistant Speaker, I invite you to look at Part 1 and see what the Government defines as qualifying research and development. It has to be \u201Csystematic, investigative and experimental activities that seek to resolve scientific or technological uncertainty or that involve an appreciable element of novelty\u201D. How the hell does one define that in law? Of course, the Government tries to define it\u2014in dozens and dozens of pages. If one looks at clause 100 onwards, one sees dozens of pages in which it tries to define this stuff. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000652\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EWhat is extraordinary is that if one is spending money on buildings, for example, or tangible assets to deliver this novel research work, then one can actually claim the depreciation on those. But if one needs to acquire the intellectual property\u2014the intangible assets on which to build one\u2019s real-value research work\u2014one finds that that is excluded. As I read the legislation I find that expenditure on intangible assets is excluded. If the Government is serious about doing something about productivity, then it will realise that the whole set of provisions around these research and development tax credits will simply have businesses\u2014as they always do\u2014trying to see whether they can get a handout from the Government, and it will realise that the loss in productivity as they go through the whole paraphernalia of trying to actually qualify for these tax credits will all be unproductive activity. There will be the employment of people in unproductive work. I cannot believe that the Government has been convinced to go down this track when it is just going to be adding compliance costs, adding more regulation. I accept that Dr Cullen has had nothing to do with business.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000653\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b7f6382ccdd44310baeb709fffa5e3a2\u0022\u003EDarren Hughes\u003C/span\u003E: Well, he is giving them a tax cut. In the previous bill you voted against that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000654\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002285b4edad4ef74fc1a0c4c4a486b498fa\u0022\u003EDr the Hon LOCKWOOD SMITH\u003C/span\u003E: I ask the member whether Dr Cullen has ever run a business.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000655\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c0dbdc828d9441cfb54d5378cc50a9ba\u0022\u003EDarren Hughes\u003C/span\u003E: Well, he\u2019s cut taxes for them. He did it before; the member opposed it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000656\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221e9b959cbe0e44bb893974a13dcb433b\u0022\u003EDr the Hon LOCKWOOD SMITH\u003C/span\u003E: He has not, has he? He was a history lecturer. At least I still run a small business. But everything Dr Cullen does\u2014everything in this bill\u2014I have tried to comply with. As a small employer I have to comply with all this stuff. All I can tell Dr Cullen is that it all adds compliance cost and it is all more regulation. He has got to come to understand that excessive regulation is one of the major reasons why productivity growth has collapsed. The business sector of New Zealand has become overburdened with regulation, and for more and more cost there is no more output. That is why our level of productivity is collapsing. This bill is adding nothing to improving our productivity, because it will involve businesses in a whole lot more worthless work as they try to qualify for these tax credits. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000657\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EIn Part 1 of the bill there is also an interesting section on the Working for Families tax credits. This is hugely important stuff. Do you know what this part of the bill does, Mr Assistant Speaker? It changes the name of family assistance to Working for Families tax credits. It changes the name of family support to family tax credit. It changes the name of the in-work payment to in-work tax credit. It does not change the name of the parental tax credit, but it does change the name of family tax credit to minimum family tax credit. Is that not important stuff? That is hugely important stuff to bring into this House under urgency! But it shows the mindset of this Labour Government. It has no understanding of what productivity is about and no understanding of what is damaging this economy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000658\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EIf it wants to have a look at what is damaging the economy, then it should look at the effective marginal tax rates around that package of Working for Families tax credits. I say to Dr Cullen that when our effective marginal tax rates are up over 90 percent they have major disincentive impacts. No wonder a lot of women are no longer working extra hours when they get to keep 7c to 8c out of every extra dollar they earn! I say to Dr Cullen that it is not worth it. If he is concerned about productivity, then he should have a look at some of the fundamentals involved in this legislation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000659\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EI want to refer now to Part 3 of the bill, because it is Part 3 that brings in the provisions to actually require employers to now make contributions to the KiwiSaver scheme. The Government has argued that part of what will help employers to do this is the business tax cut. No one I have heard in this debate today since the Budget was presented has mentioned or pointed this fact out: a lot of New Zealand\u2019s businesses and employers, which employ most of our workers, are small employers. A lot of them are not corporates; they will not get the tax reduction for the corporates down from 33c to 30c, yet the small employers will have to pay out these compulsory contributions to this KiwiSaver scheme if their employees want it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000660\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EIt is quite clear that the tax credit available back to those employers will not cover the cost of their compulsory contributions. It is dead clear that it will not cover the costs. So what will happen is that our small employers will suffer yet higher costs under this regime. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000661\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EI cannot believe that this Government has no understanding of what it is like to run a small business\u2014no understanding at all. All this bill means is that the cost to small businesses will go up. A lot of them are not corporates; they will not get the benefit of tax reduction, but they will have to make these compulsory contributions, which are all set out here in Part 3 of this bill. No consideration has been given to the impact of this on the viability of our smaller businesses in New Zealand, which are so important to our economy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000662\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EFinally, I want to make this point about this KiwiSaver scheme and all the incentives around it. It will not do anything for middle to lower-paid New Zealanders. If Dr Cullen thinks that people on $20,000, $25,000, or $30,000 can put 4 percent of that into the KiwiSaver scheme when they face all the realities of trying to meet their costs of living today, he is deluded. So they will not get any of the benefits of those tax credits\u2014not even at age 65, which, of course, is when these tax credits are available to them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000663\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EIt is sad that as we debate the first reading of the bill, that it is ordinary, low-income, hard-working New Zealanders, who pay a significant hunk of our taxes if they do not happen to have any children, who will not get any benefit out of this, because they cannot afford to put 4 percent of their income into such a scheme. It is in fact higher-income earners who will benefit, just as it was with Labour\u2019s Working for Families package, cynically directed towards middle New Zealand to try to buy votes at the last election. That did nothing for low-income New Zealanders, and the KiwiSaver scheme will do nothing for low-wage earners.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022 data-id=\u002285222c5140e1425e8c53b7c8f7e281cf\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000664\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002285222c5140e1425e8c53b7c8f7e281cf\u0022\u003EHon Dr MICHAEL CULLEN (Minister of Finance):\u003C/span\u003E By the standards of Dr the Hon Lockwood Smith PhD, that anger was very mild indeed\u2014very, very mild. That is not surprising, because when National\u2019s leader, tie askew and unshaven, was asked on Close Up this evening what National would do about the KiwiSaver tax credits, we heard a kind of pause, which is unusual for Mr Key. He does not usually pause before he says anything. It was a long pause, and he said National would have to think carefully about them before the next election. When Mr English was asked on Checkpoint what National would do about the tax credits, he also said it would have to think about them before the next election.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000665\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002239eaae2a38f7454c94d949c986066a6b\u0022\u003EDarren Hughes\u003C/span\u003E: Hellfire and brimstone.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000666\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228f34ee908da34135a3fa862faa956690\u0022\u003EHon Dr MICHAEL CULLEN\u003C/span\u003E: Well, of course, Dr Lockwood Smith is incredibly staunch on this issue. He will oppose them\u2014until, of course, it is in his interests to support them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000667\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EDr Lockwood Smith tells us he has a sudden large interest in people on low incomes. Well, how will people on low incomes be helped to save, if not through a scheme whereby if they change their job, they are compulsorily enrolled and their deductions occur immediately, and, as long as they can continue to withstand that, they will get a proportionately larger tax incentive? I am sure that if National were designing a tax incentive for savings, we would get one that gave more to people like Dr the Hon Lockwood Smith PhD than to someone on $25,000. People will also get the employer contribution, which on a low income of $25,000 will be entirely paid for by the Government at a rate of 20 bucks a week, or 4 percent\u2014if he can do the maths and work it out. As a consequence of that, they will end up with three times their contributions going into their KiwiSaver account and the prospect of a substantially increased standard of living in retirement. But, more than that, they will be contributing to savings and to investment in New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000668\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EWe heard Mr Key on television tonight essentially say that the way to build the economy is to spend our way to prosperity, and that the way to spend our way to prosperity is to borrow the money to spend. It is true, of course, that Jackie Dean did have the answer at the last election. She said National would not need to borrow for tax cuts and would just get the money from overseas. That, I suppose, is a slightly more sophisticated approach to the problem. So what is National\u2019s answer? How do we grow the economy, when our gap between savings and investment is 9 percent of GDP and when we have to borrow $15 billion from offshore every year, just in order to maintain our current inadequate level of investment in economic growth? From a sort of \u201CBritish Indian army\u201D, what does Dr Lockwood Smith PhD tell us\u2014that the answer is to give somebody a $2 a week or a $3 a week tax cut? That is what National is actually offering to people on $25,000 a year. Well, that will go nowhere at all. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000669\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThen we heard from Dr Lockwood Smith that research and development tax credits do not work. Well, why the hell is Fonterra doing research in Melbourne? There is total silence. Maybe it is because the Australians offer tax credits and we do not. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000670\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMaybe it is time to learn some facts\u2014some pragmatic, simple bits of fact. We have been told for years\u2014and I used to believe this\u2014that we did not need tax incentives for saving. We were told that we just had to get the macroeconomic conditions right\u2014low inflation, blah, blah, blah\u2014and savings would go up. They have gone down. We cut the rate of superannuation and raised the age of eligibility, and savings went down. They were supposed to go up. Younger people do not believe that superannuation will be there for them, but they do not save. Dr Lockwood Smith has no answer to that, except to say that if we give them a $5-a-week tax cut, they might save it\u2014but, of course, they will not. They will not save it at that point, and he knows that. We know that we have one of the worst savings records in the developed world. National says that is all right. It says we will just borrow more so we can spend more, and in that way we will become more prosperous. That is National\u2019s economic policy, as explained by the unshaven, tie-askew Mr Key on television tonight. It would have been better to have Mr English on television; at least he looks clean-shaven and properly dressed at this particular moment. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000671\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThen we are told that research and development tax credits do not work, and I used to believe that too. We continue to have one of the worst private sector research and development records in the world, and Australia, which has research and development tax incentives, has a much better record than New Zealand on private sector research and development. We lose private sector research and development to Australia. Even Treasury has changed its mind on that issue. I have to tell Dr the Hon Lockwood Smith that he is the last person stuck in the 1980s paradigm. Treasury believes that research and development incentives will have spill-over benefits. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000672\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ETreasury, in a report that will be released tomorrow, agrees that savings are a major problem and that there is a role for the Government to play by intervening and providing support for savings. That is a sea change in Treasury\u2019s view of life, but it is a fact\u2014it is pragmatism. I suppose National members will now try to argue that I tell Treasury what to think. Well, I wish that were true on occasions. But it is certainly not actually true. Treasury is highly independent in the way it arrives at those kinds of views. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000673\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ESo the National Party members will be voting against research and development tax incentives. They voted against corporate tax rate cuts only half an hour ago. They voted against a tax credit for employees only half an hour ago.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000674\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002275bb450ecae943779c98106d996069b6\u0022\u003EHon Members\u003C/span\u003E: Employees?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000675\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225b507529796f4e3c9c3f3f4319067d80\u0022\u003EHon Dr MICHAEL CULLEN\u003C/span\u003E: Employees, not employers. Now they argue that compulsory contributions somehow will not work. Let us take a broader view than that. Let us stop this stupid \u201Clet\u2019s look this far in front of our face\u201D way of looking at the future of this country. Yes, compulsory contributions will cost employers a bit. How much will it be, at a 50 percent take-up rate? It will be 1 percent of the total wage and salary bill in 5 years\u2019 time. Already there are indications and expectations of some modesty in, but not nil, wage increases\u2014which is silly from Mr English\u2014and a reduction of 0.5 percent in total wage growth over the next 4 years would pay half the net cost to employers of the employer contribution. That is not $2 billion. On the basis of a 50 percent take-up it is about $670 million, and 0.5 percent moderation in wage growth, in total, over 4 years would pay half of that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000676\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EWhat do employers get? They get out of that greater employee loyalty. They get out of that a greater tie to New Zealand, particularly among our semi-skilled and skilled workers, as Australia has with its compulsory savings scheme. It will improve the supply of skilled labour, because we will lose fewer people. KiwiSaver, at that level, will lock more people into New Zealand. Employers also get out of that contribution a greater pool of savings and investment capital for New Zealand\u2014and National members are voting against all of that, which is in the long-term interest of business in New Zealand, because they are obsessed with tax cuts. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000677\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EI do not know whether the National members watched television tonight, but they better learn something. A sea change is going on as a result of this Budget already, and they are on the wrong side of the argument. They will have to change their position before the next election. That is easy for them to do, because they change every position they have. Every major initiative of this Labour Government is wrapped up, cuddled and kissed, and sweated to death by the National Party these days, and sooner or later this will be one of those. National members will not go into the next election promising to demolish KiwiSaver; I suspect they will promise to regularly update the employer contributions maximum tax credit. That will be where they will get to by the election. They will not go into the election promising to remove the research and development tax credits, will they? Well, why the hell are they voting against them now, then? That is very stupid. They will vote against something, and give me a free speech for the next 16 or 17 months in front of businesses. I can say to them: \u201CNational voted against a cut in the corporate tax rate. National voted against the research and development tax credits. National does not believe in updating Auckland\u2019s infrastructure and public transport system. National does not believe in increasing the pool of savings and investment in New Zealand.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000678\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EBut, come election time, there is one thing we can guarantee: the National members will flip-flop and flip-flop, and the changes will be there. It is a pathetic effort from a narrow, shallow, pathetic party.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022 data-id=\u00222df00faf644d454c9bbeaa91d48eb31d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000679\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222df00faf644d454c9bbeaa91d48eb31d\u0022\u003EHon BILL ENGLISH (Deputy Leader\u2014National):\u003C/span\u003E I do not recall Dr Cullen voting for any National Budget, even when he agreed with quite a lot in quite a few of them. What a pathetic effort by him to say that somehow his Budget is so compelling that the Opposition will join the Government in confidence in its programme.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000680\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227215a665881849f7811f568368526c14\u0022\u003EDarren Hughes\u003C/span\u003E: You will.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000681\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002282d1e5f5d0dd4fce9bf13a78199873fb\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: We will not, actually, because this Budget could have been miles better. If over the last 4 or 5 years Dr Cullen had not been so dog in the manger about reducing taxes, we could have had in this Budget\u2014and we will in 2009\u2014a much better balanced approach to how this economy should develop. We could have had a better balance between incentives to save, which are certainly an issue, and incentives for growth. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000682\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThis country is not retiring. There are a whole lot of 19 and 20-year-olds out there who do not think that the biggest problem with the economy is what will happen when they turn 65. This Budget is all about retirement. Between now and then we have to grow, because if the economy does not grow\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000683\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221452c142e0854df8a40da64f9e3ea40c\u0022\u003EDr the Hon Lockwood Smith\u003C/span\u003E: Labour is about to retire.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000684\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022671c7780baa94832b5c7254200683415\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: That is right. Dr Cullen is about to retire, which is why he is so interested in the scheme. If the economy is two-thirds the size it could have been, then it will not matter how many savings are in the bank; we will be two-thirds poorer than we should have been. That is why we have to have a more balanced approach. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000685\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EDr Cullen contradicted himself. For instance, he said that 0.5 percent reduction in wage growth will cover half the cost to employers of their contribution. Look, if the cost to wages is so small, then the savings cannot be big. If there is only a 1 percent moderation in wages and consumption, then there can be only a 1 percent increase in savings. Dr Cullen cannot have it both ways. If this scheme is to fix the current account deficit, and if it is to supply endless new capital for our investment markets, then it can come only at a cost to consumption. It can come only if the working people of New Zealand tighten their belts very tightly and cough up a lot of cash into these savings accounts. Dr Cullen cannot have it both ways. If there is a whole lot of new saving, in order to have a big impact on the economy, then it must mean that New Zealanders are going to have to cut their spending by a lot. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000686\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThat is why Dr Cullen is going to spend the next 6 months talking to businesses rather than to normal wage and salary earners. The message to wage and salary earners is that they must tighten their belts to save the economy while he goes on a giant spend-up in order for Labour to win the election. In the Budget today, Dr Cullen will spend $3.8 billion of new money. That is a much bigger new spend than in his previous few Budgets. His spending is going up, while he is telling everyone else that their spending has to go down. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000687\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EI would like Dr Cullen to sort out his strategy. If he is going to claim that this scheme will transform the economy, it can come only at a cost to spending by the working people of New Zealand. That is not called an economic identity. Savings are only what one does not consume. That is it\u2014savings are only what one does not consume. If one increases then the other shrinks. That is how the system works. I advise Dr Cullen to claim less. The most immediate impact of these measures will be that people who can afford to will now take their savings in very large quantity out of their bank accounts, sell their shares\u2014maybe even sell their house\u2014and put the money into KiwiSaver, to the extent that they get a tax break, and probably no more than that. The biggest single impact of these measures will be to shift savings. I am sure that Treasury has told Dr Cullen that. That is the first impact. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000688\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe second thing is that there will be some people on higher incomes who have been spending but who will save. Because they can save they will do so. That will make some small increase to savings\u2014and that will be it. You see, there is more to growing the economy than having savings. That is part of it; we need some savings because we need investment. But we also need an environment where we can make efficient allocation of that investment, where people have strong incentives to get ahead, where profitability is rewarded, where the infrastructure is unblocked and unplugged, where businesses feel like the Government is doing everything it can to keep them competitive, and where local bodies do not put up their rates by 10 percent per year. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000689\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EDr Cullen is talking as if the only thing we need for an economy is savings. He should go to Japan. Japan has the biggest savings in the world, yet it has had a 10-year recession. House prices have dropped by about 80 percent in Tokyo. Dr Cullen should go to Australia. Australia has had compulsory superannuation at 9 percent contribution. Its national savings rate is about 20 percent better than ours and much worse than in many other countries. Australia has a large current account deficit, with a much bigger savings scheme than this one. That is not to say that there is no merit in Dr Cullen\u2019s scheme, but it is to say that he is simply being misleading when he says that the answer to everything is more savings. The scheme may have some impact on incomes and returns\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000690\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223e544a4d0e7d4e40a45db7228d06cdae\u0022\u003EShane Jones\u003C/span\u003E: The people like it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000691\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ef0fe56783834e6489c71251127fce3b\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: People might like it, but we are talking here about a long-term view for the economy. It does not matter whether people have a big KiwiSaver account if, when they get to retirement, there is a small economy. They will be poorer. It is simple as that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000692\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EI would also like Dr Cullen to explain why he has decided to undermine the Cullen fund so soon. What does he think will happen? The public are going to ask why, when they now have an account that the Government is putting money into, the Government does not take the money it is putting into the Cullen fund and, instead, put that money into their accounts. [Interruption] Winston Peters has promoted that policy. He is going around telling people that that is what will happen. He has actively promoted that policy. We agreed with the Cullen fund. We signed the legislation. We have made the commitment. Why is Dr Cullen setting out to undermine the very policy he put in place? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000693\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe National Party is voting against this legislation, because there is nothing in it that provides the balance of policy to actually grow the economy. Dr Cullen is not providing a balance of policy to actually grow the economy. We also oppose Dr Cullen\u2019s view that this scheme will save the world. It may have some impact on national savings. If we look at these schemes all around the world\u2014and they have all been tried\u2014we see that they may make some difference, but there needs to be an economy\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000694\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c186d0a2-99f4-408b-9b4d-d484cf19724d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221b4eba76242f41ba82ed2b1498ea20c9\u0022\u003EHon Lianne Dalziel\u003C/span\u003E: What about Australia? Talk about Australia.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000695\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220e6ce08130d24488a0a14c857155742f\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: I talked about Australia to members before. Australia has a 6 percent GDP current account deficit. It has a national savings rate slightly better than ours, because everyone takes their savings and puts them into a tax-favoured system. That is why Dr Cullen\u2019s strategy is so unbalanced. Sure, he should take some action on savings, but he should balance that up with an economy in which someone who goes to work tomorrow knows that it is worth getting ahead, and an economy in which workers can keep more of their take-home pay. That is not about savings; that is about getting ahead. In the long run, most New Zealanders will be able to save if their incomes are higher. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000696\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E But in a low growth economy, such as this Budget is predicting, incomes will not go up rapidly\u2014they will not. People need their incomes to be rising. There is nothing in this Budget that says the Government is getting behind a dynamic economy that will raise people\u2019s incomes. The Government is getting behind savings; that is one component. But it is not the way to raise the growth of the economy all on its own. We look forward to the economic debate over the next few months, because National will be talking about a balanced approach, Labour has decided that it will tell everyone how to spend their money, and Kiwis will get to decide.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022 data-id=\u002219551526ca084a53b177150bae58c24e\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000697\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002219551526ca084a53b177150bae58c24e\u0022\u003ER DOUG WOOLERTON (NZ First):\u003C/span\u003E New Zealand First agrees with the Taxation (Annual Rates, Business Taxation, KiwiSaver, and Remedial Matters) Bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000698\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220bfa5b74-8933-458a-99d4-bbd75d9898d0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228ee7c41cb809414185b4b15072adfb31\u0022\u003EChris Auchinvole\u003C/span\u003E: Ah, ah!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000699\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c6138d8a3397498d8a3760eccfe104e4\u0022\u003ER DOUG WOOLERTON\u003C/span\u003E: I note that Mr Auchinvole has an \u201Cah\u201D stuck in his throat. If he has spent so much time going to elocution lessons, then he should have learnt to clear his throat silently, I would suggest. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000700\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003ENew Zealand First members are in favour of this bill. We applaud the Labour Government and, in particular, Dr Cullen\u2019s new-found pragmatism. We have long said that the Government should incentivise our economy through the tax system, and should listen to the market signals, which was a favourite call through the 1980s and 1990s. The market signals are telling us that something needs to be done to stimulate savings, to help our exporters, and to help our business people. Thank goodness that we see something actually happening here, and we think that is great. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000701\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EI do not intend to talk about the National Party particularly, but it is amazing to me how much the National members talk about Australia and about our wage relativity with Australia. The relativity between New Zealand wages and Australian wages fell more when National was in Government than at any other time. That was when wages fell and when the biggest wage gap opened up. It was all about markets, it was all about signals, it was all about being hands-off, and it was all about the market taking care of things, but basically it was all about ideology. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000702\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EIt amazes me that in this debate we are hearing the good old university lectures coming out from both sides of the House. We are hearing the ideology and all of the stuff that was learnt in various universities. If I myself was more learned, I could almost say this person learnt under a Keynesian model, or this person learnt his or her stuff at Harvard or at Oxford. To me, it is all bunkum, because what matters is what works. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000703\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EI say thank heavens that this present Labour Government has seen that the path New Zealand has taken in the past has not worked, and it is putting in place something that has been proven in other countries. It is not ideology. It does not fit the model of the university-trained people we are hearing from today, but we in New Zealand First believe that it will work and that it provides practical solutions to the problems besetting this country. We can no longer sit back and watch our research and development going to other countries. We can no longer sit back and see our businesses leaving our shores. Sure, we know that some businesses can never compete with the communist regime in China, which has low wages and pours heaps of money into research and development. Inevitably, we will lose some of those businesses, and that is sad. But we do not need to be losing as many businesses as we are, so New Zealand First supports what the Government is doing, and we applaud it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000704\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EWe also applaud the lift in tax credits for charitable donations right up to the net wage of the person making the donation. So if people want to give away more than they earn to charities, they will get a tax credit right up to their net income. I would make this suggestion to Bob Clarkson, who we know is immensely wealthy and has done a marvellous job in the community: he can now go out there and give away more than he earns, because he will get a tax credit right up to his net income. We look forward to his doing that. I know that he has been a good person in the community in which he lives, so I would be sure that even if none of his other colleagues supported this measure, he would support it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000705\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EIt is true that in this country we should not continually look to the Government. I applaud this Government for saying that there are other methods of having money move around and go to good causes. Some people who have done immensely well in this country are willing\u2014and I applaud Bob Clarkson because he has done this\u2014to give money to good causes in their community. They are prepared to give money to an organisation or a cause for no better reason than they believe in it. It is their money, and if they want to give it to a worthy cause, they should be able to get a tax deduction to the maximum effect out of that, and this bill allows that to happen. New Zealand First applauds that because we think it is wonderful. We know that the country that has the biggest, the brightest, and the greatest in this area is America, and it has a record of getting a huge benefit out of wealthy businessmen, because it is in their interests to donate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000706\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EI also think that if we can have our company tax rates and taxation laws aligned more with those of Australia\u2014and this bill does that\u2014that is a good thing. I would have to say that the thought of New Zealand and Australia having a common currency, let alone our having an Australian currency, would fill me with horror, because I think that ultimately it would be one step too far, as far as the sovereignty of this country\u2019s economy is concerned. But if we can line up more and more of our taxation\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000707\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a11ce4e-9fb3-4738-b0be-5a9f81d975da\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002204a71db75cf54e36bea9c9d7e90cf147\u0022\u003EHon Maurice Williamson\u003C/span\u003E: How come it worked in Europe?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000708\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e74abd7520d64a0f94d641478a9e28a0\u0022\u003ER DOUG WOOLERTON\u003C/span\u003E: The Euro?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000709\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a11ce4e-9fb3-4738-b0be-5a9f81d975da\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fa2f67d7b68a4fb6b813d6b7dbfdeb8f\u0022\u003EHon Maurice Williamson\u003C/span\u003E: But seriously\u2014Italy, France, Germany.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000710\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002280a5613692d3475d9f2b045752b459a8\u0022\u003ER DOUG WOOLERTON\u003C/span\u003E: Yeah, yeah, but that was a different deal. If we can line these things up more and more, I think that is beneficial to both countries. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000711\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EI cannot end without saying that we in New Zealand First\u2014and everybody knows this\u2014view with great concern the way in which our industries have been bought by mainly Australians but also other countries. By and large, they are buying them through savings funds from savings schemes. In the case of Australia, they are compulsory savings schemes, and in the case of America, they are its huge university funds and other funds like that. Those countries are getting the benefit of any lift in commodity prices, and the benefit of the hard work and initiative of our people, and we think that is wrong. New Zealand First thinks it is long overdue for New Zealand to start looking after itself, building up its own savings, and starting to do unto other countries as they have done unto us. New Zealand First wants to see our people buying industries in other countries and repatriating those funds to our country for the benefit of all our citizens.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002209278070-a54a-41e9-8a27-45166301277e\u0022 data-id=\u0022a1d2591dee5f4388869b0505d96da2a7\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000712\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a1d2591dee5f4388869b0505d96da2a7\u0022\u003EJEANETTE FITZSIMONS (Co-Leader\u2014Green):\u003C/span\u003E I will address three issues in respect of the Taxation (Annual Rates, Business Taxation, KiwiSaver, and Remedial Matters) Bill. The bill will require some careful scrutiny at select committee, given its size and the fact that we have not, of course, had any opportunity to read it in advance. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000713\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EThe first issue, which has not been much commented on tonight, is the lifting of the cap for tax deductibility of charitable donations. The Green Party has for some time argued that that cap should be much higher. We very much welcome the opportunity here to encourage greater generosity to charitable organisations, and we welcome the increased income that we hope charitable organisations will receive as a result of this. But we have to look at one or two things very carefully. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000714\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EThe first one is what the definition of a charity is and what it will become in the future. We have already had quite an argument, which has reached a sort of compromise position, where there was an attempt to exclude from charitable status any organisation that engaged in advocacy. That would have ruled out immediately all our environmental non-governmental organisations, unless, perhaps, they were picking up oily, tarred seabirds from the coast and nursing them back to health, or restoring a stream bank. Any organisation doing anything of the nature of the Environment and Conservation Organisations of New Zealand, the Royal Forest and Bird Protection Society, the World Wide Fund for Nature, or all the many others that are involved in trying to lead public opinion and advocate policy changes to Government would have been excluded under that proposal. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000715\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EA compromise was reached whereby advocacy is allowed, provided that it was not an organisation\u2019s main function. Nevertheless, I think it remains to be seen exactly how this will be interpreted in practice. I hope the Inland Revenue Department will not counter the reduction in revenue from the complete removal of the cap by clamping down very narrowly so that only those organisations that help fund ambulances at the bottom of cliffs are able to be charities and not those that are involved in working with society to try to build fences at the tops of cliffs. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000716\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EOf course, it is not just a question of what the definition of a charity currently is or how that might be interpreted. It is also a question of what that definition might become in the future if too many people get too generous and the Inland Revenue Department starts worrying about its loss of revenue. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000717\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EThe other question of definition is whether it will be possible to set up charities that comply technically, but that, in fact, may become a kind of tax shelter. It is a very big change indeed to go from a limit of $1,890 to a limit of one\u2019s entire salary, and I think it is a very sudden step to go that far. I am not sure that we are completely sure of just what the outcome will be. We will be looking very closely at that definition in the select committee. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000718\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EAlthough some charities very much welcome the raising of the cap, they are not sure they want it to go to 100 percent of income because of the risk that the State will see this measure as an opportunity for it to withdraw from much of the social service work that it does and leave it to private charities. That is another risk that we do not want to see eventuate. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000719\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003ESecondly, I want to talk about the tax credit for research and development\u2014another thing the Greens strongly support. We do need to lift our investment in research and development in this country very substantially, particularly in those technologies that will take us through the twin challenges of climate change and peak oil that will challenge our society very deeply over the next few years. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000720\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EBut again, there is the question of definitions. The bill states that the research must be \u201Csystematic, investigative, and experimental activities\u201D. I would ask what sort of legal definition we will have of those terms, and whether we are setting up a gravy train for lawyers to argue whether research and development qualifies. Of course, we have to define quite carefully what activities will qualify\u2014we are certainly not in favour of having no definition\u2014but I think it is important that we make sure in the select committee that the definition is robust, clear, and unambiguous so that we do not spend all year arguing in court about whether research and development investments qualify. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000721\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EThere is a set of exclusions for qualifying research and development\u2014for example, minerals exploration, social science research, market development, stylistic changes to products, and the routine collection of information. This is very proper; those things should be a normal part of what a business does and should not require any special tax incentives. But there is the opportunity for these excluded activities to come in through the back door if they are supportive of the matters mentioned in subsection (1)(a) of new section LH4, to be inserted into the Income Tax Act by clause 100(1) of the bill. I think that will also be a matter where there is considerable legal contention about what complies with the law, and we need to think about it very carefully. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000722\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EA third issue is the liberalisation of tax penalties. It is very sensible for the Inland Revenue Department to develop an attitude of voluntary compliance and to work along with taxpayers to encourage and assist them to get their returns in on time and to comply with the tax laws. But for those who do not comply, the penalties now seem extraordinarily light. I cannot imagine that Work and Income would ever treat a beneficiary in this way. I cannot imagine that beneficiaries who failed to comply with the requirements on them to the tune of up to $1.3 million would face a penalty of a mere $50. It seems that some people in society are to be given the benefit of the doubt in compliance matters much more than others. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000723\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EWe can see the same sort of attitude going through into the KiwiSaver tax credit scheme. Generally, we think the scheme is a good idea, with the one big exception being that it is increasing greatly the wedge being driven between those on benefits or extremely low incomes, and the rest of wage and salary earners. Not only do beneficiaries not get the child tax credit under Working for Families that all working people get but also they will not get the employer top-up of their savings scheme. They will not get the tax credit for savings. Beneficiaries with children do not receive the same State support that working people with children get, and because beneficiaries have less opportunity to save, they do not even get the top-up that goes with those savings. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000724\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209278070-a54a-41e9-8a27-45166301277e\u0022\u003EWe are already in a situation where we have a group of people at the bottom who are very deprived compared with the rest of society. A great mass has been lifted by measures like Working for Families\u2014and KiwiSaver will lift it again\u2014but some people are being left behind, and they are being left further and further behind as we go further down that track.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022 data-id=\u0022f3170e84a1ce4cad9585f256f6f79eed\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000725\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f3170e84a1ce4cad9585f256f6f79eed\u0022\u003ERODNEY HIDE (Leader\u2014ACT):\u003C/span\u003E I have to say there is something galling about being lectured to by the Labour Government about how we need to save more, when we see that this Budget is about spending $56,000 million in just 12 months. So we get lectured to about how we are not saving enough, and the country gets lectured to, but here is a Government that is spending $56 billion\u2014the equivalent of $13,000 for every man, woman, and child in New Zealand\u2014and the Government tells us we have to save. What is interesting about this Government spending is that it is not its own money it is spending. It is actually the money of the people of New Zealand that it is spending\u2014the same people whom the Government is banging up on saying that it is their fault there is inflation. Just to put it into context, core Government spending has increased $20 billion since 2000. I want to take members to a line in this Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000726\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002230199eee81714d4d9339a8127c1fc1d7\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Nice glasses, Rodney.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000727\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221dda54c2364a4f0b87fc4d61cf6aa3c0\u0022\u003ERODNEY HIDE\u003C/span\u003E: I thank the member; I got them in Christchurch, and they are very nice.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000728\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002202f374b80ceb40278216c97d500c3fc6\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Whereabouts? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000729\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229be2a289a3464febbbea23011db6936a\u0022\u003ERODNEY HIDE\u003C/span\u003E: From the optician on the corner of Hereford Street and Oxford Terrace.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000730\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f72f1d49654a41ba888f839d1922a3e3\u0022\u003EDarren Hughes\u003C/span\u003E: Did you get a pensioner discount?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000731\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a5707d40b7194e32a4b51e245852056e\u0022\u003ERODNEY HIDE\u003C/span\u003E: Well, actually, I did not. I wonder whether he gets a student discount whenever he goes shopping, and whether he still has to produce his ID. When Darren Hughes first turned up to Parliament it was embarrassing, and when Bellamy\u2019s asked for his ID he had to explain that he had been an MP for 3 years. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000732\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EI want to take members to a line\u2014[Interruption] Mr Cosgrove might learn something if he listened.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000733\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209a5b71a-ca7e-4e7c-9e09-f9e63f18aa12\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022288852c7354b4747a14218d346c0ef7e\u0022\u003EHon Annette King\u003C/span\u003E: Don\u2019t be jealous.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000734\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f1147872be014a29b1133e928f85a771\u0022\u003ERODNEY HIDE\u003C/span\u003E: There are many strong emotions I feel at times in this House, but jealousy of Mr Hughes has never been one of them. I am not even jealous of his youthful exuberance actually, because Darren Hughes is one of those interesting guys who is so young, yet seems so old at the same time. It is extraordinary. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000735\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EI want to take members to a line in the Executive Summary (B.2 and B.3) on page 162: \u201CForecast for future new spending\u201D. This is interesting. Dr Cullen said that he will be setting aside a \u201Cbit more spending\u201D for election year\u2014at a time when we have to be saving\u2014but I want to read out how much he is setting aside for extra spending.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000736\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220b937974b9cb41669ae5bf90795f9913\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Slowly, slowly!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000737\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002241832dfff8914cd29e77bb48c7c1e4c0\u0022\u003ERODNEY HIDE\u003C/span\u003E: I am sorry; yes, I have to wear glasses because the print is so small. The amount is $1,908 million. Let us call it $2 billion. So the Minister of Finance says we all have to save. He will compel employers to save and put that money into a superannuation account, and the Government will pay people $20 a week as savings. I ask Mr Groser how much he thinks they will save in the first year and how much they will save in the following year. I think the answer is not much, a few hundred million. If we allow for Ricardian equivalence\u2014I think Mr Cosgrove would like to know about this\u2014it will be even less. It may be $200 million in net terms, at best. In fact, Michael Cullen will be spending an extra $2 billion. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000738\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EThen we look at the forecast new spending for the following year and it is $3,838 million or, say, $4 billion. If we go to year 3 it is $5,786 million. For Mr Cosgrove\u2019s benefit, $1 billion is a stack of $100 bills a kilometre high. That is what $1 billion or $1,000 million looks like. We have a Government that will be spending about an extra $2 billion next year, an extra $4 billion the year after that, and an extra $6 billion the year after that. Who knows what on! Winning an election is what it is going to try to do. That money is going to be used to try to win an election, yet the Government is lecturing us about the virtues of saving! \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000739\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EIf the Government were interested in getting people to save, it is very simple. It would put more money into their pockets\u2014like tax cuts.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000740\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e1f6f2ff7a544ca390360b0b300c61c8\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: But they do not save it. They have not saved in the last 50 years.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000741\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ded11fb228304a43a0d941b77af059c6\u0022\u003ERODNEY HIDE\u003C/span\u003E: That\u2019s great! Mr Cosgrove is attacking the good people of Waimakariri because they do not save, yet he is part of a Government that has increased spending by $20 billion. I tell Mr Cosgrove that those people cannot afford to save, because\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000742\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fb0687ea3aed4cb18a283180203241de\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Rubbish!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000743\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d4c8660be078466083eb4b29c58e32fc\u0022\u003ERODNEY HIDE\u003C/span\u003E: He says \u201CRubbish!\u201D. Mr Cosgrove says that the people of Waimakariri can save and it is rubbish to say they cannot. Mr Cosgrove will not like this but he should get out more and start talking to some real New Zealanders whose wages have not kept pace with the costs imposed by this Government. Its outlook for growth is just 2.3 percent\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000744\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002221b1476af3854dd7b67b50d76db48cba\u0022\u003EHon Clayton Cosgrove\u003C/span\u003E: Krystal doesn\u2019t count, mate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000745\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224e215eb0ce63458c9dba60e16c81a2be\u0022\u003ERODNEY HIDE\u003C/span\u003E: I know that Mr Cosgrove is fixated about the fact that I went dancing. I know he is upset they never asked him. I know he is upset that he cannot get a date. But Mr Cosgrove should live in hope. One day I am sure he will get a date and someone might even go dancing with him. I know they did ask Mr Peters to go dancing. He mentioned that earlier. I was not going to be the first one to raise the matter, but Mr Peters said that when he was asked to go dancing he agreed. He actually agreed but he put a condition on it: that he could dance only with himself. They said: \u201CWe\u2019re sorry, Mr Peters, but that\u2019s not how dancing works.\u201D He said he was not prepared to share the stage with anyone else, so he did not turn up. What we have here\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000746\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209a5b71a-ca7e-4e7c-9e09-f9e63f18aa12\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f09bdf5df1004ff9bb706861a981b357\u0022\u003EHon Annette King\u003C/span\u003E: Have you had a date, given that you want Clayton to have a date?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000747\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d270ceb29ec54aacbc3a72c93e72661b\u0022\u003ERODNEY HIDE\u003C/span\u003E: The Minister of Police, across the floor of the House on Budget night, is trying to date me. How disgusting is that? Maybe 30 years ago it would have been on. I have to say: \u201CI\u2019m sorry; I love you to bits really, I love your personality, I love your sense of humour, but you and I aren\u2019t going dating. I can promise you that.\u201D I would go out with Darren Hughes before I would go out with Annette King, and that is saying something\u2014God Almighty! \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000748\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003EThe Labour Party is desperate for friends. We saw Michael Cullen get up in this House and plead with the National Party to vote for the Budget, and we can see why. We can see why Annette King is flaunting herself before me, because they want me to vote for the Budget. Well, I am sorry, but it is not going to work. Annette King cannot flaunt herself and get me to vote for this Budget. I promise her it is not going to work that way. But members can see why Labour wants the votes, because this is the first time in New Zealand\u2019s history that a minority of Parliament has voted for a Budget. That has never ever happened.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000749\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022362a07d08956420b869896a52cb1d2f3\u0022\u003EDarren Hughes\u003C/span\u003E: It won\u2019t happen tonight, either.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000750\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022176f630c8217466f9b113d19a2467af3\u0022\u003ERODNEY HIDE\u003C/span\u003E: Oh, it won\u2019t happen tonight?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000751\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022938d4ed0dee14649b62a7f641ff456a9\u0022\u003EDarren Hughes\u003C/span\u003E: No.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000752\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224bbc7448deae460fad652c9689599a59\u0022\u003ERODNEY HIDE\u003C/span\u003E: Well, I heard that it happened this afternoon\u2014absolutely. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000753\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022145839c7a4564f1c9d32cbf1946fd55c\u0022\u003EDarren Hughes\u003C/span\u003E: No.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000754\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bc1e9f65-e08b-4939-867c-22ef093e2a4e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022dbfc67b76ec54bd5a9e6aa1a71d7919f\u0022\u003ERODNEY HIDE\u003C/span\u003E: A minority of this Parliament voted for the Budget. The majority of this Parliament did not vote for the Budget. I can see why Annette is reaching out to me. Michael Cullen is reaching out in a caring MMP way to Bill English and John Key. Why? Because the Labour Party is losing its friends, it is losing its support\u2014[Interruption] In the case of Annette King, I wonder whether it is losing its mind. I really do. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022 data-id=\u0022319590e532df435fae44f4dd6c5c6436\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000755\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022319590e532df435fae44f4dd6c5c6436\u0022\u003ETE URUROA FLAVELL (M\u0101ori Party\u2014Waiariki):\u003C/span\u003E T\u0113n\u0101 koe, Madam Assistant Speaker. Kia ora t\u0101tou i te Whare t\u0113n\u0113i p\u014D. I, as a representative of the M\u0101ori Party, come to the House tonight confident, of course, that the grand total of 3 hours that we have had to consider the Taxation (Annual Rates, Business Taxation, KiwiSaver and Remedial Matters) Bill has been sufficient to analyse the mere 258 pages of the bill! All jokes aside, this is the big wash-up bill, which includes amongst other remedial matters, tax credits for research and development, tax credits for employers of up to $20 per employee, tax incentives for giving to charitable organisations, and a whole host of amendments to the income tax rates. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000756\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EThe initiatives on research and development and on skills training are going to be good for business, and we hope that the proposals will do something to address the state of emergency that the manufacturing sector has reported over recent weeks. This bill introduces tax credits for science and technology - based research and development conducted predominantly in New Zealand by New Zealand businesses. Of course, it is probably too late to prevent our iconic industry, Fisher and Paykel, from moving itself and its manufacturing operations to Thailand. It is unfortunate that Thailand pulled out all the stops\u2014offering tax breaks, and helping with training and other incentives\u2014while this Government, unfortunately, just waved its premier washing machine and clothes dryer manufacturing business offshore. We said at the time that the Government must do something to address a manufacturing strategy\u2014a strategy that will benefit those low-income workers who will be unlikely to be able to support the 4 percent contribution required for KiwiSaver. We remind the House this evening that the manufacturing sector is a major employer of M\u0101ori workers. In fact, some 32,900 M\u0101ori were employed in 2005, and another 23,200 Pasifika workers. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000757\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EOf course, the jury will be out in relation to whether the announcements are too late to stop Dynamic Controls, Click Clack, G L Bowron, and possibly Sleepyhead Manufacturing from being able to stay in the \u201Cland of milk and honey but not much money\u201D. We have all heard the warning signals about the exorbitant costs of retaining large-scale facilities, and employees, in Aotearoa, and we will be watching with interest to see whether these incentives will make much of the difference that is needed. We also know that there is a huge demand for research and development, which begs the question as to whether the $88 million injection announced today will respond to that. We have to wonder whether setting an entry point of $20,000 is just too high a threshold to really enable companies to enter into the scheme. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000758\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EWith regard to giving tax credits to employers, it begs the question of why we do not do away with all the red tape, and introduce tax cuts for those on low incomes. Although we support the intention of KiwiSaver to address our relatively low personal savings rate as a nation, we cannot avoid the fact that hardship is increasing. The level of social deprivation in Aotearoa is deplorable. It was only a few weeks ago that the OECD economic survey of New Zealand reported that our living standards have remained some 16 percent below the OECD median for some years now. I remind the House that New Zealand suffers from what economists Dr Susan St John and Dr Steve Poletti describe as \u201Can intractable child poverty problem\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000759\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EI was interested to read the release this afternoon from the Auckland chamber of commerce, in response to the Budget, in which the chief executive, Michael Barnett, said: \u201C\u2026 but to my mind our problems are urgent; we need to get beyond gradualism. If we are going to be an exceptional country and transform our economy, we need to do exceptional things that are transformational.\u201D It could be said that investment in research and development, compulsory employer contributions, and personal tax breaks of about $20 a week are steps towards getting the economy back in balance, but I ask: what about the greater society? How do we as a Parliament address the ever-growing gap between rich and poor? The social cost of being unexceptional is too high. The issues of economic insecurity that Mr Jones referred to earlier tonight will still remain long after urgency has been wound up and we all return home. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000760\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EI want to refer to the initiative to set a 5 percent deduction limit on donations made by companies and M\u0101ori authorities. Like many multifaceted bills, this bill has some good changes alongside some not-so-good changes, and this initiative is a good one that responds to our culture of giving\u2014the sense of manaakitanga that some 1.3 million people in Aotearoa represent through their dedicated commitment to the community and the voluntary sector. This bill introduces amendments that substantially increase the tax relief for donations of money made by individuals, companies, and M\u0101ori authorities to charitable organisations, including removing the M\u0101ori authority net deduction limit of 5 percent of an entity\u2019s net income. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000761\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EFinally, I refer to the confusing picture of changing names. In the current names we have family assistance, which now becomes Working for Families tax credits. Family support becomes family tax credits. The in-work payment now becomes the in-work tax credit. The parental tax credit has not changed, but the family tax credit now becomes the minimum family tax credit. Some basic questions have not been able to be answered in the quick scan of the 258 pages we have had to look at, but here, perhaps, are some. Why has there been no consultation about the decision to change the name from family support to family tax credit? The name change adds another complicating layer of confusion to an area that is already fairly confusing. We can ask anyone on the street what family support is, and they would have a pretty good idea that it applies to every child, regardless of whether the parents are in paid work. Whereas the old \u201Cfamily tax credit\u201D previously referred to payments for children whose parents were in work, it will now be the term for family support. The family tax credit now becomes the minimum family tax credit. If that is confusing to anyone in this House, members should spare a thought for the many New Zealanders at home tonight. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000762\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EAn obvious outcome of the confusion is that families will find those forms of assistance even more confusing to apply for, and they will be more difficult to get. Evidence already shows that that will be disastrous for M\u0101ori communities. Whenever complications have been introduced, M\u0101ori are more likely to miss out than other people, because we simply do not know what we should be receiving. We wonder, too, whether the name changes will be the justification for yet another round of expensive advertisements regarding the name changes. Another important outcome of the confusion is that using the name \u201Cfamily tax credit\u201D, which meant one thing but will now mean something else, raises concern that the field becomes very difficult to analyse and write about with any ease or coherence. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000763\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EThose are all questions that cannot be answered tonight, and no doubt they will be just the start of many more discussions. In light of such great uncertainties and unknowns, the M\u0101ori Party will be abstaining from voting on the first reading of this bill.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022 data-id=\u00227ef6268009f34305b880533cee0b434b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000764\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00227ef6268009f34305b880533cee0b434b\u0022\u003EHon CLAYTON COSGROVE (Associate Minister of Finance):\u003C/span\u003E I rise to support the Taxation (Annual Rates, Business Taxation, KiwiSaver, and Remedial Matters) Bill. Earlier this evening I made a statement that I want to reiterate in respect of the KiwiSaver provisions of this bill. As with the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill, this bill corrects what this evening I call 30 years of the biggest perpetration of economic and social vandalism inflicted on this country and this Parliament by the then National Government. I refer to what Robert Muldoon did in pulling the rug out from under every Kiwi who had signed up to the Norman Kirk Labour Party compulsory superannuation scheme. Tonight the provisions in this bill, as with the first tax bill we debated tonight, bed in and correct that wrong. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000765\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI challenged members over the other side\u2014Mr Foss, Mr Tisch\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000766\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002247c59882e18e489ba02a4acf14f76f7b\u0022\u003ETim Groser\u003C/span\u003E: John Hayes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000767\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225d33e7059a9445948321c53d336c8e40\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: \u2014no, not \u201CSir Les Patterson\u201D\u2014and Mr Groser, who does have a good memory of history, to stand up, justify, and put forward a policy position. We heard Mr Key say we do not need savings schemes. He said that on television tonight. Mr Key thinks we do not need incentives to save. Mr Hide got up and said that we do not need any of this stuff, because Kiwis will invest their money where they want, and will invest it prudently. Well, I say to Mr Hide\u2014that great economic genius of our time, who gave a lecture or two at Lincoln University somewhere along the way\u2014that if we look at our economic history in the boom times, the real boom times in this country of the 1950s and the 1960s, we see that we, as Kiwis, do not save in the good times.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000768\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209a5b71a-ca7e-4e7c-9e09-f9e63f18aa12\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002222384bb452e944368e7a3f219ac57e77\u0022\u003EHon Annette King\u003C/span\u003E: We spend.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000769\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022169424321c1c451fa6f8776a84a70006\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: We spend. And what Kiwis are looking for is some sort of incentive, some sort of cultural shift, to incentivise them to save. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000770\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EBut of course Mr Key, on television tonight, said that Kiwis do not need incentives to save. Then we look at what Mr English said. He said that Kiwis do need incentives. But it is a bit like National\u2019s position on tax. For 3 years, or 6 years\u2014nay, since the 1990 election\u2014National has claimed that we need tax cuts. Then on 24 April, on Morning Report, Bill English said: \u201CAnd we would agree the last thing it\u201D\u2014it being the economy\u2014\u201Cwould need would be sweeping tax cuts.\u201D Then he came into the House and announced, with some sort of chest-pumping pride, that he would vote against the cut in corporate tax, and that he would vote against a KiwiSaver scheme that backs every Kiwi in New Zealand to make provision for his or her retirement.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000771\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003ELabour says to all New Zealanders that if they put some money up, and if their employers put some money up, the Government will put some money up. By 2011 that will add up to around a hundred bucks a week, around $5,200 a year that people will get back to provide for their retirement. That, of course, is the great divide between the parties\u2014we believe that Kiwis should be incentivised to save. We do not believe in the slash-and-burn mentality of cutting taxes right across the board. Kiwis will compare that policy of the National Party, which would have given my constituents in Waimakariri\u2014whom Mr Hide waxed so eloquent about\u2014around 5 to 10 bucks a week, with what the Government is proposing and will implement with KiwiSaver, which will give them $5,200 a year, and I say to the National Party that Kiwis are not stupid. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000772\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EDr Lockwood Smith can look on from over there with his childish, delicate, flowerlike grin, but I will tell members what he cannot do. On Monday, he has to front up to the businesses in his electorate and explain, in his boyish, charming, cream-puff way, why he fought an election saying that there should be a corporate tax cut, and why his party tonight voted against a corporate tax cut. In his delicate, naive, boyish sort of way, he will have to go to those businesses and give an explanation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000773\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EI challenge him to get up tonight, along with Tim Groser, Lindsay Tisch, and that genius when it comes to Inland Revenue Department matters\u2014especially his own\u2014Craig Foss, and tell us what National members will say to the business community. What will they say to Phil O\u2019Reilly of Business New Zealand? He has been at conferences where he has said in front me, in my capacity as Associate Minister of Finance, that Business New Zealand wants a tax cut, and that the National Party will give a tax cut. That is OK; Phil is all right. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000774\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EThe National Party campaigned for years on tax cuts, yet tonight it voted against it. Tonight, National members continue the 30-year perpetration of what I called in the last debate the biggest social and economic betrayal of Kiwis, when the National Party\u2014and Dr Lockwood Smith laughs\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000775\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209a5b71a-ca7e-4e7c-9e09-f9e63f18aa12\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223296c25099254c9ba77b25edf6d94215\u0022\u003EHon Annette King\u003C/span\u003E: No, he\u2019s not laughing.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000776\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229ab9beea078b4554a5898bdcfa1653df\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: Yes, he is, in his boyish, delicate, flowerlike way.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000777\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002209a5b71a-ca7e-4e7c-9e09-f9e63f18aa12\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e9a9b3378860409792d043e396fb9420\u0022\u003EHon Annette King\u003C/span\u003E: He\u2019s agreeing with you.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000778\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002240dcafbd05ef4d2a9d9ea3244463f627\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: He laughs because he continues to perpetrate the economic vandalism of Rob Muldoon when in 1976 he pulled the rug out from under every Kiwi.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000779\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ca65ec9eeeb347fab4437e5ed8fdaa6b\u0022\u003EDr the Hon Lockwood Smith\u003C/span\u003E: I laugh because I feel sorry for the poor prick.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000780\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a19d91d7f62446a58fecea8613e17fbe\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: I beg the member\u2019s pardon? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000781\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fcc24269a4fe407b95bdab2af89b2f84\u0022\u003EDr the Hon Lockwood Smith\u003C/span\u003E: I said I laugh because I feel sorry for you.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000782\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ff67531ea7794c92a19389f05bcbdcc7\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: No, the member did not. He said something silly, but he will regret that, because he has proved he is a small man with a small policy and a small brain. Every Kiwi who listens to that mob over there knows that he and every member of his party who has stood up tonight said for 3 years that National wants a corporate tax cut and tax cuts across the board, and tonight they voted against it. Well, there is a word for that. He used a word against me, and I will not lower myself to that member\u2019s level, but I say to Dr Lockwood Smith\u2014and I look him in the eye\u2014that if he thinks the communities in New Zealand are stupid and can be conned and hoodwinked by him, I would like to be at the businesses he talks to on Monday when he explains why he voted against a corporate tax cut. I will yield to the member right now if he will tell us.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000783\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022859a7b504d9c431597b145696e675de2\u0022\u003EDr the Hon Lockwood Smith\u003C/span\u003E: Yeah, because businesses want us in Government, not you!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000784\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222911b382b7f14565a65d76d325ee27b4\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: No. That member said that his policy was to cut corporate taxes. The problem for that member is tonight this Government has brought home the bacon. Sadly, that member has flip-flopped on every policy. The only shallow, mediocre tactic that those members have is to take every policy this Government has adopted that is popular and nail themselves to it, and drop every policy they went to an election with that the public did not like and deep-six it somewhere dark and deep where only Lockwood would know where to go, then try to \u201Cme too\u201D themselves to the election. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000785\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003EBut the line has been drawn in the sand, because tonight Kiwis can judge a Government of consistency, a Government that put out a firm platform before the election, a Government that then placed on top of it a solid Budget that enhances KiwiSaver, a Government that laid out a tax reduction policy for corporates, and then they can judge an Opposition member like Dr Lockwood Smith, a member of the Finance and Expenditure Committee, who got chased out of the room by students and who campaigned in the last election on a corporate tax cut, yet tonight his leader and his deputy leader voted against it. There is a word for that. He will use it; I will not. But I challenge him again. I say to that member\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000786\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227f85aade215e4a64a3c1c95015939c85\u0022\u003EDr the Hon Lockwood Smith\u003C/span\u003E: Why is Mike Moore so embarrassed about this member? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000787\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9c512a8-d532-4ef9-ad51-0fe8d752a893\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002278c082febbd14f8d80ac9ee331dfef05\u0022\u003EHon CLAYTON COSGROVE\u003C/span\u003E: That member challenges me about Mike Moore. I will say that Mike Moore did not flip-flop. Mike Moore did not promise a tax cut to every business in the country when he was Minister or Prime Minister, then turn round and vote against a cut when members opposite proposed it. So I say to the member that he should put that in his pipe and smoke it, because there is a word for him. He represents everything that is dark about his party. I challenge him. I will come with him on Monday, I will go to the businesses he visits, and I will see what explanation he gives to businesses, because he will not be able to look them in the eye.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022 data-id=\u00229ee20cd7dc314234b557d985343d5c02\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000788\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00229ee20cd7dc314234b557d985343d5c02\u0022\u003ECRAIG FOSS (National\u2014Tukituki):\u003C/span\u003E It is a pleasure to finally stand up to speak to the Taxation (Annual Rates, Business Taxation, KiwiSaver, and Remedial Matters) Bill tonight.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000789\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EEarlier Mr Shane Jones, the chairman of the Finance and Expenditure Committee, made a couple of points. It was an outstanding example of why we need more productivity in the public sector. But he also showed he was quite ready to fill the shoes of Parekura Horomia, because, like Parekura, every time he sits down after getting up and speaking\u2014he speaks very powerfully; he is a great orator\u2014one has no idea what he said. One actually has no idea what they said, but one knows they got up and said something out loud. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000790\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E I will pick up on a couple of points that Dr Cullen mentioned in his speech to this bill and the earlier bill, the Taxation (KiwiSaver and. Company Tax Rate Amendments) Bill, and I have to take issue with one point. He claimed the KiwiSaver scheme is one of the keys to today\u2019s Budget, and he talked about the amount of savings that will be built up and will be invested in New Zealand. Well, that is totally untrue. He has absolutely no idea where the savings in these KiwiSaver accounts will be invested. He has absolutely no idea of the risks that are entailed, once these funds are invested, from default providers or wherever. So for him to get up and say there are billions of dollars on the plate tonight to be invested in the future of New Zealand is totally wrong.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000791\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EAnother term Dr Cullen kept using was \u201Cpaid for by the Government\u201D. That is partially true but the Government is only a conduit. Money is taken by the Government in the first instance and is then transferred out by the Government in the second instance. Today\u2019s Budget has been christened the \u201Cmoney-go-round Budget\u201D and it is hot on the heels of last year\u2019s \u201Cchewing gum Budget\u201D. At that time, the 67c a week indexation in the \u201Cchewing gum Budget\u201D was supposed to be the highlight. Well, it was appalling, but in contrast with today\u2019s effort, where there is zero cash until a person is 65, the \u201Cchewing gum Budget\u201D does not actually look too bad in comparison.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000792\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EThe linchpin of the Budget today and what all the talk has been about is the KiwiSaver scheme. I do not think there has ever been a programme of any Government that has had such a terrible start to its life\u2014a stuttering start with so many changes and amendments. We are here under urgency. Why are we here under urgency when we speak of anything to do with the KiwiSaver scheme? When the specified superannuation contribution withholding tax was announced, as the bill was introduced into Parliament for its second reading or perhaps the Committee stage we flew into urgency, and Parliament was informed about that about an hour before. The mortgage diversion part of the KiwiSaver scheme was hot on its heels, and again had to be pushed through urgency. Why on earth cannot the New Zealand public present to a select committee on these points? The same applies to the specified superannuation contribution withholding tax extensions, which were announced in December and were basically an admission of failure in the original design. But I would congratulate the Government on that extension, which at least tries to bring private schemes under the same umbrella.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000793\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EI feel sorry for the officials who will be dealing with the legislation tonight. There are another 188-odd pages of KiwiSaver legislation, with amendments and Supplementary Order Papers to come, no doubt. Why can we not just get KiwiSaver right in the first instance? The select committee spent 6 months on the original bill and, lo and behold, the major changes\u2014things that fundamentally change this bill\u2014were introduced, rushed through, and bulldozed into the House under urgency.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000794\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EIt was interesting to watch the Labour backbenchers as Dr Cullen read what is possibly his last or second to last Budget. They were cringing. The good old spontaneous applause was not all that spontaneous; it was less spontaneous than last year, which perhaps is a reflection on the polls they had all seen, particularly TV3\u2019s polling around tax cuts and Dr Cullen. I think Government members were also cringing because they know\u2014particularly the backbenchers and those who once had electorate seats\u2014that they are going to have to go around the country this week to explain to people who are struggling to get by where the money is. Those people will say: \u201CShow me the money.\u201D Sure, Government members can draw wonderful diagrams of money compounding to $200,000, $300,000, and $400,000 in 30 or 40 years\u2019 time; that is what insurance agents do right now, when they try to sell funds to people. But when their bill from the State-owned electricity company has gone up another 10 or 15 percent, when people have to pay another 10 percent for petrol, when their rates go up another 10 percent per annum, that is what counts. That will be the shameful legacy of this Budget, once the honeymoon is over.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000795\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EI heard an earlier speaker talk about how many phone calls are coming through to members opposite about the Budget. They are probably just asking where the money is and asking members to show them the cash. What is Grey Power saying about this Budget? What is in this Budget for the over-65s? What is in this Budget for the 20 to 25-year-olds? Where is the cash for them? What is in this Budget for those people whom the Labour Party members have a propensity to say they care so much about? Actually, they do not care for them whatsoever. There is absolutely nothing\u2014no cash\u2014in this Budget for those who have done the hard yards, have already retired, and will continue to struggle.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000796\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EThe stinginess of confiscating the \u201Cchewing gum tax cut\u201D is outrageous. A lot of New Zealanders have suffered fiscal drag. Fiscal drag is when inflation drags people up into higher and higher tax brackets. There are two ways out of that. The tax brackets can be moved up with inflation, or productivity in the economy can be grown to get more bang for our bucks. Inflation in New Zealand has been underpinned by the overtaxation and unproductive spend-up of the current regime. This Budget is not about a snapshot of just today; it is about the series of Budgets of the last 7 or so years. The difficulty that Dr Cullen is facing right now is because of the failure of those seven previous Budgets; it is not about just this one right here today.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000797\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EFourteen percent of New Zealanders are now in the highest tax bracket of 39c. When Labour came into Government, one of its pledge card promises was that 5 percent of New Zealanders would be in that sector. There is now a 200-odd percent increase; it is absolutely absurd. Once this Budget\u2019s honeymoon is over, once the hundreds and thousands of dollars have been talked about on TV and on the chat shows etc., New Zealanders will start to wonder why on earth they are struggling to make ends meet, and how on earth they will find the cash to pay the bills, to pay the increasing floating interest rate on their mortgage, which is now near double figures, and to pay for some of the items I mentioned before\u2014quite simply, how they will get by, to live and perhaps to put a little bit together to save. Apparently saving is so important.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000798\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EThey will finally realise after about 6 months of this policy that Labour has cut their real wages. It has cut their real wages and cut their purchasing power. As my colleague Bill English said earlier, that is exactly what this Budget is about\u2014Labour is essentially announcing a wage cut to New Zealanders tonight. That is an absolute disgrace. It will start to hit home once those bills start to be paid in a few weeks\u2019 time. Under this scheme, Labour will take cash off workers now, today, instead of giving them a pay rise, and will put it at risk in a fund perhaps until those workers are 65. Well, what happened to the party that used to talk about a decent wage for a decent job for a decent living, to get by?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000799\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EWhat will be the result of this Budget? Quite simply, it will result in the battlers and those who are unfortunately at the bottom of the socio-economic heap having more debt. They will be stuck with more debt. They cannot afford to participate in this programme as it is announced. Because someone would have enrolled them in the KiwiSaver scheme and they would have forgotten about it, they will be down at the dodgy shop of the guy on the corner, borrowing at interest of 20-odd percent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000800\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EWhat will happen to the over-65s\u2014the retired people? They will do more reverse mortgages because they will have no more cash to pay the bills. They will start to eat their equity, which is exactly the opposite of what Dr Cullen presumably was intending.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000801\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EFinally, Dr Cullen also spoke about the current account deficit and what a big deal that is. Well, I just took a moment to look up the 2000 Budget, and in that Budget Dr Cullen was particularly concerned about the current account deficit and the impact it was having on New Zealand\u2019s economy\u2014this was at about the time that the New Zealand dollar was at about 54-odd US cents. At the time, Dr Cullen said the current account deficit of 5 percent was much too high and that it would be heading to 2 percent over the next 2 years\u2014oh, really? In 2007 the current account deficit is at 9 percent\u2014about $14 billion\u2014and that is the core of the problem. There has been a series of failed Budgets, which is why we have these problems today. No Finance and Expenditure Committee inquiries will get Dr Cullen out of the hole he has been digging for himself for 7 years.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022 data-id=\u0022a17abcf2a49f4448ba8cffe878ca5f57\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000802\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a17abcf2a49f4448ba8cffe878ca5f57\u0022\u003ESHANE JONES (Labour):\u003C/span\u003E It is an absolute pleasure to stand again and applaud the work that Dr Cullen has done. I look forward to the Taxation (Annual Rates, Business Taxation, KiwiSaver, and Remedial Matters) Bill being referred to the committee that I chair, the Finance and Expenditure Committee. I have no doubt that after the hyperbole, and after irrelevant flights into economic fantasy have faded away from the walls of this House, my friends on the other side of the Chamber will see there is much of great worth in this bill, and they will ensure that the select committee delivers the finest product it is capable of delivering, for the benefit of Aotearoa.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000803\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EWe have just heard from that person, Mr Foss, who is colloquially known as \u201CGranny Smith\u201D. He makes the point that workers are not getting a decent or reasonable level of recompense, yet when he had the chance to vote to support an increase in their wages, the hand above his slightly balding head was the first one we saw opposing it. So one cannot have it both ways\u2014no. But I am prepared to make allowances, because that speech reminded me of a third-former in the biology lab pulling off the legs of a great big taniwha. The taniwha is the public, and the more he pulls the legs, the more the public will demand to know what the newish guys on the other side of the House stand for. What are their remedies?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000804\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EWe do not want to hear stories about flash levels of incomes from money-changing rooms. We do not want any more tedious renditions of trade discussions, which have long since put listeners out there in Aotearoa to sleep. We want a clear distillation of what it is that they propose to do to address the three things that this Budget takes care of.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000805\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003ENo. 1 is the savings deficit. No. 2 is the ongoing investment in physical and human capital. When people do not possess either a vision or a coherent set of ideas that might comprise something of a narrative, they are reduced to looking through the ever-diminishing eye of an needle\u2014which is actually like a scratched record in terms of how National members speak. They see nothing. They see only these tiny little parts of the story. That is not what the public is looking for, which is why I took a phone call before I came back to the House. Someone asked me: \u201CShane Jones, is it true, at long last, that the tax system is going to actually improve the savings of our mokopuna and our kids?\u201D. I said: \u201CAbsolutely.\u201D He asked: \u201CAnd do you mean to say the firms of Kait\u0101ia, Whangarei, Auckland, Hamilton\u2014[Interruption]\u2014and even of Epsom\u2014are going to wake up tomorrow with lower tax rates and are going to receive a host of incentives? Is this what we are going to receive, Shane?\u201D. I said to him: \u201CAt least. And the next time you go to catch a cab and you find National guys elbowing you out of the way as they race to the cab in front of you, ask them what it is they are proposing to do.\u201D\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000806\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EI said a rather charitable thing about John Key before, but there is an additional thing I will say about him. We have watched the Opposition\u2014like a team that loses to Ng\u0101ti Porou East Coast\u2014try to come on to the field and play against a far more match-fit, superior, and stronger team. At least this time the Opposition has put someone on the field who in order to win is prepared to completely disrobe and to grab his opposition\u2019s clothes: he is trying to avoid being hit by us through pinching our ideas. So now we know that strategy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000807\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EBut the reality is that we will fight anyone who wants to stand in our way because, without a sliver of ambiguity, this bill is what we stand for. This bill is what we will take to every firm, community, and household. We will say to them that stand or fall, ebb or flow, this is where they will find the Labour-led Government standing for the next 12 months. We will be able to say: \u201COK, adversarialism is very strong, but why would you want to deny the firms, investors, and entrepreneurs the opportunity to grow businesses through some very sensible and progressive tax changes?\u201D. I accept\u2014as Bill English said\u2014that there is a certain amount of adversarialism, but this actually shows that the M\u0101ori proverb is correct\u2014kei runga te k\u014Drero, kei raro te rahurahu; the lips are saying something, but the rest of the anatomy is doing the opposite. That is what this rhetoric shows\u2014make no mistake about that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000808\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EOf course, with this bill, not only have we gone on with our social investment and been committed to raising and enriching our sense of identity, but we have very much focused on an issue that will stand as the legacy of our treasurer\u2014the day that we boldly agreed to put aside the gains that are currently available and inject them into a future focus strategy. That takes a lot of courage and boldness. I will tell members something else. We did not succumb to the flirtatiousness, which we see on the other side of the House, in promising people that they will spread goods like confetti, as at a false wedding. What will that confetti give them? A momentary fix. Yet what people are really telling us is: \u201COK, you\u2019ve invested in social capital; the health services, housing, and other key elements of the socially progressive State are intact. Now you are coming back to address those issues that lie in private enterprise.\u201D In fact, I can see us possibly having to sell tickets as firms race to address our select committee. I look forward to what will be in the Budget next year, because ours is a step-by-step approach.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000809\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EI omitted something in my earlier speech, and it relates to what we are doing in M\u0101ori matters. I heard Dr Pita Sharples make yet another foolish statement\u2014as he sought to do last week over Treaty matters. I say to Mr Parekura Horomia that if there was ever a reason why we need to invest more in numeracy and literacy, then Dr Sharples evidenced it this evening on television. He said that, no, there was nothing distinctive for M\u0101ori in the Budget. Well, M\u0101ori will be big winners in the KiwiSaver scheme. At the moment far too many of our people die before they actually gain access to superannuation. I remember Sir Graham Latimer saying that it is actually a case of equity. So many of our people do not live long enough to enjoy the pension in their latter years. The KiwiSaver scheme will enable them to address that problem. Secondly, the KiwiSaver scheme will allow them to improve homeownership stakes. You see, not everything needs to wear either a moko or a korowai in order for the scheme to be useful to M\u0101ori. M\u0101ori are an integral part of the rank and file, and within the full meaning and breadth of the term \u201CAotearoa\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000810\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EWe are going to expedite the settlement of claims, despite the best efforts of the M\u0101ori Party to spread misinformation and confuse people. Fortunately for people, that confusion will last only 18 more months; then it will be all over. That party will go the way of Tuku Morgan, Tau Henare\u2014and just wander around. Of course, that party is losing enormous amounts of support at the moment. Its members are holding emergency meetings up and down the country on marae, where they meet with the caretaker and a couple of stray animals, but those days will soon be disappearing.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000811\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EJust to show how wide and how insightful our investment in education is, we are going to invest in kura kaupapa, wharekura, and w\u0101nanga. Of course, National does not believe in w\u0101nanga\u2014no. Bill English tried to have his mock press interview with Don Brash ambushed by National Party members from the Te W\u0101nanga o Aotearoa. They had to go in and participate in a mihi, but they were actually there to pour scorn on the w\u0101nanga. They went to a mihi but they had to ring up the M\u0101ori Language Commission to get a translation over the phone. No, we are not having any more of that. We are investing in w\u0101nanga, kura kaupapa and wharekura, and despite the politics of discord that unfortunately for Aotearoa have been poured out throughout the country over the last few years, we have moved on beyond that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000812\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EOf course, the great puzzle for M\u0101ori voters is why our friends from the M\u0101ori Party are busily conjuring up policy with National, wandering around trying to meet with Ng\u0101i Tahu and Tainui to buy out relativity clauses, and at the same time saying that the State is spending too much money. Therein lies the tragedy of what these two groups put out together\u2014one is locked in victimhood; the other is locked in falsehood. Goodnight, Irene; kia ora t\u0101tou.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022 data-id=\u0022e0bb1ef7aab14b08972e2b13c95ab7fb\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000813\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e0bb1ef7aab14b08972e2b13c95ab7fb\u0022\u003ETIM GROSER (National):\u003C/span\u003E There have been documents consisting of many pages tabled tonight. There has been a deluge of words, some less useful than others, and in them have been matters of some complexity and also some quite simple matters. Generally, as in life, the more important things are the quite simple things. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000814\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003EAmidst the many complexities, I am still puzzling over one thing, and that is that in the Budget speech, under \u201CNational Identity\u201D, the keynote statement says that giving $245 million or $246 million more to people who live outside New Zealand in the form of development assistance will help our national identity. When one tries to explain to Aucklanders why they feel aggrieved about the mix of policies in this Budget and then tries to explain why they should be positive in terms of their national identity, one has some hard yards ahead. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000815\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003EWhile on this matter I note that it is symptomatic of the general spending problem. There is nothing wrong with trying to make progress towards our higher overseas development assistance targets. There is absolutely nothing wrong with that, but the fundamental speed wobbles involved in the expansion of the existing programme, as identified in 2005 by the Marilyn Waring report, have not even started to be addressed. That is just one small example of one of the fundamental things that are wrong with the Budget strategy tabled tonight. It is about more spending. More billions of dollars are going down delivery mechanisms that are seriously flawed, and no serious attempt has been made to fix them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000816\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003EBut in respect of the simple things, the simple truths, what strikes me is that if we try to analyse the two centrepiece issues in this bill, which are the Working for Families additional elements and the KiwiSaver elements, we see that one simple truth comes through. When we ask ourselves why the Government has gone down these complex routes, why has it not gone for simple solutions such as comprehensive tax reform over the years, why has it gone down these bureaucratic, targeted approaches routes, I think there is a simple truth staring us in the face. They do not trust New Zealanders.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000817\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003EDebate interrupted.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000818\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003ESitting suspended from 10 p.m. to 9 a.m. (Friday)\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id20070517f859e586e1c14c4f924df91570b4eefc000819\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003E\u003Cbr\u003E\u003C/span\u003E\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000001\u0022\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022 id=\u0022ca7a6a017f394f4b8515b31173d62208\u0022\u003EThursday, 17 May 2007\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000003\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u0022c218229212f04a36a95db37f7dcaf8e0\u0022\u003EThursday, 17 May 2007\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000002\u0022\u003E(continued on Friday, 18 May 2007)\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022\u003EBills\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000004\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u002230d7c53400634bfcb1f83254e75b4596\u0022\u003ETaxation (Annual Rates, Business Taxation, KiwiSaver, and Remedial Matters) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000005\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u00222d81567bf092497590916949577863fa\u0022\u003EFirst Reading\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000006\u0022\u003EDebate resumed.\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022 data-id=\u00228a83f25d19bf4aae8f11213daacc8679\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000007\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00228a83f25d19bf4aae8f11213daacc8679\u0022\u003ETIM GROSER (National):\u003C/span\u003E It will be unclear how historians will finally judge this eighth Budget, although I think they will look upon this as one of a series of a certain course of action, before any judgment is passed; but I personally will be remembering this Budget as the time when Dr Michael Cullen, the great Budget surplus denier, finally admitted, though not by very much, reality on this issue, when he made this very cautious statement: \u201CBudget surpluses are still somewhat higher than necessary to be consistent with long-term fiscal objectives.\u201D So at last we have seen at least the beginning of some admission of this reality. After $20 billion of extra tax that has been accumulated over the last 6 or 7 years, after everybody in the country knew there was a surplus, finally Dr Cullen is prepared to admit that reality\u2014if only very marginally and very sparingly. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000008\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003EI actually say this with some regret, because I have quite enjoyed the last 5 years in which Dr Cullen, who is certainly capable of manipulating statistics\u2014I called them \u201Ctorturing statistics until they confess\u201D yesterday\u2014to the point where one gets some component of the operating balance excluding revaluations and accounting changes, and one adds this and takes away that, finally asserts that, contrary to what the National Party and others are saying, there is no Budget surplus; there is about $1.83 left, which might be enough to buy a litre of milk on a heavy discount from Pak \u2018N Save. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000009\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003EIn the course of this he has basically divided New Zealand into three categories. The first category is those who are convinced there is no surplus. That is a category of one person\u2014himself. The second category is a somewhat larger group of bewildered and bedazzled followers of Dr Cullen who are really not quite sure, having heard the mastery of this denial of the Budget surplus in action. The third group are about 99 percent of New Zealanders who do not believe a word of it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000010\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003EBut, finally, we have at least the beginning, at least a small opening, recognising that there may be an issue here. I suppose we should be grateful for small mercies. The problem is, of course, that it has been forced on Dr Cullen by the underlying dependence of his Government on a diminishing group of camp followers from the third parties, and, therefore, the concessions that he made totally lack any coherence, totally lack the right sense of timing, and have missed the political winds. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000011\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003EThe problem is that it is too late politically for this Government and it is too late economically. The time to do this was during the good years. The opportunity has been wasted. The darker clouds are coming over the horizon and now finally the recognition comes that there may be just a fraction of headroom, but these are concessions that have been wrung out of this Government by the coalition parties. They have been wrung out of this Government; with the greatest of reluctance some minor concessions have been made. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000012\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003EIf we listen to the Government\u2019s counter-attack on the Opposition last night, it basically amounts to a single argument: \u201CVote against tax cuts, vote against your own policy on charities\u2014make our day!\u201D. That is basically the defence of the Government. How puerile it would be for the Government to imagine that the public would expect the Opposition to vote with the Government on the very centrepiece of government, the very issue on which the New Zealand public will judge the performance of the Government\u2014namely, its Budget strategy. I am not going to accuse the Government of literally believing this puerile approach. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000013\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220bfa5b74-8933-458a-99d4-bbd75d9898d0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220c941fb76a21498da35e9e730d66773e\u0022\u003EChris Auchinvole\u003C/span\u003E: Why not?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000014\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cda072be2daa4fd4a131163cdbafb349\u0022\u003ETIM GROSER\u003C/span\u003E: No, I will give it the benefit of the doubt. Mr Auchinvole can take a different view, but I personally do not think the Government is so naive as to actually believe that the Opposition would vote for its Budget. Yes, there are a couple of things in this Budget that are worth doing\u2014in particular, we have been astonished that the Government adopted National\u2019s entire policy on charities, having only weeks ago characterised it as \u201CTory charity\u201D. I thought that was a bit weak; it was back to the cloth-cap, back to the glory days of Labour\u2019s struggle against the boss class. I thought that was pretty weak, but what really intrigued me, as it intrigued other members, was Dr Cullen\u2019s characterisation of it as only the redemptive power of the State being able to sort this problem out. Philosophically that is quite an intriguing statement. I do not want to use today to get into higher reaches of philosophy, but some of us\u2014the Welsh, for example\u2014thought that Graham Henry was the great redeemer, but that was only briefly. We may, ourselves, have to take that view, depending on what happens to the selection of Ali Williams, and others, but that is for the future to determine. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000015\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003EI really thought it was fascinating that Dr Cullen ascribed redemptive powers to the State. We could have a whole new religious party on this. We could have hymns recast for this\u2014\u201CThe State, the Great Redeemer\u201D.. But I do not want to get into the higher regions of religion on this point. But for Dr Cullen, having declared this as absolute anathema 3 weeks ago, suddenly to do a U-turn and put it into his Budget, is simply astonishing. Yes, of course, we support that component, but let us take the metaphor of the curate\u2019s egg. Just because there are some aspects of the overall deal that will be acceptable to the Opposition, to think that we would back the Government\u2019s centrepiece of its economic strategy is utterly naive. Unlike Mr Auchinvole, who thinks Dr Cullen is capable of it, I am not prepared to believe that. I think it is sheer opportunism on the part of the Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000016\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003EThe Government asked yesterday what we would say to business. Well, it should tune in and listen to what Mr John Key will be saying at midday in the North Harbour Stadium, primarily to a business audience. I think the Government will find a very adequate response.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u00227307ea0fd7c746b2a47a66dc4037ad7f\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That the Taxation (Annual Rates, Business Taxation, KiwiSaver, and Remedial Matters) Bill be now read a first time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 61\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 49; New Zealand First 7; United Future 2; Progressive 1; Independents: Copeland, Field.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 48\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 48.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAbstentions 4\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EM\u0101ori Party 4.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EBill read a first time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000017\u0022\u003EBill referred to the Finance and Expenditure Committee.\u003C/p\u003E\n    \u003C/div\u003E\n    \u003Cdiv class=\u0022HpsHansard\u0022\u003E\n      \u003Cp\u003E\u003Cspan class=\u0022HpsProceedingHeading\u0022\u003EBills\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000018\u0022\u003E\u003Cspan class=\u0022HpsSubjectHeading\u0022 id=\u00222fc73793154d4db8801be6826d206aa8\u0022\u003ETaxation (KiwiSaver and Company Tax Rate Amendments) Bill\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000019\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u002296197c33b3f84681a6c637a1ab797b28\u0022\u003ESecond Reading\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022 data-id=\u0022725ed7800bd844c3a222dd1600db259f\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000020\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022725ed7800bd844c3a222dd1600db259f\u0022\u003EHon PETER DUNNE (Minister of Revenue):\u003C/span\u003E I move, That the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill be now read a second time. Let me recap briefly the two main features of this bill. I refer first to the change in the current company tax rate from 33 percent to 30 percent, starting from a company\u2019s 2008-09 income year. I note that, despite the votes we are going to see against this bill, no one is actually opposed to the company tax rate being cut. That is the one point of unanimity in the House so far. We are dividing on an issue that everyone agrees on. The public of New Zealand will draw their own conclusions about that. There is also broad agreement on why we are cutting the company tax rate\u2014to improve New Zealand\u2019s international competitiveness by aligning our company tax rate with Australia\u2019s, making New Zealand a more attractive country in which to do business. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000021\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI know, Mr Assistant Speaker, that it is probably a breach of the Standing Orders to refer to the debate immediately passed, but I was intrigued by Mr Groser\u2019s comment that the biggest company tax rate cut\u2014in fact, the only company tax rate cut\u2014in the previous 20 years is a minor measure. I say that if this measure is a minor one, and if a business tax reform package that brings in $3.4 billion of business tax adjustments over the next 4 years is a minor measure, then let us have many more of them. I am very happy to be associated with the measure. It is something that New Zealand will benefit from, and it is extremely positive. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000022\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EEqually beneficial is the enhancement of the KiwiSaver scheme, and if one looks at the commentaries overnight one sees that it is viewed in a similarly positive way\u2014I gather even by the leader of the National Party. The enhancement to the KiwiSaver scheme is the introduction of a further incentive for people by giving them a tax credit of up to $20 a week for contributions to a complying KiwiSaver scheme fund from 1 July this year. Yet again we are going to have the House dividing on something that everyone agrees on, and on something that regardless of the outcome of this vote and this bill today, and regardless of the outcome of future elections, will become a feature of New Zealand\u2019s savings system long into the future. Again, the public of New Zealand will draw their own conclusions about what is going on here. The excuse that the Opposition parties are opposing because that is what Oppositions do has limited currency in an environment where people are expecting a positive contribution from this Parliament. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000023\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe KiwiSaver tax credit will be available to everyone over the age of 18 years and up until the age of 65. The scheme is designed to help people build their retirement savings faster. In turn, it is about giving them greater security in retirement and helping to contribute to a stronger economy. The good news is that it applies from 1 July this year. One of the reasons the publicity about KiwiSaver has been a little coy to date has been the development of this dramatic new proposal. The reaction overnight shows how positively it is viewed by many people\u2014and by young people, in particular. They see this as an important opportunity to get a good start in life and in a working career. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000024\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EIn addition to those principal changes, this bill brings in several amendments that are part of the building blocks of those changes. I think it has been overlooked, but it is a very important move that the reduction in the tax rate for certain savings vehicles, from 33 percent to 30 percent, from the beginning of the 2008-09 income year\u2014so that people who are saving through entities such as unit trusts and widely held superannuation and group investment funds will also benefit from the 30 percent rate applying for those funds\u2014levels the playing field even further in terms of encouraging a savings culture in New Zealand. The bill also includes a number of amendments to the portfolio investment entity tax rules, to ensure the smooth introduction of KiwiSaver later this year. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000025\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EMembers will be well aware\u2014and, indeed, supportive\u2014of the idea that these changes need to be made at this point, to ensure the smooth implementation of KiwiSaver and to ensure that where interest has been shown people can effectively apply from the start of July. Already, the initial estimates from the Inland Revenue Department and Treasury about the likely uptake of the scheme are being revised upwards as people hear more details about it. It is with great pleasure that I recommend the passage of this bill through the House as quickly as possible, and I am very happy to move its second reading this morning.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022 data-id=\u0022bd014a18548c48b985842b0f61dcf15a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000026\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022bd014a18548c48b985842b0f61dcf15a\u0022\u003EDr the Hon LOCKWOOD SMITH (National\u2014Rodney):\u003C/span\u003E This Taxation (KiwiSaver and Company Tax Rate Amendments) Bill is the first measure to implement the Government\u2019s great money-go-round Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000027\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022330c030b-99be-4461-8aaa-9a10ee5bd889\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226e50569e93624eacaba2f08e6cce5513\u0022\u003EHon David Benson-Pope\u003C/span\u003E: Can\u2019t you do better than that?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000028\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220432af741790453a904b6406b686fa13\u0022\u003EDr the Hon LOCKWOOD SMITH\u003C/span\u003E: What is the Minister\u2019s name? Mr Benson-Pope thinks it is boring. I guess that is why he gets into exciting things like stuffing tennis balls into students\u2019 mouths. Is that the kind of excitement that that member likes? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000029\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EAs I said, this bill implements the first part of the great money-go-round. This Government is fairly used to that kind of thing, because we already have a great money-go-round in this country, and it is called Working for Families. Probably now in excess of $1 billion is taxed off these New Zealand families by this Labour Government that knows best. This Government knows best! New Zealanders are dumb people! Only this Labour Government\u2014and Dr Cullen, in particular\u2014knows best. So it taxes that $1 billion off these New Zealand families, and then gives it all back to the same families. It alters the balance a bit and gives some families back a bit more than it took off them. OK, so it alters the distribution of it a bit. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000030\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EBut, in essence, one can actually calculate exactly how much is purely a money-go-round by looking at the average tax rate every family pays. If one looks at the tax graph of average tax rates\u2014at the area under the tax line for those people with no children, compared with the area under the tax graphs for people with children\u2014one can work out exactly the money-go-round and how much the same families are taxed and what they get back from this Government. It is not redistributed; it is the same tax that is taken off families and handed back to exactly the same families. This Government is reasonably familiar with the manipulation of money-go-rounds. The sad thing is that it has been estimated that to collect that $1 of tax it probably costs $1.20. While the money is churned through the bureaucracy to go back to the same people, there is a cost on the way. Of course, New Zealand is the worse off for it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000031\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EThe Government has some experience in these money-go-rounds, but this one is a new one\u2014whereby the Government, on the one hand, says it is going to reduce the amount of tax it takes off businesses and employers, but on the other hand it is going to require them to make compulsory contributions to this KiwiSaver scheme. Of course, that is another money-go-round, because on the one hand the Government says it is taking less off employers, but on the other hand it is imposing what is, in effect, an employer tax. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000032\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EAs we look at this bill, which implements the employees\u2019 side of the KiwiSaver tax credits, one has to ask oneself what Dr Cullen is actually trying to achieve with this legislation. If one looks at what has happened in the economy over the last few years one can ask what the major problems have been. I would have thought, given the seriousness of the situation the New Zealand economy is in right now\u2014and Dr Cullen admitted in his Budget speech that it is unbalanced; he used the word \u201Cunbalanced\u201D\u2014 \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000033\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022029d0f75c67a4bda95673ebfba3018ec\u0022\u003EHon Dr Michael Cullen\u003C/span\u003E: That\u2019s right.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000034\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ca7eb5171ea94edca92eebe187bdc92e\u0022\u003EDr the Hon LOCKWOOD SMITH\u003C/span\u003E: He acknowledges that fact here now. But is this lack of savings, as he calls it, the biggest problem contributing to the lack of balance? I put it to Dr Cullen that there has actually been no shortage of capital in New Zealand. There has been no shortage of ability for businesses in New Zealand to acquire capital. But Dr Cullen seems to have this view that capital is only good capital if it is owned by New Zealand people. That is a kind of childish view of a global economy. What is critically important is whether businesses have the capital they need to invest in improving productivity. There is no evidence that there has been a shortage of capital. There sure is evidence that there have been problems with productivity, because under Dr Cullen\u2019s rule he has been extraordinarily successful in damaging productivity. He inherited an economy that was growing during the 1990s. Productivity growth was 2 percent a year during most of the 1990s. It was 2 percent a year from 1992 to 2000. Dr Cullen has succeeded in reducing that productivity growth by two-thirds and he has now stalled it. Productivity growth has now virtually stalled in this country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000035\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EThere has been plenty of capital available, so it is quite clear that availability of capital has not been what has stalled productivity growth in this country. Yet productivity growth is the No. 1 issue if we want non-inflationary growth. I am sure Dr Cullen does want it, because he does not want the Reserve Bank to keep upping the cash rate because we do not have non-inflationary growth at the moment. The bit of growth that we are getting is putting a lot of pressure on inflation. Dr Cullen knows that. He knows that, yet nothing in this bill will change that balance. There has been plenty of capital available, but our productivity has collapsed, and that is the No. 1 economic problem facing this country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000036\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EDr Cullen might claim that he is bringing the corporate tax rate down from 33c to 30c\u2014and I accept that that is a positive step; we do not argue against that\u2014but even he knows that corporate tax is not the final tax paid by New Zealanders. He knows that. And, of course, many New Zealand businesses and employers are not corporates. Sure, those that are incorporated will get the benefit of that tax cut, but we all know that corporate tax is not the final tax paid by New Zealanders. Personal tax is the final tax paid by New Zealanders, and this bill does nothing to help hard-working New Zealanders. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000037\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EThat is the first serious point I make. There is no evidence that New Zealand business has been short of capital; no evidence, whatsoever. Sure, the price of capital in New Zealand is unacceptably high\u2014that has a lot to do with the Government\u2019s massive spending programme over the last 6 years\u2014but there is no evidence of a shortage of capital. So this bill, which is the first step in this programme to try to force New Zealanders to save a lot more, because Dr Cullen knows what they should do with their money a lot better than they do, will not actually do anything to New Zealand\u2019s economy. A shortage of capital is not the issue. The issue is productivity and the damage done to our economy by excessive regulation, an excessive tax burden, and totally inadequate programmes to address the infrastructure problems of this country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000038\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EThe second point I will make in relation to this bill is this. I listened to Laila Harr\u00E9 on the radio this morning. I ask my colleagues whether Laila Harr\u00E9 is a paid-up National Party member.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000039\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00223f670c71-9be5-4a7e-a197-0590da759280\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227005edf6d996411f84949beaeeab31e5\u0022\u003ETim Groser\u003C/span\u003E: Not when we last checked.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000040\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022376a81b2b67f4157b675fdacc5c72698\u0022\u003EDr the Hon LOCKWOOD SMITH\u003C/span\u003E: I am told that she was not, when we last checked. I remember Laila Harr\u00E9 in this House. I remember Laila Harr\u00E9 being far more aligned to the left and to Labour Party thinking than to ours. What did Laila Harr\u00E9 say this morning about Dr Cullen\u2019s KiwiSaver tax credit system? Laila Harr\u00E9 said that, sadly, it will not do anything for her members. That is the point I was trying to make to Dr Cullen yesterday\u2014this measure, this Taxation (KiwiSaver and Company Tax Rate Amendments) Bill, does nothing for the low-waged. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000041\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003ESadly, in New Zealand, as in all countries, we have people who do not earn enough. Maybe they do not have the skills to earn enough or maybe life has not smiled sufficiently on them. Either way, they do not earn enough and, sadly, it is those people who will get nothing out of this. They got nothing out of Dr Cullen\u2019s Working for Families in the last Budget prior to the last election. That targeted middle New Zealand\u2014not low-income people or people on benefits. This Minister talks about caring for the left. I see that Tariana Turia is nodding. She knows that many M\u0101ori people are caught in these low-waged positions and we all know, in truth, that this bill does nothing for them. It is a cynical manipulation by Dr Cullen, who thinks that he knows best. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000042\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EOne of the stunning features of this Labour Government is that its members think most New Zealanders are stupid. They think that most New Zealanders are stupid and that they do not know what to do with their own money. Government members think that Dr Cullen is the saviour, and that he should dictate how people\u2019s lives should be lived, how they should raise their families, and how they should spend or not spend their money\u2014and New Zealanders are sick of it. They are sick to death of having Dr Cullen and Labour telling them and dictating to them how their lives should be run. I look forward to the day when more New Zealanders can pursue their dreams and goals, and not have Dr Cullen foist it on them that Labour knows best.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000043\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d7b5ea616a1d4658bda883ca0156fe64\u0022\u003EThe ASSISTANT SPEAKER (H V Ross Robertson)\u003C/span\u003E: Before I call the next member, I would ask the members on my right to look at Speakers\u2019 rulings 57/3.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022 data-id=\u0022e0c126711cd643e291d9ac332a2d301d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000044\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e0c126711cd643e291d9ac332a2d301d\u0022\u003EHon Dr MICHAEL CULLEN (Minister of Finance):\u003C/span\u003E Well, at last the previous speaker got angry. He really managed to wind himself up to a full fit of totally insincere anger at the end of that speech. And what was the source of that anger? This Government is daring\u2014daring\u2014to provide support for saving. Who said that? Dr the Hon Lockwood Smith PhD. What is Dr the Hon Lockwood Smith PhD on? He is on a parliamentary superannuation scheme, where he contributes 8 percent of his parliamentary salary and the Government matches that at a rate of about two to one, at least. There is a money-go-round and Dr the Hon Lockwood Smith PhD has his little dibs right in the middle of it. What he is worried about is that people on ordinary incomes will also get some help from saving. \u201CGod help us! It is meant only for chaps like us.\u201D, says Dr the Hon Lockwood Smith PhD. It is not meant for ordinary folks\u2014the kinds of people who do not spend their lives looking at their Charolais cattle with moony eyes, saying how lovely this all looks from either end and \u201CHere is my future.\u201D, while the cattle look extremely anxious and worried about the prospect that may be facing them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000045\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ESo he is going to vote against this Taxation (KiwiSaver and Company Tax Rate Amendments) Bill, and what is in this bill? A cut in the corporate tax rate. Dr the Hon Lockwood Smith says, angrily, that this will do nothing for the ordinary taxpayer because it is not a final tax. Well, when I said that, I was scorned by the National Party. But he did admit, finally, that it might do a little bit for productivity. He did say that there was no capital problem, but it was just that we had to borrow it from overseas, and we have to pay an interest rate premium\u2014because we have the second-highest national debt in the developed world as a proportion of national income. So we pay an interest rate premium, and that is a cost to business\u2014a cost to business, I say to Dr the Hon Lockwood Smith PhD. We pay higher interest rates in New Zealand, not just when monetary policy is tight; we pay higher interest rates across the board in New Zealand than many overseas countries do, because we do not save enough. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000046\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EDr the Hon Lockwood Smith asks what we are to do about those on low incomes. Well, in fact, this scheme does more for those on low incomes to help them save than it does for those on high incomes because the tax credits are worth more. You see, what is in this bill is not the compulsory employer contributions; it is only the employee tax credit. And what did Mr Key say about that? [Interruption] Yes, that is right\u2014exactly. He said very little about it. What did Mr English say about it? Well, nothing, because Mr English has not been allowed to appear in the media because Mr English does not support the madness that says this economy is in a position of being able to have large-scale personal tax cuts. He is not allowed to say that\u2014he said it 2 or 3 weeks ago and he has been told to shut up. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000047\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMr Key goes on saying that what we need to do is to spend our way to prosperity, and that we will do that by borrowing some more money so that we can afford to spend our way to prosperity. Well, when one is a short-term money market trader playing with other people\u2019s money and does not have to worry about what happens, one can do that kind of thing. But when one is running a country, and if one gets it wrong and one wants to restructure \u201Cthe business\u201D, what it means is that one has to throw hundreds and thousands of people out of work and close down businesses all over the show. It is not like the private sector\u2014actually, it is not like the private sector. With the decisions that we have to make, people cannot suddenly say that they will go and work for somebody else. If we get it wrong, people will suffer in large numbers. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000048\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EMr Key famously said that he never cried when he had to sack people. Well, I am pleased that I do not go around sacking lots of people. What I can say is that one Kiwi has already decided to come back to New Zealand as a result of this Budget\u2014Jan Cameron of Kathmandu is coming back to New Zealand. Almost every commentator has supported the KiwiSaver changes, and it was described as a bold and courageous move. When National members were asked whether they would unwind it, they said: \u201CHmm, well, we will have to think about this. We will have to look at that and think about it before the next election.\u201D One can already see the retreat and the flip-flop being described in their minds as they go forward. But in the meantime, Dr the Hon Lockwood Smith PhD will get very, very angry, because ordinary New Zealanders are going to get supported to save\u2014and that is not what is supposed to happen in his view of life. Tough!\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022 data-id=\u0022fa9998f5b6c346719fec9c43b0c12f70\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000049\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022fa9998f5b6c346719fec9c43b0c12f70\u0022\u003ECRAIG FOSS (National\u2014Tukituki):\u003C/span\u003E I rise to speak to the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill. When KiwiSaver was originally announced it was a relatively simple project, and the original KiwiSaver bill was a relatively simple bill. Various advisers and officials said they were not sure of the take-up or the participation rate that KiwiSaver would bring. So what happened in about July last year, after the bill had gone through 6 months at the select committee? Various advisers said there would be very little take-up of KiwiSaver, and there would actually be just savings shift from some private schemes by some new entrants into the KiwiSaver scheme, who would not quite realise what they were doing and who, essentially, would be locked in for life.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000050\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003ESuddenly the Government had to have a bit of an incentive\u2014a bit of a bribe, perhaps\u2014so the specified superannuation contribution withholding tax exemption was brought in, as well as the mortgage diversion scheme, which I will talk about again in a minute. At that time participation models said that about 20 to 25 percent would participate in KiwiSaver\u2014so that was fair enough; I guess the Government was starting to learn the meaning of the word \u201Cincentives\u201D and what they bring to the place. But, interestingly, even if this proposal in the Budget announcement yesterday and the provisions in the bill around KiwiSaver are so wonderful, and even if these tax credits\u2014however they are variously described\u2014are so fantastic for our economy and so great for all participants, even at that rate, presumably only 50 percent of taxpayers will participate. So according to Treasury\u2019s models and revenue advice, 50 percent will not participate. If the scheme were so good, would it not be 100 percent? If Labour were so true to what it says to those people it claims it represents, would not the scheme be constructed in some other way?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000051\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EThe reports are already coming in\u2014we have already seen them. There was a bit of gloss on the various news channels last night, but the reports are coming in and people are asking: \u201CWhere is the cash; how can I live?\u201D, and \u201CWhere is the cash; how can I get by?\u201D. I would like to quote a couple of institutional analyses of the Budget, if I may. A quick quote is that Westpac describes the Budget as \u201Ca bit of give and take.\u201D But here is the kicker; here are the bits where, once one starts reading, one sees the details of the Budget coming through: \u201CThe fiscal impulse over the next 3 years is bigger than that published in the half-year economic and fiscal update.\u201D Listen to this: \u201CThis will keep upward pressure on inflation and interest rates.\u201D That is, those who are least able to afford it, those who are least able to find cash, will continue to struggle. Life has just got harder for them. Their real income, their purchasing power for the next 3 to 4 years\u2014at least under this current regime\u2014has just been officially cut. It is an absolute disgrace that this Labour Government wants so absolutely urgently to hurt the people that its party was apparently formed to protect. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000052\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EThere is another comment here from the BNZ that is interesting\u2014I will just read it out quickly as I move back to the bill. A common theme is starting to come through in descriptions of the Budget: \u201CBudget: more angst for Bollard\u201D, and \u201CFiscal stimulus bad news for the Reserve Bank of New Zealand.\u201D What does that mean? It means that the Budget is bad news for the mortgage payers and the credit card payers of New Zealand. That is another point I will come back to. These quotes, interestingly, are very, very descriptive and, again, the kind of thing we find out when we start to wander through the back pages of the Budget. Members should listen to the BNZ\u2019s description of some of the assumptions in the Budget: \u201Cwe feel that Treasury are still making heroic assumptions \u2026\u201D. So there are \u201Cheroic assumptions\u201D in the Budget\u2014I will come back to that in a minute.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000053\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EIt is also interesting to note some of the reports that are coming through in this Export Year. The currency is pretty much unchanged, interest rates are signalled to go up, and it is Export Year. Let us think it through. As I noted last night, in 2000 when Dr Cullen first had the opportunity to start to help reward New Zealanders and let them share in the upside of the upcoming economic boom, the current account rate was 5 percent and he was aiming for it to come down to 2 percent of GDP. Currently it is 9 percent and the difference in currency is about 40 percent. Exporters have to work 40 percent harder just to get ahead; they are in pretty much the same position as other hard workers of New Zealand.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000054\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EWhen KiwiSaver was first announced there was a lot of fanfare about that thing called the mortgage diversion scheme, which gave $1,000 for the first 5 years to help first home buyers, etc. We did not hear a word of this scheme in the Budget\u2014not one word. One of the stinging criticisms of the original KiwiSaver scheme was the contradiction between a first home buyer scheme and a retirement savings scheme. One cannot have both. If this Government were somewhat courageous, or listened to some of its more sensible advisers, it would perhaps start to split out and deal to the two, rather than just give the constant shallow rhetoric we had about trying to help first home buyers, etc. Yet it has put in a scheme like this, and had a 1-hour Budget speech that totally rejects one of the original core tenets of the KiwiSaver scheme. That does not make sense to me; perhaps the Minister, Mr Carter, will have more to say on it when he gets questioned next week.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000055\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EPart of the bill brings the company tax rate down to 30 percent. I say \u201CBravo; well done.\u201D; we support the Government on that. But, as usual, they just cannot trust the real world. There are so many caveats, so many details, and so many uncertainties\u2014the Government just cannot keep it simple. On that basis we will be voting against the package, the \u201Call\u201D in here. We want to be voting for a Budget that will build a future for New Zealand, but everything that Dr Cullen touches does not have just strings attached\u2014it has chains.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000056\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EI note the wins that the very sensible Mr Dunne has achieved in this Budget. The leverage that member has, given the small numbers of his caucus, is quite incredible. If members recall, he spoke in the past of a target of \u201C30, 30, 30\u201D\u201430 company, 30 top marginal, 30 trust, etc. Well, he is getting there; we are part of the way there. Coming down to 30 percent for company tax is a good first step in the right direction. I say congratulations to Mr Dunne on that one. But, of course, there is a double-edged sword there, because the incentives to arbitrage between the top marginal tax of 39c and this new company tax at 30c just got a whole lot bigger overnight. As per normal, the devil is in the detail here. As our leader John Key noted yesterday, John Tamihere was right: there is a subtle change in a word here, a subtle change in a word there. Down the bottom of page 67 of the Budget document, in the notes to the accounts, we see that all sorts of underlying issues and tenets are flowing through this Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000057\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EOf course, Dr Cullen and members opposite get up, but all they can really do is to make personal attacks: \u201CHa, ha, ha\u2014you\u2019re voting against that.\u201D You know, if Government members were so proud of the Budget, and if they had so much ownership of it, they would be talking about the detail of the Budget. Instead, we have heard, particularly last night, of Dr Cullen\u2019s very curious fascination with the clothes John Key wore when on Close Up.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000058\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EI will touch base on the productivity issue. You know, wage earners in New Zealand took a pay cut last night, but the crux of what the BNZ is saying is that the only way out of the problem Dr Cullen has created over the series of the last seven Budgets, is productivity. Forty percent of the economy is part of this state. Members should listen to what the BNZ says this Budget entails, because this Budget is wrong: \u201COver the past three years labour productivity growth \u2026 has averaged 0.4% per annum and over the past 10 years has averaged 1.2% per annum. Treasury assume growth going forward will average 1.7% per annum.\u201D\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000059\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EWhere on earth will that increase come from? Because unless that is achieved, the numbers in this Budget, the parameters around the modelling for this KiwiSaver proposal are, absolutely, junk\u2014absolutely, junk. This is a train crash waiting to happen, for all sorts of reasons. Its underlying assumptions are the starting point. I say well done to Dr Cullen for the company tax rate, but I tell him that the package here is an absolute nonsense.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022 data-id=\u0022e7b3c315ada3423c95a1173c55a10f4d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000060\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022e7b3c315ada3423c95a1173c55a10f4d\u0022\u003ER DOUG WOOLERTON (NZ First):\u003C/span\u003E Following that speech\u2014and I regard Craig Foss as a friend on a personal basis, I would like to think\u2014I tell a lot of my other friends in the National Party, and I have just as many in the Labour Party, as everybody knows, in case people think there is a change of allegiance here, to not let the moneylenders and money boys take over their party. Average people do not deal on the stock market. Average people are not experts in shifting money around. Average people do not go to the financial pages of the newspaper every day. I know Mr Foss, and I go to him for advice. I regard him as an expert. I talk to Dr the Hon Lockwood Smith and respect him. But do not degrade or be nasty to the people who do not have the level of expertise of those members, because this bill evens out the situation. Lots of people are happy to invest just some part of their income in a fund that is managed by somebody else, and many people prefer to do that. I am actually one of them. I would like to think that one day I will get the time to mess around with money and shift a bit of it around different companies, but at the present time I do not want to do that. I want somebody to do it for me.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000061\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022909c825c-6cf3-49bd-9c74-6df837480631\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c6d38a393bf6438ba233e5c073fb875c\u0022\u003EBob Clarkson\u003C/span\u003E: I\u2019ll do it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000062\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002216bf6458693e4463878244f33bb6ccdd\u0022\u003ER DOUG WOOLERTON\u003C/span\u003E: Bob Clarkson will do it for me, and I could probably do worse than give him a couple of bob to look after for me, I admit that. But I prefer to give it to AMP, AXA New Zealand, the Tower Group, or somebody like that, and this is what this scheme is about. Firstly, the Government has to get the tax rate that those companies are charged, down to a reasonable level, and this bill we are talking about now goes further and does it for other entities. I applaud that. It helps the average person, or the person at the lower end whom National would like to talk about, get a tax rate that only the elite, perhaps, enjoyed previously, and it allows those people who want to invest through entities and who want to join up to KiwiSaver to have an avenue for doing so. They do not have to go to a stockbroker, they do not have to go to the bank manager, they do not have to learn about the vagaries of the financial markets, they can put the money away and basically forget about it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000063\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EWe know that all is not without risk, and in the depths of this bill is some attempt, and I applaud the Government for it, to get the huge costs that these companies have previously charged, down to a reasonable rate. I applaud that as well. But this legislation is not about people who want to invest in the stock market, it is about saving to the degree that one wants. The Government has recognised that it is hard for people who do not earn a lot, and it has stepped in to make sure that that can happen. It saddens me, because those who are very financially literate in the National Party are deliberately saying that this is a wage cut for the lowly paid, when they know\u2014because they are financially literate, and I would like to think they are responsible enough to say\u2014that money going into the bank in the form of saving is just as important, or more important, as a wage. Because this is a wage increase that the Government is happy to help people with. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000064\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003ESure, one cannot use it until one is 65, but it is putting money away, which is very important, and people on lower wages have never ever, ever, been able to do that during their lives. They do not have the expertise of Mr Tremain. They do not have the expertise of Mr Foss, Mr Bennett, or, God bless us all, Bob Clarkson, whom we recognise as having particular expertise in making money. I would liked to think that Mr Clarkson, who is known for his largesse, would have ensured that his employees had something like this given to them by him of his own free will\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000065\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022471dee54-f59e-4497-b3d3-c39044ce7169\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222f8a397bcaf64ad0b236138aee01b54a\u0022\u003EHon Damien O\u0027Connor\u003C/span\u003E: Did he?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000066\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e7e00276b35c4115a41e1fd5c28ca59a\u0022\u003ER DOUG WOOLERTON\u003C/span\u003E: \u2014because he talks about all these things. And the question my colleague Damien O\u2019Connor asks is, \u201CDid he?\u201D. I think we can safely assume the answer to that is \u201CNo\u201D. So we have had to come to this House to ensure that the Government is going to look after those people at the lower end and give them some certainty for the future. This bill does that. Will the Government do another \u201CMuldoon\u201D? That is the critical question as we go into the next election and as we go into the future. I tell Mr O\u2019Connor that I do not think it will do a \u201CMuldoon\u201D, because it knows that it cannot do that twice in living memory. The Government cannot raid people\u2019s futures twice in living memory. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000067\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EI was in the National Party in the Muldoon years. I know what happened. I was in the hierarchy, and had been so for many years, so I know what Muldoon did and I know what people in the National Party thought of it. I can tell Mr O\u2019Connor that the people in the National Party will in no way allow the present-day National Party to get rid of this scheme. They will not. So I can tell members just about with certainty that this scheme will remain even under a National Government whenever that may be in the future, and many of these members may not be here at that point.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000068\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022471dee54-f59e-4497-b3d3-c39044ce7169\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002245a9152adb444345aa0b132cc51674d8\u0022\u003EHon Damien O\u0027Connor\u003C/span\u003E: With a money trader for a leader! \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000069\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c672c3ae6df1489992a6c301594f56b8\u0022\u003ER DOUG WOOLERTON\u003C/span\u003E: Even with a money trader for a leader, there are still at this point more people who do real things rather than money trading in the National Party, and I am encouraging them to take up positions in the National Party and not to leave it all to the money traders. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000070\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EDr Cullen was quite right when he said to Dr the Hon Lockwood Smith that we in this place\u2014every one of us\u2014are on a scheme such as is being offered through KiwiSaver; only, ours is better. Our scheme is two for one. For every $1 we put in, we get $2 put into our savings. Now we regard that as part of our salary. When I see articles written in the newspapers about parliamentary perks and all those sorts of things, that is\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000071\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223e2b75f33d4e4d3f8b83147c6ca9ed47\u0022\u003EHon Member\u003C/span\u003E: Baubles!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000072\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022993ad5e110204ccb9f365b5fd21e5962\u0022\u003ER DOUG WOOLERTON\u003C/span\u003E: \u2014baubles, exactly, and that is uppermost amongst them. We regard that as a very, very good scheme. I know very financially literate members in this place who do not subscribe to a recognised scheme such as AMP, the Tower Group, AXA, or whatever; they have designed their own, and that is allowed, too. But these are people at the top end. Now Dr Cullen and this Government, with New Zealand First support, is trying to extend these great benefits down to people who have, hitherto, never been able to have them. I think that that is an indictment, and I would like to think that people with the ability to spread their largesse around like Bob Clarkson would have been able to do that for their workers. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000073\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EBut I think, and I am pretty sure, that the National Party will not get rid of these schemes. It will certainly not put the tax rate back up for companies, but maybe it will. But I do not think it will. It will certainly not allow the tax rate to go back for providers. It will certainly not allow companies such as AXA, the Tower Group, and what not, to have their tax rates put back up. But, in fact, today, sadly, National members are talking about opposing this bill\u2014and they are\u2014and talking about lower salary earners getting less income. They know that that is not correct.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022 data-id=\u0022f4fcc76bdfd248219d292dcb919a7d6c\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000074\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f4fcc76bdfd248219d292dcb919a7d6c\u0022\u003ETARIANA TURIA (Co-Leader\u2014M\u0101ori Party):\u003C/span\u003E T\u0113n\u0101 koe, Mr Assistant Speaker. T\u0113n\u0101 t\u0101tou katoa. It was Plato who once said: \u201CThe excessive increase of anything often causes a reaction in the opposite direction.\u201D And so it is that yesterday the Minister of Finance introduced a reduction in the headline rate of corporate tax from 33 percent to 30 percent, while in the same breath he announced that there would be compulsory employer contributions to KiwiSaver phased in over the next 4 years. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000075\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EThis bill provides for the tax rate changes and the KiwiSaver enhancements announced in the Budget. The idea is that the company tax rate reductions will increase productivity and improve international competitiveness, meaning that overseas companies will want to come over here and do business. That might be well and good, but it does make me think about the likely impacts on our own local businesses and business people. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000076\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EWe have already experienced New Zealand companies shutting up shop and moving overseas, businesses downsizing, and a fall in wages. There is also the not insignificant matter of some 300,000 New Zealand children living in poverty. What about the basics, like being able to afford to heat the home, buy clothing, pay for transport, and participate in sport? What about the ability to eat a decent meal unhampered by missing or decayed teeth? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000077\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EM\u0101ori Party members support a reduction in company tax rates as part of our taxation policy, so we are hardly going to oppose the notion of it. We believe that larger corporations should be encouraged to grow, to increase employment of rising quality, and that a decline in their tax rate from 33 percent to 30 percent will help to effect that. But the wider issue is that the tax relief will not go to those who need it most urgently, and those are beneficiaries and people on low incomes. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000078\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EWe looked to the 2007 Budget with one clear aspiration\u2014that is, that all people should have sufficient income to be able to participate in society and in their communities. We expected there to be initiatives to support meaningful, full-time work and for people to benefit from a realistic minimum wage. We have talked before in this House about the need to raise to $25,000 the maximum level of income that people may earn before they are taxed, but we have yet to see a system that redistributes wealth equitably. We continue to note that the KiwiSaver scheme is not accessible to all\u2014namely, beneficiaries and those on low incomes\u2014yet through the enhanced KiwiSaver scheme it is expected that 50 percent of New Zealanders aged from 18 to 65 years will actively contribute to KiwiSaver or a complying superannuation fund. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000079\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EThe economy should not be a \u201Cgame of two halves\u201D. If 50 percent of New Zealanders are benefiting from KiwiSaver, it does not take the use of a calculator to realise that 50 percent are not. One-half of New Zealanders are getting a pretty good deal\u2014and I include ourselves in those who are getting a pretty good deal. Those opting into this scheme or a complying superannuation fund will receive a tax credit, dollar for dollar, of their contribution, up to a cap of $20 a week. Those opting into the scheme or a complying superannuation fund will receive compulsory matching employer contributions, starting at 1 percent in 2008, and reaching 4 percent of gross salary or wages by 2011. But for some vaguely defined different subgroups of the labour force\u2014that is, the working poor and beneficiaries\u2014the benefits will be negligible. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000080\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EThis new category of people, \u201Csubgroups\u201D, appears in the general questions and answers section of the KiwiSaver package. I wonder whether these are the people who earlier this year were referred to as \u201Cthe underclass\u201D\u2014\u201Csub\u201D meaning subordinate, secondary, below the radar, or inferior. These different subgroups, presumably, are those families who live with net-of-housing cost incomes below the 60 percent line\u201423.6 percent of whom are M\u0101ori, 40.2 percent of whom are Pasifika, and 15 percent of whom are P\u0101keh\u0101. Subgroups are also, no doubt, those who live in houses defined as overcrowded\u201423 percent of all M\u0101ori, 43 percent of all Pasifika, and 5 percent of all P\u0101keh\u0101. Subgroups are no doubt those who live in severe hardship, with below-average earnings and high-frequency visits to food banks. Subgroups are no doubt those who live in clusters, drawing a benefit. Subgroups are obviously not those who will benefit from the Government\u2019s largesse in this Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000081\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EThe M\u0101ori Party does support the enhancements to KiwiSaver that act as incentives to join the scheme, but we will not desist from confronting the situation for beneficiary New Zealanders living, or struggling to live, on a measly few hundred dollars a week. For average people on an unemployment benefit, a 4 percent contribution would see them put about $12 into KiwiSaver. Although they will not of course receive any employer contribution, they will get a tax credit of $12. That will bring them to a grand total of $24 in savings a week. That may not sound very much to people who are in this House, but if it means sacrificing 20 litres of milk a week, or bus fares for the kids to get to school, then the prospect of savings becomes remote. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000082\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EThe question of whether low-income workers will be able to commit to giving the minimum 4 percent of their pay to join up to KiwiSaver has of course been frequently raised by the M\u0101ori Party, and it is ironic that just 2 days after the bill to protect the rights of children was passed, another bill is before the House that still continues to leave our poorest families behind. The proportion of all children in severe hardship or significant hardship in New Zealand has increased from 18 percent to 26 percent since the year 2000. I am reminded of the wisdom of Bishop Desmond Tutu, who said: \u201CIf you are neutral in situations of injustice, you have chosen the side of the oppressor. If an elephant has its foot on the tail of a mouse and you say that you are neutral, the mouse will not appreciate your neutrality.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000083\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EThe ongoing injustice of social exclusion is evident in the thousands of New Zealand families who are struggling to live on incomes well below the poverty line. We cannot collude with the silence of neutrality or the \u201Cfairness for all\u201D rhetoric, which ignores the reality that too many New Zealanders are unable to participate in their communities. Benefit levels are still far too low to enable families to do anything about the situations of social distress they find themselves in. We contrast that with the projected $3 billion to enhance the KiwiSaver scheme, and the $2.1 billion that the reduction in company tax will cost the country in lost revenue. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000084\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c2dfe169-d946-4f87-8d43-0bcdb7d8bebc\u0022\u003EWe believe that the moral test of a Government is how it treats those who are at the dawn of life, those who are its most vulnerable, and our poorest and socially impoverished citizens\u2014amongst them, tragically, a disproportionate number of young people. The M\u0101ori Party believes that if we invest in people and give priority to our human capital, our whole society will prosper. We believe that the amount of the benefit should be raised to that of the minimum wage, and that work should be meaningful, productive, and skill-enhancing. These are aspirations that are worthy of urgency at any time of the year. T\u0113n\u0101 koe.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022 data-id=\u00228d9c51d61c914edaae09d7817d618468\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000085\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00228d9c51d61c914edaae09d7817d618468\u0022\u003EHon TREVOR MALLARD (Minister for Economic Development):\u003C/span\u003E I thank the co-leader of the M\u0101ori Party for her comments, and for what I perceived to be general support for the legislation, even if she says it does not go far enough. I think that is the summary of what I took from her comments, because she indicated that, as far as they went, the company tax rate changes and the KiwiSaver enhancements were good things. I agree with her on that. I disagree with her final point. My view is that it is appropriate to keep a difference between the rate of a benefit and the rate of the minimum wage. I think if we are to encourage people to go to work, we have to accept that going to work costs, and that that should be recognised as part of our remuneration system. But, generally, I thank her for her comments. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000086\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EI also say that we should be able to work together on ensuring that M\u0101ori are involved in KiwiSaver to the greatest extent possible. I think that given the way it works, with people going to new jobs and with people having job changes, M\u0101ori are likely to be disproportionately enrolled in the scheme as a starting point. Part of our challenge, I think, is to encourage them to stay enrolled and not to opt out. But also we need to look at people who are in jobs and staying in jobs, and to work on ways to encourage them to join up. Frankly\u2014and I agree with Ms Turia on the M\u0101ori mortality statistics\u2014there is not a fair deal for M\u0101ori from superannuation given the way it works, because the collection rates are not nearly as high as for other people, as a result of the shorter lifespans of M\u0101ori. The difference with KiwiSaver is that the money put into the scheme will stay with the family; it will stay with the estate. Until we get the gap closed, so to speak\u2014and we did quite a lot of work on that together in the past\u2014that will provide an equity for the family. Having that transfer, I think, is useful. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000087\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EBut the key will be to make sure that people go into the KiwiSaver scheme. The test I have been doing to gauge the attractiveness of the scheme is to take a green $20 note and say to people that if they can get one of these each week, then the Government will put another one on top of it, and the employer\u2014with a 100 percent Government subsidy, actually\u2014will put\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000088\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002291695e9a2c8e4a2da3c08a5e1a7439a0\u0022\u003EChris Tremain\u003C/span\u003E: Up to $500.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000089\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221486194a5b064cde8a72b9f24785eda1\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: We are talking about $20, with a 100 percent subsidy on $20. The member knows that. He has a reasonable reputation in some areas, but not in mathematics; we are talking about a $20 contribution. And that is the nicest thing I have said about a Tory for a long time\u2014that the member has a reputation for being good in some areas. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000090\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EI will go back to Tariana Turia\u2019s point. If we can take $20 from a person, $20 from the taxpayer, and $20 from the employer\u2014totally subsidised\u2014then that is $60 a week. That is over $3,000 a year sitting in a fund before any interest goes on to it\u2014before any returns go into it\u2014and that is a nest egg that builds. People, as they become more Internet savvy, will be able to check on it each week and watch their money go up. People will get statements and they will see some real returns. That is positive. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000091\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EI turn now to the National Party, and I say to its members that I am looking forward to sending Bill English\u2019s speech on this bill to every employer in my electorate\u2014the bit where he says that National will vote against a cut in company tax. The National Party!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000092\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220985e6656ee04b198cc14f33d2762019\u0022\u003EDarren Hughes\u003C/span\u003E: Unbelievable!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000093\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d7c8d0d6fb7745fcaa622ea645f5a2d4\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: Well, no, it is believable. When was the last time the National Party voted for a cut in the company tax rate?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000094\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022474297057a9341e398fd09b141a6f121\u0022\u003EDarren Hughes\u003C/span\u003E: The 1960s.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000095\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b8e3a44c5c3b42a585b355c7e1c29640\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: No, I do not think it was. I do not think the company tax rates were cut in the 1960s. I think it was before I was born. It is really ancient, ancient history. In fact, I have a real question\u2014and Mr Dunne may know the answer to this. Has the National Party ever in its history, since the 1930s, voted for a reduction in the rate of company tax? Never! Never in its life! In 1988\u2014and I can remember back as far as that; I was about David Cunliffe\u2019s age at the time\u2014National voted against that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000096\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003ENational used to be a party that supported business. It used to be a great party. It used to be the party of Holyoake and of Marshall. It had a history of supporting business and doing things for business. It has been a party with a history of calling for tax cuts for companies and voting for them. If I were outside the Parliament, I could call that hypocritical, but I am not, so I will not.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000097\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022471dee54-f59e-4497-b3d3-c39044ce7169\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c362935ed2a04f869cd7dddbf07bd907\u0022\u003EHon Damien O\u0027Connor\u003C/span\u003E: An \u201Ch\u201D.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000098\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022564f63ea1ac84024b9299b72197d4610\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: It is a big \u201CH\u201D word. The big \u201CH\u201D word is another one, actually. It stands for \u201CHelen\u201D in my case, so I will not say it, at all. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000099\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003EI ask National members why they do not just vote for the second reading of this bill. Why do they not vote for the company tax rate cuts at the Committee stage? They may want to vote against some of the other bits. I welcome this. I thank them for it\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000100\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228eab3537de554b96868dc4a190918694\u0022\u003ECraig Foss\u003C/span\u003E: Where\u2019s the money for the programme?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000101\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022baca9e8711f74199a31d02f1f732833b\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: I say that as far as Craig Foss is concerned, the employers in his electorate will be receiving copies of Bill English\u2019s speech, too\u2014and that turkey will have\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000102\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226cb16faa00fd4e6da339cf68f528ae80\u0022\u003EThe ASSISTANT SPEAKER (H V Ross Robertson)\u003C/span\u003E: No. The member will not use nicknames or any other names. He will withdraw.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000103\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b6930004c3204849a14112156eacd4c1\u0022\u003EHon TREVOR MALLARD\u003C/span\u003E: We are not allowed to call members turkeys? That is a new one. I withdraw.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000104\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b5c2c34e96aa4677b7b9aabc39046f2b\u0022\u003EThe ASSISTANT SPEAKER (H V Ross Robertson)\u003C/span\u003E: Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022 data-id=\u002202ec24e5641b4e409d60de7f7866476c\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000105\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002202ec24e5641b4e409d60de7f7866476c\u0022\u003EHEATHER ROY (Deputy Leader\u2014ACT):\u003C/span\u003E I rise to speak to the second reading of this bill. Here we are yet again pushing through a hugely complex bill about matters that affect every person in the country\u2014businesses and individuals. Here we are sitting under urgency on a Friday, pushing through something that none of us on the Opposition side of the House have had a chance to have a proper look at.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000106\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022909c825c-6cf3-49bd-9c74-6df837480631\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002275155f91dc6745bdabfda5f8da9e150e\u0022\u003EBob Clarkson\u003C/span\u003E: More bureaucrats.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000107\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022320c5699cffd476f958f282a8c455bc4\u0022\u003EHEATHER ROY\u003C/span\u003E: That is quite right. More bureaucrats will be needed as a result of this legislation. And here we are. Many of us have had to cancel appointments with constituents around the country so we can be here today to defend democracy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000108\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EA quick look at the explanatory note shows me that the bill is about a huge number of things. Here we have enhancements to KiwiSaver and changes to the company tax rate\u2014changes that I have to say are a bit of a backhander. On the one hand we are\u2014properly\u2014giving businesses a reduction in company tax rates; they should have been done well before Dr Cullen\u2019s eighth Budget. On the other hand we are saying that employers now have a compulsory obligation to contribute so that the Government gets the honour and the glory for giving people a savings scheme. Where is the fairness in that? Many employers will be worse off as a result of this Budget. If they are supposed to be grateful, then this is no sort of Government at all\u2014as we know it is not.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000109\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EThere are changes relating to research and development tax credits. Again, there are more complications. This Government loves penalties, and here we are putting in place penalties that we have not even had a chance to look at to consider whether they are fair and proper. This bill is not going to go to a select committee. No one will have the opportunity to look\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000110\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a0c145211517461a83a74e277c11b914\u0022\u003EHon Peter Dunne\u003C/span\u003E: It\u2019s the wrong bill. That\u2019s the bill that\u2019s going to the select committee.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000111\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228260a1ed86e347a9aa59a7d2d201808b\u0022\u003EHEATHER ROY\u003C/span\u003E: Good\u2014I am pleased it is going to a select committee, because it jolly well should\u2014[Interruption] It is a bit confusing, because we were given this bill last night to have a quick look at and now we are supposed to be experts on it so we can stand here and talk on it with some degree of authority. It is all very well for Mr Peter Dunne. He has had the chance for months to look at the legislation, so that at election time he can say: \u201CLook at the gains I\u2019ve made from this Government.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000112\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EOther policy includes tax exemptions, implementation of fair dividend rates in life insurance\u2014the list goes on and on. There is a huge degree of detail and complexity, and we are supposed to be grateful that we are here on a Friday debating on behalf of the people of New Zealand who have great concerns; they are not going to get the chance to voice those concerns themselves. There are a great number of concerns, and this is not democracy working as it should. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000113\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EDr Cullen promised us that his policies would bring New Zealand 4 percent growth in GDP. He actually said at one point\u2014many years ago\u2014that that was how he would be measured. Well, under National Certificate of Educational Achievement standards, Dr Cullen has just scored Not Achieved. Or, if we are talking about unit standards, he has scored Fail. Actually, he has not, because one is not allowed to say \u201Cfail\u201D. That is not allowed in this day and age. So on his score card there will be nothing. There will be just Not Achieved. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000114\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EWhat do we have today? Is it 4 percent growth in GDP? No. Today it is 2 percent growth in GDP. What is Dr Cullen\u2019s forecast for the next 3 years? It is less than 2 percent. There is a bit of a gap, is there not, between 4 percent and less than 2 percent? He is not doing very well even by his own standards, let alone by the standards of the rest of us on the Opposition side of the House. We have some ambition for this country, but, sadly, Dr Cullen does not. What is Dr Cullen\u2019s forecast for the next 5 years? It is an average of 2.3 percent. Already we are seeing a huge shortfall against his own self-imposed 4 percent yardstick. Dr Cullen\u2019s yardstick\u2014and perhaps this will be a message to him, or enlighten him\u2014will not get New Zealand\u2019s GDP per capita into the top half of countries in the OECD. The country is being dragged\u2014with kicking and screaming from members on the Opposition side of the House\u2014right to the end of the bottom half of the OECD. Dr Cullen has certainly failed. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000115\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EWe need a flat-tax rate of 20 percent. That would really kick-start the growth that New Zealand desperately needs if we want a First World health and a First World education system, and if we want decent economic growth. The way to achieve more savings and more investment is to put more money in people\u2019s pockets to achieve higher economic growth. That means across-the-board comprehensive tax cuts\u2014not just to the company tax rate where it has been given with one hand and taken away with the other. It means bringing the top rate of personal taxation down to the same level as company taxation rates. That level too should be dropped to 30c in the dollar, and other rates dropped significantly, if we could not look realistically at a flat-tax rate of 20 percent. That would mean more savings, more investment, and a more prosperous future. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000116\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EDr Cullen and the Labour Party do not seem interested in those things for New Zealand, but that is why I came to this House. I want to see decent economic growth in this country. I want to see a decent health system where everybody gets the treatment they need. I want to see a decent education system. Our Minister of Finance should be aiming at much more than a Not Achieved, he should be aiming at an Excellence, but he has no idea how to go about doing that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000117\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EOnce again this is a Budget for tax accountants to get fat on. The Inland Revenue Department must be sitting today wondering how it is supposed to introduce the detail and deal with the complexity of it. No doubt, as Mr Clarkson points out, there will be more employment. There will be more bureaucrats and more people trying to deal with the complexity of a system that did not need to be that way. The tax package is incoherent. It is cutting company tax independently of personal rates, and that makes absolutely no sense at all. The complicated tax credits for investing in Government schemes just add to the complexity of our tax system. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000118\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EPeople out there are focusing on KiwiSaver in the Budget, and that is exactly what Dr Cullen intended. I was in a taxi this morning and the taxi driver said that it was all people in his office have been talking about this morning. But, guess what, those people cannot afford 4 percent of their income to go into savings. They need that to pay their mortgage and to feed their families; they certainly cannot entertain the idea of 8 percent. It might sound all very attractive on paper, but where are they supposed to get that money from? Dr Cullen has not addressed that. He should be here in this House telling us how that is going to happen. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000119\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022909c825c-6cf3-49bd-9c74-6df837480631\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002261dd8b575a364621b709ab2744054022\u0022\u003EBob Clarkson\u003C/span\u003E: They\u2019re not a people party.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000120\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220e84bdd597744bcea3ade87cccbe779f\u0022\u003EHEATHER ROY\u003C/span\u003E: They are not a people party at all; they are here for themselves. The Christchurch Press \u201CPerspectives\u201D column is very interesting this morning. It contains a very interesting article written by Michael Littlewood, who is the co-director of the retirement policy and research centre at Auckland University. He made some very interesting comments, and I am going to read a few of those out. Firstly he said: \u201CUntil recently, New Zealand had a simple, transparent\u201D\u2014[Interruption] Perhaps the Minister Mark Burton would like to stand and take a call because I cannot hear myself over here.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000121\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225c1c642714b64ad9aea04c4c5a100743\u0022\u003EThe ASSISTANT SPEAKER (H V Ross Robertson)\u003C/span\u003E: I remind members on my right to look at Speakers\u2019 ruling 57/3. Interjections are to be \u201Crare and reasonable\u201D, and, as a former colleague once said here, if at all possible, witty. At the moment we are having conversations.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000122\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229bb8d92dba694f86a1f129d079962f40\u0022\u003EHEATHER ROY\u003C/span\u003E: I want to read out some of the comments that Michael Littlewood, a very well-respected gentleman, has made on the KiwiSaver tax breaks and the Budget. He said: \u201CUntil recently, New Zealand had a simple, transparent tax and retirement income structure that has served us well. In fact, it was a world leader in simplicity, in transparency, and equity but not a lot of New Zealanders understood that.\u201D He went on to say: \u201CThe Government and other commentators have created a straw man.\u201D He said that the Government is telling New Zealanders this: \u201Cyou\u2019re hopeless savers; you can\u2019t be trusted with your own money; you own too much property; you\u2019re drowning in debt; we here in Wellington\u201D\u2014\u201Cwe\u201D meaning the Government\u2014\u201Cknow much better what to do with your money and here\u2019s how it\u2019s all going to happen.\u201D Those comments are exactly right. This is a \u201Cwe know best Budget\u201D. The Government is saying poor people out there know nothing and need to come and listen carefully to what the Government has to say because it knows best how people should spend their money. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000123\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EThe article continues: \u201CIn the United States, tax breaks for retirement saving are expensive, favour the rich, are complex, and don\u2019t seem to increase saving.\u201D We never look around the world to see how other countries are getting on; we just rush forward and do these things ourselves. Michael Littlewood says that in Australia, compulsory tax-favoured savings seem only now, after 15 years, to be having a little impact, and it is only very little. He continues: \u201CIn Britain, tax breaks for saving favour the rich at the expense of the poor.\u201D That is where the taxi driver was absolutely right this morning. Half the value of tax incentives goes to the top 10 percent of taxpayers, who do not need any incentive to save; that makes absolutely no sense. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000124\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EThis Budget is a Fail. Mr Littlewood\u2019s final comment could not have summed it up any better. He says: \u201CSo, we seem not to have a retirement saving problem; retirees seem to be in good shape;\u201D\u2014and they are\u2014\u201Ctax incentives are costly, complex, regressive, inequitable, and ineffective; governments seem to affect citizens\u2019 total behaviour only a little but most important of all, what we already had actually seemed to be working.\u201D So here we are putting in place something we know is not going to work and that people will have no control over.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022 data-id=\u00222c8cf48651934446b6a63b53d289b7ab\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000125\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222c8cf48651934446b6a63b53d289b7ab\u0022\u003ECHRIS TREMAIN (National\u2014Napier):\u003C/span\u003E The Minister of Finance has challenged those of us on this side of the House to go back to our provincial areas and explain why National will not be voting for this bill. I have a challenge for the Labour members, and it is to go back to their provincial electorates and explain to their constituents how this bill will really impact on small to medium enterprises in their electorates, and how it will particularly impact on exporters in Export Year\u2014the year of the exporter. I want to tell Government members, in case they have not opened their eyes, where exporters are in Export Year. Many of our exporters are not making one dollar at all. If they are not making money, they do not get any sort of tax break whatsoever. But when they get hit with a payroll tax, guess what happens?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000126\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f1467c017ee844deadfcc8822bb34f98\u0022\u003EDavid Bennett\u003C/span\u003E: You\u2019ve got to pay.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000127\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f4bee4ddcf88408db6b814d640d20bdd\u0022\u003ECHRIS TREMAIN\u003C/span\u003E: They have to pay it, so, unfortunately, they end up losing more. I want to begin my speech by talking about one exporter from my electorate, Design Spun, and an email that this exporter recently sent to me. I want members to understand the impact that this bill will have on exporters such as this and on their ability to improve exports out of this country. It is my opinion that I will be able to explain with ease to these guys why I voted against this bill for them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000128\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EHere is the email from Mr Jackson of Design Spun: \u201CAs a manufacturer and an exporter\u201D\u2014he then has in brackets a big \u201Cwas\u201D, with exclamation marks\u2014\u201CNew Zealand\u2019s current economic environment is an extremely difficult place to be trading in. We have spent the last 2 years building on our export market and it has been very disappointing to watch those efforts eroded daily by the level of the New Zealand dollar. We are being caned from both ends, with the higher dollar making our major competitor, imported yarns, even cheaper, affecting our domestic market, also. Government legislation has also played a significant part, with direct cash-cost increases in the form of minimum wage increases, the additional week\u2019s holiday, particularly in the form of significant ongoing compliance adding cost and detracting from the business at hand.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000129\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EBut, guess what, another tax is coming for that business, and I will explain that shortly. Mr Jackson goes on to explain: \u201CWe talk to a number of different businesses daily and they are not experiencing the rosy times that commentators would have them believe. They are in similar positions to us, except that they are currently holding off making decisions regarding their future, hoping the environment will change.\u201D Mr Jackson said that they were not quitters but that this was too tough and they had had enough. He says: \u201CWatch this space. There\u2019s a helluva lot more of us out there that feel the same way. Every way you turn these days there\u2019s a barrier of some description.\u201D [Interruption] \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000130\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EThese are the sorts of people that Mr Hughes will have to explain this payroll tax to when he goes back to his electorate. I would have welcomed this bill if it were purely to reduce company taxes, without a sting in the tail. But there is a sting in the tail. This bill does not include a tax rate. It comes with a payroll tax that employers like Mr Jackson will have no ability to overcome. The sting in the tail is compulsorily matching employer contributions to employee savings, and it is this kick that is the reason that National will be voting against the bill. Up front the bill looks good, and the spin will be fantastic, but I ask members to think about Mr Jackson in this regard. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000131\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EHere is a question I posed for the Labour Party yesterday, and it is one that I think people need to really understand. For most businesses the biggest cost in expenditure is the cost of labour. I talked about that yesterday. A good example is Mr Jackson\u2019s business: after materials, labour will be his biggest cost. It is all very well when a business is making big profits, because a 3 percent reduction in the headline corporate tax rate will actually improve its position. However, when exporters make no money, there is no advantage in a tax rate drop, but there is a huge cost in increasing the compulsory employee payments that the exporter will have to come up with. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000132\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EYesterday I used the example of a business that was making a profit, and I used the example of a travel agency. I am no longer involved in those businesses, but I know enough about them to give members an example. In the travel business, labour costs are about 40 percent of the total top line. If a travel company is making a profit of 10 percent, it is doing well. But I am talking about exporters that are making no money right now. Let us take a business that has a $250,000 turnover, with labour costs of $100,000 and a $25,000 bottom line. That business would be paying tax right now of $8,250 at 33 percent, but the tax will be dropped to $7,500\u2014much lower, a $750 drop in taxation. That business, even if 50 percent of its employees take on the KiwiSaver programme, after it has taken on the tax credit that is available from the Government, will be having to front\u2014[Interruption] You cannot deny this, Mr Jones.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000133\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c50161c7ff734dfe98d61243bcdc2199\u0022\u003EThe ASSISTANT SPEAKER (H V Ross Robertson)\u003C/span\u003E: The member cannot use the word \u201Cyou\u201D; it refers to the Speaker.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000134\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226b3d592bf4a3485d86b85998839e1571\u0022\u003ECHRIS TREMAIN\u003C/span\u003E: My apologies. Mr Jones cannot deny that a company in that situation will be faced with additional costs for its business\u2014I ask him to tell that company that that will not be the case. In the case of small businesses, as soon as they get above an average pay of $25,000, for every dollar after that that is contributed, the employers will have to come up with the money themselves. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000135\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EThe Government tells us that it is not a problem, because it is 1 percent, 2 percent, 3 percent, and 4 percent. The Government tells us it is not a problem, and that the phase-in of the compulsory matching employer contributions will be taken into account in wage and salary bargaining, as is the case with the current campaign by the Engineering, Printing and Manufacturing Union. That is what we were told yesterday. The problem is that there are a couple of key things. The first point in that statement is that the Government expects\u2014[Interruption]; no, it does not guarantee that that will be the case\u2014that the phase-in of the compulsory, and members should note the word \u201Ccompulsory\u201D, matching employer contributions will be taken into account in wage and salary bargaining, as is the case in the current campaign by the Engineering, Printing and Manufacturing Union. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000136\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EHere is where we really see the sting in the tail. The Labour Government expects there will not be changes, but there are no guarantees. The employer contributions will now be compulsory. There is a huge difference here. The big difference is when one is on the other side of the negotiating table. Where we got to here is that when something is not compulsory, it is a bargaining chip, and that is what I said yesterday. When it is compulsory, it is a given. In this case now, the employee contribution, above the average pay of $25,000, is compulsory. So when employers are sitting around a bargaining table with their employees, do they think that employees will sit\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000137\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e14c4f33001d4683ab86b0fa6a501015\u0022\u003EDarren Hughes\u003C/span\u003E: National will adopt this policy before the next election. I guarantee it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000138\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002204f764ab4d474750965eae565d7fbdcc\u0022\u003ECHRIS TREMAIN\u003C/span\u003E: I ask Mr Hughes whether he honestly believes that employees and unions will sit on the other side of the negotiation table, now that it is compulsory for employers to make contributions, and say: \u201CThat is OK now. We won\u2019t take a pay rise.\u201D\u2014just out of good faith\u2014\u201CThat additional 1 percent will be fine.\u201D\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000139\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022be57c0f9de97404bb19d97c4b09e9f29\u0022\u003EDarren Hughes\u003C/span\u003E: It\u2019s not about no pay rise; it\u2019s about the rate of the pay rise. Look at what the Australians do, with a higher unionised workforce in Australia.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000140\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221c191345f7c94b24a055d45e92c0978b\u0022\u003ECHRIS TREMAIN\u003C/span\u003E: With the unionised situation they will not take account of the position that employers have to find themselves in\u2014they will not. There is a big difference\u2014a huge difference. The point I make today is that we are introducing additional costs to employers, and, particularly in the year of the exporter, to companies like Design Spun. Such companies, which are not making any money, will not benefit from a drop in the corporate tax rate. They will have to struggle on. But what we are getting is an increase in the costs and an increase in the payroll tax, so that businesses will face increased costs, thereby making it more difficult for them to export. I will find it easy to vote against that. Thank you, Mr Assistant Speaker.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022 data-id=\u002208cfc414bb344fbcbb13e9adc350c99e\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000141\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002208cfc414bb344fbcbb13e9adc350c99e\u0022\u003ESHANE JONES (Labour):\u003C/span\u003E Overnight a deluge of patriotism has graced the pages of the media that has been upholding our Budget. Why? Because people have finally seen the light: if they stick with the other side of the House, they not only will see their promises dashed but they will see economic confetti. People have confidence in this side of the House; they see that the Budget is not only addressing our more recent problems but laying down a pathway that they will be the first to ride upon. [Interruption]\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000142\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003ENational members have been told to come here, be noisy, and demonstrate that their greatest contribution at this tender stage of their career is to create noise and mayhem. Unfortunately for Mr Clarkson, but fortunately for the people of Tauranga, that noise as it rises is inversely related to the period of time he will spend in this House. It will be goodnight and haere r\u0101 for him.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000143\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002214ce29b4c8e0464ab9960dc635955ded\u0022\u003EDavid Bennett\u003C/span\u003E: Look in the mirror!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000144\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022985e8fe892c74c389c3d9d655437662a\u0022\u003ESHANE JONES\u003C/span\u003E: Our friend Mr Bennett came to the House mistakenly believing he could achieve a career by attacking our rangatira from Ng\u0101ti Wai, the leader of Aotearoa Tuatahi, Winston Peters. We, however, have noted\u2014and, I am sure, Winston has commented on\u2014that the more Mr Bennett talks, the more his head glistens. It is evident that the very healthy dosages of oil that he applies to his heavily lacquered head are not actually improving his prospects of recovering lost hair growth. His rhetoric and his intellectual contributions are as bald as his head. He is not like our other pakeke, who is the salt of the earth, a man of the land. He understands completely both ends of the dairy industry; the only one David Bennett from the Waikato understands is the udder he sucked on in order to get here. That is it\u2014never a truer word has been spoken. That is why we actually do not fear Mr Bennett. We will lament, however, with the people of Tauranga that in a passing fit of foolishness they sent Mr Clarkson here.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000145\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EI turn back to the Budget. Every single thing that we have offered here we know National will ape. I am not talking about physiological characteristics; I am talking about patterns of behaviour once we get close to the next election. For the 18 months we have been here, not one single original idea has flowed from the new people\u2014not one.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000146\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221fb8d8db-3e96-49c7-ab1c-b7916a50e30e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ad77afd4f49649ffbed552396a96909c\u0022\u003ESteve Chadwick\u003C/span\u003E: Just tax cuts.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000147\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cdda903ef5ef4f9280771589c4642a0f\u0022\u003ESHANE JONES\u003C/span\u003E: Oh yes, they have talked about tax cuts, but when we do cut tax, National is the first to vote against it. Secondly, National members complain that people are leaving to go to Australia. Of course, their rhetoric is adding to the reasons why those people want to flee. But we are providing a brilliant remedy that will cause many of those people to take up the stance of patriotism. That is what we have done, and it has been covered in the newspapers. Savings are to be deepened, thus building a wider and more handsome pool of capital to grow private enterprise and business. National members are just disappointed that this side of the House has been able to introduce a system that causes both employers and employees to accept the full range of their duties.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000148\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c16d0378a00a4c99aa94f318f47e9a49\u0022\u003EDavid Bennett\u003C/span\u003E: Oh, rubbish!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000149\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022008a59bda41147e9a95640a8bda7b5b1\u0022\u003ESHANE JONES\u003C/span\u003E: Absolutely! They know that in the 1990s there was a bare, Spartan approach that the market would take care of everything, and employers owed no obligations to anyone other than the shareholders. Fortunately, as a consequence of this Budget, employers, as time passes and once they are able to dismiss the confusion inside the rhetoric of the Opposition, will gladly embrace their responsibilities. More employees will have a greater sense of security going forward.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000150\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EI look forward to this bill coming to the Finance and Expenditure Committee, where I have no doubt that the more talented members on that side of the House will assume a very productive role. I refer to the rear members, not the fore members. Kia ora t\u0101tou.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u00225ff6ebf382454d64ae27001f4058105a\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill be now read a second time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 61\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 49; New Zealand First 7; United Future 2; Progressive 1; Independents: Copeland, Field.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 50\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 48; ACT New Zealand 2.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAbstentions 4\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EM\u0101ori Party 3.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EBill read a second time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000151\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022c16da666a67b42ee8ce91492002d773c\u0022\u003EIn Committee\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000152\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u00227d561beb5aa844eebd7fc433e890d275\u0022\u003EPart 1  Amendments to Income Tax Act 2004\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022 data-id=\u002265ede34182d34dcc82b23adc2e8a7420\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000153\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002265ede34182d34dcc82b23adc2e8a7420\u0022\u003EHon TONY RYALL (National\u2014Bay of Plenty):\u003C/span\u003E I am pleased to be able to take a call to oppose the progress of this bill, which, frankly, will not be good for New Zealanders. This is a bill that will send a very bad message to low-income New Zealanders. These are the people who cannot afford to save for their retirements. These are the people whom Labour came to Parliament to represent. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000154\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003ELet us think about those people who voted for Labour at the last election\u2014the few low-income people who voted for Labour at the last election. They find it difficult to make ends meet. They are working in jobs that in Australia would be paid one-third more.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000155\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224039b21a8aab4254b9437dfc0fcac692\u0022\u003EHon David Carter\u003C/span\u003E: More\u201450 percent more.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000156\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b8224c17ebd04da1a8343770c07f1901\u0022\u003EHon TONY RYALL\u003C/span\u003E: The Hon David Carter says they would be paid 50 percent more. They are people for whom $10 or $20 per week is a lot of money. In fact, one of my colleagues went to a breakfast today held by a public health association and a woman stood up and said that for $10 or $20 per week she could feed a family for 3 days. She asked whether the Labour Party realised that $20 per week pays for 10 loaves of bread, quite a number of eggs, and a lot of other produce that families can have. Those families are not in a position to take the benefits of the KiwiSaver scheme. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000157\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EI ask Labour members to take a call to explain to me how they will tell the people at the \u014Ctara flea market on Saturday that KiwiSaver incentives will work for them. What those people in \u014Ctara need are higher paid jobs and lower personal taxes. Those are what will get those people ahead: higher paid jobs and lower taxes. This bill provides neither of those. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000158\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EWhat this bill will do is actually lower their pay increases in the future, because Dr Cullen stood up and said that the compensation for the employer contributions will be pay increase sacrifice. So what happens if someone is one of those low-income people who cannot afford to save in KiwiSaver but his or her employer says they will not give him or her a pay increase because it is going into KiwiSaver contributions? I ask members to remember that this Government has all of these low-income workers tied up on multi-employer collective agreements, so what goes for one goes for the other, regardless of his or her circumstances. This Government is saying to those low-income people that when their multi-employer collective agreement is negotiated, their employer will hold back an increase in order to allow for the KiwiSaver contributions. But most of those people will not be making KiwiSaver contributions. They will not get the pay increase they need to help them and their families survive. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000159\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EWhat the Labour Government will say to those people at the \u014Ctara flea market this weekend, I do not know. What it will hope is that they have not worked out that all of this KiwiSaver hype\u2014all the hundreds of millions of dollars\u2014will do nothing to help low-income people, which the Labour Party says it represents. It will, in fact, harm the chances of hard-working people getting ahead. Because if somebody is in one of those low-income families\u2014as the woman was at the public health association\u2019s breakfast this morning, which was attended by Paula Bennett\u2014he or she wants lower taxes in order to get more money for the work that he or she does, and his or her wages to go up. This bill does not allow or provide for either of those things.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000160\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c518161ecd364964a5d47c8dc70c2b70\u0022\u003EDarren Hughes\u003C/span\u003E: What happens when you turn 65?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000161\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229757ab2e256a4c41a9605b4b8638357a\u0022\u003EHon TONY RYALL\u003C/span\u003E: Well, if someone has not contributed anything then there is no difference at all. What I will be really interested in hearing from the Labour members in this debate is how this bill matches Dr Cullen\u2019s comments that this will help the affordability of superannuation in the future. What does that mean? Do not forget that affordability of superannuation in the future is driven by national superannuation payments. National superannuation is not means tested. Will we end up with means testing based on one\u2019s contribution to KiwiSaver? That is the only way the Government can say that there is improved sustainability of national superannuation payments if it is going to means test the superannuation when people are 65. Is that what Labour means? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000162\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EHow can Dr Cullen say that this will contribute to sustainability of superannuation if it will not have any effect on national superannuation? It cannot contribute to the sustainability of superannuation payments by the public unless there is substitution of KiwiSaver income for national superannuation income. That would be breaching the political consensus across the divide on the universality of national superannuation. I suspect that is the code for what Dr Cullen meant when he said that this would enhance the sustainability of national superannuation into the future. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000163\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003ENational is strongly opposed to this bill. We believe that tax cuts will put more money in people\u2019s pockets, give them every incentive to work harder to get ahead under their own steam, and let them make decisions about their own money and its benefits to their families. This bill is not a tax cut, it is not tax relief; it is a money-go-round. It is not a free gift. New Zealanders are paying for this, and that simply cannot be right. It will cost business, and it will not be good for the overall status of many low-income New Zealanders. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000164\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EI am concerned. I want to hear from Labour members how somebody who cannot afford to save for his or her superannuation will benefit from this. I would like to see those low-income people getting the chance to get more money in their pockets for doing the same amount of work, I would like to see them getting every incentive to pocket some more for working harder, and I would like to see them getting a pay rise.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000165\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f3d17d64735048dca11ef423bcb3a95f\u0022\u003EDr the Hon Lockwood Smith\u003C/span\u003E: Whereas in Auckland they are going to pay a 10c petrol tax.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000166\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022788702cc538d436caec07991240a0fe5\u0022\u003EHon TONY RYALL\u003C/span\u003E: As Dr the Hon Lockwood Smith says, many of those low-income people in Auckland will now have to pay 10c petrol tax\u2014as we in other parts of New Zealand will as well, I suspect, from what is being proposed in this bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000167\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003ESo what the National Party says to the Government is very clear: reward incentive; do not discriminate against low-income people; give everybody the message that if they work hard then they will pocket more money, and that if they save and contribute then they will be respected\u2014but let us get those wages up. The Government does not understand that the most pressing issue for families today is that they can go to Australia and be paid 33 percent more than they are being paid here. That is an enormous gap. People can go to Australia and earn a whole lot more money. I think that every New Zealander would rather the Government was concentrating on closing that gap. It should forget about the other \u201Cclosing the gap\u201D it talks about, which is, incidentally, now being called \u201Creconciliation\u201D. We have gone from \u201Cclosing the gaps\u201D to \u201Creducing disparity\u201D to \u201Creconciliation\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000168\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EI think that the Waitangi Tribunal may be renamed the \u201CTruth and Reconciliation Tribunal\u201D, and, frankly, Helen Clark could never appear before it because \u201Ctruth\u201D is part of the title. What this Government needs to answer is: how will a low-income person in \u014Ctara benefit from this proposal versus lower taxes and a pay rise? Let the Labour Party members answer this question: under a highly centralised \u201CMECA-ised\u201D employment market, what happens if half the workers are in KiwiSaver and the other half are not, and the employer says: \u201CWe\u2019re taking 1 or 2 percent off the table for the pay negotiations this year, to pay for the KiwiSaver contribution. Michael Cullen said that was OK.\u201D? How is that going to work? Why should the person who is not in KiwiSaver miss out on a pay rise because the other half is in the scheme?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000169\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002272e48ab0-e7ae-427f-bedc-793b7a91adba\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228cf2e7b0caf1434d893b2fbbc08d5a94\u0022\u003EHon Mark Burton\u003C/span\u003E: Stop making it up.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000170\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226ed3c7a7870a415896d2cb35a42b21ab\u0022\u003EHon TONY RYALL\u003C/span\u003E: That is the guy who will soon be the former MP for Taupo. I have seen the polling. He will be going back to being the Rural Education Activities Programme coordinator in Taup\u014D in less than a year\u2019s time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000171\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b949fbc5551c440e9c486184a1462555\u0022\u003EHon David Carter\u003C/span\u003E: They won\u2019t want him.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000172\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002279ca91b5b8914ebaa94c7fe452c3b970\u0022\u003EHon TONY RYALL\u003C/span\u003E: Well, yes, they may not want him. It is a case of \u201Creap what ye sow.\u201D So, really, the important issue here is that the Government will not answer the questions. The questions are these. How do low-income people benefit? How will we deal, under a \u201CMECA-ised\u201D workforce, with giving some people a pay increase and not others? Why would people sacrifice the pay increases for some poor people for the others who are contributing to KiwiSaver? The third question is: is the Government going to means test national superannuation?\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022 data-id=\u002245447c1f524244bc9e59932358eb4cac\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000173\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002245447c1f524244bc9e59932358eb4cac\u0022\u003EHon DAVID CARTER (National):\u003C/span\u003E This morning the body language of the Labour members in this Chamber says it all. They came into the House yesterday for the reading of the Budget, and Dr Cullen had obviously conned them and told them that it was all good news and that it would correct the 10 percent poll differentiation between National and Labour. Darren Hughes nods his head and agrees. Then, when those members actually heard the Budget, and a few people who are a lot sharper than Darren Hughes analysed the Budget, particularly the KiwiSaver bit, it became clear that Dr Cullen has been too clever by half. We now know that he has presented a very complicated savings system that simply will not be accepted by most wage earners in this country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000174\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EThe interesting thing was that Helen Clark knew it by the time Dr Cullen had delivered the Budget. In her opening address, she stood up and said: \u201CIs that it? Is that it?\u201D. Helen Clark knows that Michael Cullen has now delivered his final Budget in this House. He has had eight chances to deliver a Budget that ensured growth for this country and he has had eight failures, one after another. He is gone, Darren Hughes is about to go, and the guy sitting next to him, Mark Burton, is definitely about to go, because KiwiSaver will not work. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000175\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EWhat I find sad is that a week earlier the Australian Budget was read. There, for the fifth Budget in a row, the Government has delivered tax cuts, real meaningful tax cuts, to the wage earners of Australia, to the extent now that anybody living in Australia\u2014and 1 million New Zealanders are living in Australia\u2014can earn 50 percent more in take-home pay. The two reasons, I tell Darren Hughes, are that wage rates are higher and now tax rates are significantly lower in Australia. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000176\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EWhat we see now is the KiwiSaver scheme presented to this country, and even Treasury says that 50 percent of New Zealanders will not take it up. I want Labour members to acknowledge today in this Committee which 50 percent that is. Low-income New Zealanders cannot afford to take it up and they will reject this scheme. So the ones who will take it up are the higher-income New Zealanders\u2014and by the way, they are pretty sensible people who are saving anyway. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000177\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EI feel for the people Tony Ryall just spoke about. Those are the people in \u014Ctara who are battling away with no support from this Labour Government. The people who went to the polls at the last election were dragged out of their State house, probably, by the union delegate and made to go and vote. They voted in good faith, thinking that Labour would look after them. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000178\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226ad40ce59aae423586e3df280d670e84\u0022\u003EDarren Hughes\u003C/span\u003E: What did they get in the Working for Families package, then?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000179\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002259994ac89b9d4c22a88fc24df720257b\u0022\u003EHon DAVID CARTER\u003C/span\u003E: And, here, Darren Hughes refuses to think about them. He is interested only in keeping his seat on the Government side of the Chamber, and he has less than 18 months to go before he is out of there and Nathan Guy is sitting in it. That is what will happen to Darren Hughes. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000180\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EWe see that KiwiSaver is delivering nothing to the people in \u014Ctara, and Dr Cullen, true to form, wants to hit them again. He has put in a Budget that gave them nothing in KiwiSaver but gave them a tax increase of 10c on their petrol. I remember sitting in the House in, I think, February 2002, under extraordinary urgency when that Government drove through a petrol tax of 5c a litre and said then that it was to fix Auckland\u2019s roads. There is already a tax of 5c a litre on petrol, and it was put on 5 years ago to fix Auckland\u2019s roads. Dr Cullen put that into his surpluses\u2014massive surpluses. He has not fixed Auckland\u2019s roads, he comes to the House with this go, and he says he will slam people with another 10c a litre. People will remember that, I say to Darren Hughes, even if he has forgotten it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000181\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EThe real issue in the KiwiSaver scheme is that it encourages people to leave this country. I remember when Don Brash used to say that 500 people a week get on a plane and leave New Zealand to go and live in Australia because it is so much more attractive. I thought that that was a huge figure and I wondered whether it was right. John Key told me the other day it was not right\u2014it is now 700 people. Every week 700 New Zealanders leave because of the Labour Government.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022 data-id=\u00227bbe58c10d8f4ff19e64975099f663eb\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000182\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00227bbe58c10d8f4ff19e64975099f663eb\u0022\u003ER DOUG WOOLERTON (NZ First):\u003C/span\u003E New Zealand First supports Part 1 of the Taxation (Annual Rates, Business Taxation, KiwiSaver, and Remedial Matters) Bill, and I am delighted to hear about the National Party\u2019s interest in the people of \u014Ctara. I am a bit saddened about the way that National members speak about them, as though they are an uneducated bunch of people who cannot work things out for themselves. The National Party I used to belong to many years ago actually did know about the people of \u014Ctara, and it would have supported tax cuts for companies, because it would have wanted to help companies to stay in New Zealand. It would have wanted New Zealand to be competitive with Australia. It would have wanted our companies to be competitive even in Europe, but competitiveness with Australia was just a given. So I cannot believe that the National Party has come to a point where it cannot support the reduction of taxation for companies, and cannot support the reduction of taxation, as contained in Part 1 of this bill, for what I call savings institutions\u2014I presume that people understand what they are\u2014which is where the money from KiwiSaver will be kept, looked after, and, hopefully, will grow. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000183\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EI cannot believe that the National Party is opposing those things, because it is through investment in our businesses that we all do better. The people who are leaving our country are, to me, absolutely a sign that some policies of past years have failed. I think that is a market signal that we can all work out. I think it is quite obvious. Furthermore, that market signal has been there for many, many years now. We have all talked about it and recognised it. It has been talked about in the Chamber, but this is the first Budget that recognises it and attempts to go some way towards catching up with the taxation regime for businesses in Australia and the trading regime in Australia. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000184\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EThe Opposition promotes itself as the so-called business-friendly party, so it is rather amusing to hear National members say on the one hand that Australia is a great place\u2014where the employer\u2019s contribution to the compulsory scheme equates to around 9 percent of labour costs, whereas the KiwiSaver scheme will be in the region of 1 percent\u2014and on the other hand that they oppose the bill. That cost of about 1 percent is laudable and it should be applauded in the Chamber. I also make the point that I have not heard one National Party member say that National would get rid of either the KiwiSaver scheme or the taxation reductions proposed in this bill. I suggest, most strongly, that is because National does not intend to get rid of either. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000185\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003ENew Zealand First is prepared to be quite upfront and to welcome the KiwiSaver scheme. We welcome the company tax deductions. We would like to see, as I am sure Mr Peter Dunne would want to see, further cuts in company taxation. This bill is a first step, and if we learn anything in this place we know that change is incremental. When change is not incremental, people cannot cope with things. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000186\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224483b6d37a22473ca02d3c20ec553b9f\u0022\u003EDavid Bennett\u003C/span\u003E: Tell that to superannuitants. Are you going to means test them?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000187\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002224a389a696a74bccb63496df7c721793\u0022\u003ER DOUG WOOLERTON\u003C/span\u003E: I tell Mr David Bennett that New Zealand First will make an issue out of superannuation at the next election. I challenge him and the party he is a member of to tell the people of New Zealand what National would do about superannuation if it were to become the Government at some stage. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022 data-id=\u00221c40fd83110d4d40afc9b3583932fd88\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000188\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00221c40fd83110d4d40afc9b3583932fd88\u0022\u003EJUDITH COLLINS (National\u2014Clevedon):\u003C/span\u003E It was very interesting to hear the representative from New Zealand First tell us that he supports this Budget, as I recall that in 2002 that party opposed the Budget because it had a fuel tax of 5c a litre. We hear today that New Zealand First supports this Budget, which has a fuel tax of 10c a litre. So that is inflation, is it not? Talk about a turn-round and flip-flop\u2014New Zealand First has just done a major one. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000189\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003EWhen I look at the cost of this Budget, I realise the people who are not going to benefit are the poor. In today\u2019s New Zealand Herald I saw comment from the unionist Laila Harr\u00E9. Do members remember her? The headline stated: \u201CWorkers party fails to help the poor\u201D. She is right on that one. There is nothing for people who are struggling, other than a 10c a litre increase in their fuel costs. That is what the Budget does for the people of Botany, for the people of Dannemore, and for the other people of east Auckland. There is nothing for them, except that they will get a 10 percent hike in their fuel bills. That cost will carry right the way through to food bills and to every other sector of the community\u2014to transport costs generally. That is exactly what the Budget means. Those people do not get access to a rail line; they get to pay for a rail line twice. They get to pay extra rates in order to pay for other people to use a rail line, and they get to pay higher fuel bills so that other people can get access to a rail line. That is simply not fair. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000190\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003EWhen I read on, I saw what Richard Prebble had to say. He pointed out that this Government is now taking $20 billion a year more out of New Zealand taxpayers than National did in 1999. Our taxpayers are now paying $20 billion that they should not have to pay. Richard Prebble is right. In that time, what has happened? We see 700 people leave this country every week to go and live in Australia, and they do so because there they are paid more, their taxes are less, and they have more incentive to save. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000191\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003EKiwiSaver will appeal to some people, that is for sure: people who are already saving money. When I heard Dr Cullen say yesterday that after 45 years of saving, people will have $400,000, I thought that may seem a lot of money. But I will tell the Committee something. In the early 1980s we bought our first house for $33,000. When we bought that house for $33,000, it was a really big stretch. Today that house, even without our improvements, would not sell for less than about $600,000. So if somebody is to be told that after 45 years of renting, he or she will be able to buy a house, I do not believe that is a legitimate promise to make. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000192\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003EIt is also unbelievably unfair for people to be told the Government will just take the money out and the person\u2019s employer will pay, and that will be great. It is not great, and the reason is that most businesses in New Zealand are those of small-business owners. Most people do not own their business through a company; most people pay a personal tax rate. Those people will receive nothing at all out of the deduction in company tax. What they will get, though, is to pay for the Government\u2019s election bribe. That is exactly what it will be. I think about people with small businesses in my electorate\u2014panel beaters and motor mechanics\u2014who will face another cost. What will happen? It will go straight to their accountant, and it will put up their compliance costs. Then, when employees go along and say they need some extra money because fuel costs have gone up, the boss will say: \u201CI\u2019d love to give you some extra money, but I\u2019m already giving it to you in KiwiSaver. Just remember that for every dollar that I have to give you now, I also have to top up your KiwiSaver. So how about we do a little deal?\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000193\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003EThat is what will happen. Little cash deals will happen, and little things like that will encourage tax avoidance. That will not help the system, at all. More people will be doing anything they can to get as much cash as possible out of the system, rather than going through the official system. This whole system is about making our taxation system more complicated. Taxation systems must be very, very simple.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022 data-id=\u002223681d5c5c55499c9c0ee7d83d4784ec\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000194\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002223681d5c5c55499c9c0ee7d83d4784ec\u0022\u003ECHRIS TREMAIN (National\u2014Napier):\u003C/span\u003E I rise to speak to Part 1, which deals with amendments to the Income Tax Act 2004, and particularly to speak about a couple of clauses that deal with tax credits for contributions made by people to the KiwiSaver scheme or a complying superannuation fund. That deals with the way the Government will help employees get a $20 contribution at the end of the financial year. The tax credit will apply to all contributions made, up to a maximum of $20 a week or $1,042.86 a year. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000195\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EOn the face of it that appears to be a good scheme, but the problem is that the average yearly wage is $45,000 in this country. That is the average wage, so I imagine the median wage would be significantly below $45,000. People on $45,000 cannot afford to save money, going forward. That is very typical of people living in Napier, where the median wage is well below the average of $45,000. Many people in my electorate are unable to save and will find they cannot afford to take 4 percent out of their wage to contribute to the scheme. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000196\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003ELet us look at what that 4 percent means. It is 4 percent of the gross wage, not the net wage. It is 4 percent of the gross wage but is deducted from the net wage, so it would be quite a significant chunk of their take-home pay. It is more like 5 to 6 percent. For people on $25,000 or $30,000 per annum who are bringing up a family and trying to get ahead, that is hard yards. No one in the Chamber sits on a low level of income, so we have to take into consideration the people on those incomes. The reality is that for the money we are talking about here\u2014$26,000 a year\u2014that is a $20 a week contribution. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000197\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EOut of a take-home pay of, say, $360 or $380, $20 is a significant amount. Rent might be $180 or $200, then there are power and electricity bills. Out of, say, $100 left over for food, $20 is significant. In fact, I would challenge anybody in this House to be able to save in that environment. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000198\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EIf it becomes impossible for those people to save, then the question is what we do as a country to lift the game for them. That is where the National Party comes in with a totally different tack from where the Labour Government is taking our country. It is a totally different tack. We take the tack that we need to put the handbrake on Government spending. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000199\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EWe saw the Minister of Finance, Michael Cullen, stand up and tell us how he was going to spend $54 billion on this nation\u2019s income. He stood up and told us how he was going to spend some 32 or 33 percent of the GDP of this country. There has been a $20 billion increase since the year 2000. He has the cheek to stand up here and tell low-income New Zealanders who are on $26,000 to $30,000 a year that they will now have to save money by putting aside $20 a week while this Government continues to crank up its spending. It has cranked up its spending by an additional $3.8 billion in this last Budget. The Government is saying that it is OK for the Government to spend big time, but it wants average Kiwis to save. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000200\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003ENational members say that that spending increase has to stop. It can continue to rise by the consumer price index level\u2014so we are not talking about massive cuts\u2014but we cannot keep adding to the fire of Government spending with continued increases. On top of that, National members say that we should take the Australian approach, with consistent and ongoing cuts to personal taxes. There should be consistent, gradual increases to cuts in personal taxes, so that Kiwis have the opportunity to invest their own money in the choices they want to make as people living in this country\u2014whether it is repaying their mortgage, investing in business, or investing in their family\u2019s education and trying to get them up the income ladder. Because, as I said earlier, if people are at the bottom of the ladder, then it is impossible for them to save $20 a week.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022 data-id=\u002211d7ed6b7b5a43ebb1220ed96ab4c357\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000201\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002211d7ed6b7b5a43ebb1220ed96ab4c357\u0022\u003EHon BILL ENGLISH (Deputy Leader\u2014National):\u003C/span\u003E I want to pick up from where the member for Napier, Chris Tremain, left off, when he made the point that for many New Zealanders the KiwiSaver scheme will be out of reach. He was reinforcing the point made earlier on by the co-leader of the M\u0101ori Party Tariana Turia. She made the pretty straightforward statement that if 50 percent of Kiwis take part in this scheme, it means that 50 percent do not. The 50 percent who do not take part are missing out every way around. Not only do they miss out on the now multibillion-dollar contribution by the Government to a personal savings account, but also\u2014probably worse than that\u2014they miss out on the changes to their tax thresholds, which at least would give them the cost of a packet of chewing gum a week. That is really what is hard to understand about this particular package of measures. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000202\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022be63626646674c0db2b2c08b8d95bdec\u0022\u003EShane Jones\u003C/span\u003E: You\u2019ll adopt it, though, Bill.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000203\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022bd40762d51bd4b85b27ef8f999fa6947\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: We certainly will not adopt that bit. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000204\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWhy did the Government decide that, with a large surplus, it was not going to follow through on the promises it had made for the last two Budgets to allow for changes in income tax thresholds because of inflation? That would have put some money in the pocket of every low-income and middle-income earner in this country. Out of mean-mindedness, or some other motive that the member from the Hutt Valley could no doubt tell us about, the Government decided to pull back the change in income tax thresholds, which has the effect of excluding at least 50 percent of New Zealanders\u2014and in the next couple of years probably more than that\u2014from any benefits at all from this Budget. I cannot understand the political logic of it, nor can I understand the economic logic of it, actually. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000205\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EI would like the Government to explain it. If the Government is willing to put through a tax credit\u2014which is not actually a tax credit\u2014of $20 per week when employees contribute, then why is it not willing to give them $5 a week as a tax reduction which it had already promised? I am sure many New Zealanders out there will themselves be asking that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000206\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThere is no doubt who supports this Budget or who is keener on what is in it: higher-income New Zealanders. It is quite clear that that is who supports this Budget. The people who are represented by the M\u0101ori Party\u2014what is in it for them? We are going to hear a lot of talk from Labour about engaging low-income people in KiwiSaver, but the raw facts of the matter are pretty straightforward: one has to give up spending in order to take part. This is where Dr Cullen is having trouble with the consistency of his message. He is trying to say that this whole package is going to lead to big increases in savings but no reductions in household spending. If he had the courage of his convictions, he would have made the whole thing compulsory. But of course he did not do that, because he knows he would then collect the blame from every single household in New Zealand for confiscating some of their weekly pay so that they can have it back when they are 65. At least this way New Zealanders have to put up their hand to volunteer for it. But the effect is the same. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000207\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Government has decided that low-income and middle-income people who cannot afford to save have to just stick it. They have to just stick it. They cannot afford to save, so they do not get either the benefit of the employer contribution or the benefit of the Government contribution, and they miss out on the reduction in taxes that was promised to them in the last two Budgets. Now, worse than that, they are going to be caught up in confusing industrial relations negotiations over pay, because some people in the workplace may opt into the scheme, and the Government is compelling the employer to put any prospective pay rise into the employees\u2019 savings accounts. If some workers do not opt in, what will happen then? Those people may face no increases in pay and may not even get the benefit of the employer\u2019s contribution either. That is a price that Labour is going to become much more aware of over the next 6 months as the reality of semi-compulsory savings bites.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00224a11ce4e-9fb3-4738-b0be-5a9f81d975da\u0022 data-id=\u0022df81eab79428462a805f836988aefbb0\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000208\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a11ce4e-9fb3-4738-b0be-5a9f81d975da\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022df81eab79428462a805f836988aefbb0\u0022\u003EHon MAURICE WILLIAMSON (National\u2014Pakuranga):\u003C/span\u003E It is usual for members of Parliament to have quite a bit of feedback sent to our electorate offices the morning after a Budget. When there are things in the Budget that are good, members will often hear people saying it was great that they happened. I can report immediately to the Chamber that the feedback I have received from the people of Howick and Pakuranga is that of sheer outrage. They have never had access to a rail network and never will have. Even those who are quite green in their feelings, and would love to use a rail network if they could, simply do not have one. They simply do not have one. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000209\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a11ce4e-9fb3-4738-b0be-5a9f81d975da\u0022\u003EIt is really interesting. Outside my electorate office is the Pakuranga Highway\u2014a three-lane highway\u2014and in the mornings I look out to see cars just locked, blocked, and stopped as far as the eye can see. Guess what? Yesterday Dr Cullen said to those people that he would charge them another 10c a litre on their petrol tax in order to pay for the electrification of a rail network somewhere on the other side of the city. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000210\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a11ce4e-9fb3-4738-b0be-5a9f81d975da\u0022\u003EThat went down like a cup of cold sick with the people of Howick and Pakuranga, and I bet it was the same with the voters of the North Shore, Northcote, Murray McCully\u2019s East Coast Bays, and Judith Collins\u2019 area of Clevedon, Beachlands, and Maraetai. People in those Auckland regions will be saying to the Government: \u201CExcuse me? You are going to tax me to pay for the electrification of a rail network that I don\u2019t have any access to at all, even if I want access to it?\u201D. That is what the feedback from those people has been. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000211\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a11ce4e-9fb3-4738-b0be-5a9f81d975da\u0022\u003EI have to speak on behalf of what may end up being a new constituency block for me. I may, with boundary changes, end up with some people from the Glen Innes and Point England areas. I have not had contact with those people yet, because the boundaries may not be changed, but they may end up in my constituency. I understand that those people are mainly Labour voters, but I can tell the Labour Government that they will be pretty angry about what happened yesterday, as well. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000212\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a11ce4e-9fb3-4738-b0be-5a9f81d975da\u0022\u003EI know for a fact from the levels of household debt being accumulated by people in areas like that that they do not have one cent of spare discretionary income each week to put into anything. What with hire purchase payments, their budget does not exist. Their budget is blown to pieces each week, and they struggle from day to day to make ends meet. If not, they are accumulating debt on their credit cards. Often we hear people in Glen Innes say they have maxed out on their credit cards. These are the people whom Dr Cullen should be representing. They are not the people whom the Tory party would normally be out there speaking on behalf of. That is why this Budget will not go down well with Labour voters. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000213\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a11ce4e-9fb3-4738-b0be-5a9f81d975da\u0022\u003EDr Cullen says to those people who do not have a cent of discretionary expenditure that if they save some money each week, then they will get into this KiwiSaver scheme, and the Government and the employers will put some money in, and that will be good for them. I can tell members now that if Trevor Mallard wants to come with me and wander the streets of Glen Innes or Point England, the very first response he will get from those people will be: \u201CHow the bloody hell do I save anything when I can\u2019t save already?\u201D. They will ask how they can save a cent, how they can have money taken off their pay and put into a KiwiSaver account. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000214\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a11ce4e-9fb3-4738-b0be-5a9f81d975da\u0022\u003EA lot of people in my current patch of Howick and Pakuranga will say they have enough discretionary spending to put 4 percent of their pay into the scheme. They are in the wealthier, higher-income end, and they will say they are OK with this. They will say that they can do with this scheme, and that it is fine\u2014they will provide 4 percent of their pay, and their employers and the Government will tip in some money. They will say that it is not a bad idea. But what about the people at the bottom end of the spectrum whom the Labour Government is supposed to be an advocate for?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000215\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002279db8b64-1f9b-4416-9b81-a12963db9cbf\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002239362103ecd945c391ebf664eebe3fe8\u0022\u003EHon Trevor Mallard\u003C/span\u003E: What about the workers?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000216\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a11ce4e-9fb3-4738-b0be-5a9f81d975da\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fd2818ec6dfd47108da5f7a46b72d6c9\u0022\u003EHon MAURICE WILLIAMSON\u003C/span\u003E: Absolutely; Trevor Mallard has called the question right. There we are, \u201CStadium Boy\u201D has made the right call for once; \u201CStadium Boy\u201D has it right. What about the workers? Well, the workers have been shafted even more than Auckland was over the stadium\u2014and, boy, that was the biggest shafting I have ever seen. The workers are being absolutely shafted. Any of the workers who are listening out there, all those people who are sitting out in the workshops of the South Auckland factories now, hanging on every word that Parliament is broadcasting into those factories\u2014and there will be thousands of them\u2014will be asking: \u201CHang on, why is Trevor Mallard yelling out \u2018What about the workers?\u2019, when what he did yesterday shafted those of us at the low end?\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000217\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a11ce4e-9fb3-4738-b0be-5a9f81d975da\u0022\u003EThat is what KiwiSaver is: it is a nice little welfare benefit for those on a high income, or those with a bit of discretionary expenditure or a few bob that they can put away, and it is an absolute kick in the guts for people down at the bottom end. That is the point National is trying to make. This Budget is best typified by the old Joe Hill days of the trade unions. \u201CPie in the sky when you die\u201D\u2014that is what people will get.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022 data-id=\u0022ed673f1f1dd54fd4b9a87fae16d61e0d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000218\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022ed673f1f1dd54fd4b9a87fae16d61e0d\u0022\u003ESHANE JONES (Labour):\u003C/span\u003E Let us return to what we are actually gathered here for, which is to talk about the Budget, and let us recite some recent history. In 1967 dollars and cents came to New Zealand as our currency. The point at which we moved from the pound and the ha\u2019penny to our current currency, I say to all listeners out there in Aotearoa, marks how far we have to go back to identify a time when National members actually introduced a tax reduction for company tax. In all the years since 1966-67, National members have not brought to this House a bill or a proposal to reduce the tax burdens on company tax. That is a statement of fact. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000219\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a11ce4e-9fb3-4738-b0be-5a9f81d975da\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228c10ea9660194ea2af76629291119c69\u0022\u003EHon Maurice Williamson\u003C/span\u003E: But you give with one hand and take with the other.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000220\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b34e209626e44abdab3c4df99e6c14ff\u0022\u003ESHANE JONES\u003C/span\u003E: Those members had the opportunity in the 1990s\u2014when my very good, and friendly, co-watcher of rugby, Mr Williamson, was in power\u2014to change that tax rate. The facts betray them; despite the rhetoric, those members did not reduce the company tax burden. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000221\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003ELet us look at what Labour has done in relation to the specific steps we have taken. Within the same period of time, our friends the toilers in the company world, the toilers in the firms, and the toilers in the world of enterprise, with regard to the burden of tax placed on their shoulders, have enjoyed a reduction of 33 percent\u201433 percent, I say to Mr Carter. Up in Kerikeri, Dargaville and the Northern Wairoa, Kaikohe, and Kait\u0101ia, people are clapping and singing praises. They cannot believe that not only have we come good on our promise but we have also gone further than that. We have addressed those long-term problems of bottlenecked, degraded infrastructure in Auckland.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000222\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EOf course, the people of Auckland need to participate democratically in their regional council, because regional councils, I say to Mr Woolerton, have a critical role to play as to what, when, and at what level this petrol tax would be imposed. It is entirely up to them because this is democracy flourishing, in the context of the Budget. The decision, I say to Mr Carter, moves to the level of the community most impacted on by the ongoing clogging and problems that Mr Williamson talks about, but the facts show that when Mr Williamson had the chance, he did not move to remedy the problem.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000223\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003ESo I would say to all listeners in Aotearoa that over the same period of time that National members did nothing with the company tax rate, Labour has reduced that tax rate by a third. This Budget lays out what will happen when we go forward beyond this year\u2014for all political spectators, all citizenry, and all firms\u2014and it is a clear platform upon which National is looking forward to a fight between ourselves and its team, which has at least found someone who is willing to give it a go. For the last 9 or 10 years we have had a game of sport under way, but there has never been a team on the other side that has been anywhere near match-fit\u2014no. Now, at least, there is someone who might be. Admittedly, we believe that he has filched our garb. He never has an original idea and wanders around the country talking about things that he will quickly toss out, but he borrows liberally from this side of the Chamber as to what his party\u2019s ideas are. We understand that. As I said last night, that is very predictable. Ah, Polonius has come back to the Chamber, no doubt to strike more poses. You know, a good poser will never overcome the presence of vacuity, and that is what that member ought to remember.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000224\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EHowever, let me continue. Not only have we allowed regional councils to play a key role, and not only have we forged ahead and rewarded the toilers in the world of private enterprise and companies, but also\u2014and the members on the other side of the Chamber do not realise this\u2014we know that the pit within which low-income people fell was traceable back to National\u2019s time in Government, when those members held authority. Step by step, I say to Mr Woolerton, along with our great friends from Aotearoa Tuatahi, who have vigilantly watched the importance of savings, we will take low-income people out of that pit. I look forward to that party joining with us some more.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00226984d661-9f65-4ed6-b29c-3285b598582d\u0022 data-id=\u002268cdce566d544f059e9842589f50aec2\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000225\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226984d661-9f65-4ed6-b29c-3285b598582d\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002268cdce566d544f059e9842589f50aec2\u0022\u003EJOHN CARTER (National\u2014Northland):\u003C/span\u003E It gives me great pleasure to follow the Tory in the Labour Party, Shane Jones. You know, Shane Jones and I are Northland MPs, and along with the other MPs from that area, we all work well in the Northland scene. But the unfortunate thing with Shane Jones is that when he decided to get into politics, he tripped over and fell into the wrong party, because underneath it all, he is a Tory at heart, and he hates having to defend this Budget. If one can get Shane Jones in the quiet, in the back room somewhere, he will say: \u201CMan, I just do not know where we are going.\u201D Here he is, and we could see the lacklustre effort that he put in when he was trying to defend this Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000226\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226984d661-9f65-4ed6-b29c-3285b598582d\u0022\u003EI am really looking forward to the next election campaign and being on the campaign trail with Shane Jones, because I would ask him three questions about this Budget that affect the people of Northland. The first thing is that he is out there saying that Labour has done it for business. Well, when we look at it, it may be that Labour did do just a little bit for business\u2014until we actually start doing the maths. Then the only way we can say that businesses got an increase is if we stand on our heads, and the figures will then go up the right way. The fact is that businesses will pay. Labour gives it to them on the one hand and it takes it away on the other. That is the first point. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000227\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226984d661-9f65-4ed6-b29c-3285b598582d\u0022\u003E My second point, though\u2014and this is the point I really want to ask Shane about\u2014is that he talks about the fact that KiwiSaver will be great. He talks about the fact that it will work for people in Northland, and he talks about businesses. Well, you know, in Northland most of the businesses are sole traders; they are not companies, they are small, individual people who have gone out and taken a chance. They have gone out and had a go. They are standing up as we would expect New Zealanders\u2014good Kiwi people\u2014to do. They are men and women, out there having a go. But what will this legislation do for them? It will penalise them, will it not? It will cause them cost; they will have to pay. They will not get any benefit from the reduced company taxes\u2014they do not pay them. But if they are employers\u2014and most of them are employers of one or two people\u2014and they are paying wages of, let us say, $60,000, they will have to pay something like $3,000. Whatever the figure is, it will cost them money. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000228\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226984d661-9f65-4ed6-b29c-3285b598582d\u0022\u003EHow will that benefit or encourage the small-business people in Northland? It will not help them at all. In fact, it is a negative for them. Just maybe it will tip them over the edge. In Northland a good number of businesses are right on the edge\u2014they go from hand to mouth, and they just keep going. They make it, they work hard, they do all the things they can, and now the Government comes along and says: \u201CWell, here\u2019s another bill, and here\u2019s another tax. You are going to have to pay. You are going to have to front up.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000229\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226984d661-9f65-4ed6-b29c-3285b598582d\u0022\u003EWhat about the people who work in the Moerewa freezing works? What about the people who work in kiwifruit businesses in Kerikeri? What about the small people who work driving a school bus to Mangamuka? What will they get out of this? They will get absolutely nothing. The fact is that they will get nothing out of it because they cannot afford to take anything from it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000230\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226984d661-9f65-4ed6-b29c-3285b598582d\u0022\u003EHow much surplus cash does the person who is earning $18,000 a year have hanging around to put into KiwiSaver? Negative\u2014they have no surplus cash at all. I say to Mr Mallard and Mr Shane Jones that these people do not have a spare cent to put into KiwiSaver. So what is their only option? They will opt out\u2014they have to opt out. This legislation does not help the people of Northland. I know a young fella up there who has just started working at Pak \u2018N Save. He has a partner and a child, and a second child on the way. He earns $15 an hour. He is doing well and getting himself established, but man, he sure ain\u2019t got any surplus cash to pick up his share of what Michael Cullen says he should have. That is the shame of it. This young lad wants to buy his own home. This young lad is having a go. This young lad is actually trying to make a go of a life for himself here in New Zealand, and this Government has done absolutely nothing for him in this Budget.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f9a94bf3-a948-4410-8413-403a7454114b\u0022 data-id=\u0022bf8d1404b5f54c15a16e648db453cbb8\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000231\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9a94bf3-a948-4410-8413-403a7454114b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022bf8d1404b5f54c15a16e648db453cbb8\u0022\u003ETIM BARNETT (Senior Whip\u2014Labour):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u00220ab75b55534b49d39804320b59b4f77c\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That the question be now put.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 63\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 49; New Zealand First 7; United Future 2; ACT New Zealand 2; Progressive 1; Independents: Copeland, Field.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 48\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 48.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAbstentions 3\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EM\u0101ori Party 3.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EMotion agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000232\u0022\u003EPart 1 agreed to.\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000233\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u00221a5a20502dd74bfb8035546ff2a02d26\u0022\u003EPart 2  Amendments to other Acts and Regulations\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022 data-id=\u00227478f6ea471342208aaaa8e112df250e\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000234\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00227478f6ea471342208aaaa8e112df250e\u0022\u003EHon DAVID CARTER (National):\u003C/span\u003E I certainly want to speak to Part 2 of the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill because, looking through this really complex legislation that the Hon Peter Dunne and the Hon Michael Cullen have cooked up, it springs to mind that one important question has not been asked in the debate so far. I would ask how many more Inland Revenue Department officials will be employed to manage this extremely complex KiwiSaver scheme. How many more high-rise buildings in Wellington will be filled with Inland Revenue Department officials who have to work through the complexity of a scheme that even Treasury, which is known for its optimism in floating the scheme, says that only 50 percent of wage earners will take up? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000235\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EWith this legislation, we will have a scheme whereby come 1 July employers must, by law, sign up everybody who works for them. All the wage calculations will have to be redone. Many people in New Zealand farming situations are paid on a regular basis with an automatic payment. Those payments will all have to be changed. There will be huge complexity for the employer, huge confusion for the employee, and lots and lots of bureaucrats trying to sort it out. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000236\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EAn employee is signed on to a scheme, presumably a little tagged account is opened in KiwiSaver for this person, and 2 weeks later this lower-income New Zealander will say: \u201CI like the idea of it, but I simply cannot afford to stay in.\u201D So this person will go back to the employer and ask to be taken out of the scheme. Treasury is saying that 50 percent of employees will take this option; I say to Peter Dunne today that it will be more than 50 percent, judging by the calls coming into my electorate office this morning. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000237\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003ESo once this employee asks to be taken out, the poor old employer will have to go back and recalculate the wages and PAYE deductions, and will have to go back to the bank, where the employer will probably incur a charge to change it back to what it was prior to 1 July 2007. Then the Inland Revenue Department\u2014with its hundreds more bureaucrats\u2014will have to post out a cheque to the employee for the $20 or $40 that has gone into the account in the couple of weeks before the employee made the decision that he or she could not stay in the scheme. That sounds incredibly complex and incredibly stupid. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000238\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EWe can see the shock on the faces of the New Zealand First members, who have only just realised that this will happen. Yet they are signed up to support this nonsense. Labour members have not even thought this through. Michael Cullen has\u2014this scheme employs lots of bureaucrats; that does not seem to worry him\u2014but the Labour members themselves obviously have not realised how complicated it is. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000239\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EThat is why we saw Dr Cullen getting a really hard time on Close Up last night. Then he came down to the House at about 8 o\u2019clock last night and lost his rag because he knew he had lost the argument with John Key on the benefits of the KiwiSaver. He knew then that New Zealanders had not swallowed it hook, line, and sinker. He has been too clever by half, and has stuck something in here that his own Labour caucus simply does not understand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000240\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EToday, when we analyse this scheme in detail, we realise just how massively complicated it is and how much more Inland Revenue Department bureaucracy we will have to build to manage something that in a couple of weeks will revert to the status quo for low-income New Zealanders. Peter Dunne, instead of sitting there, should actually stand up and defend this legislation. He is part of the design of the thing. He will go down as being attached to the folly of Dr Cullen for the KiwiSaver scheme, which will not work. It will not work, because lower-paid New Zealanders simply cannot afford to stay in the scheme.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000241\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E I look at the complexity of the Dr Cullen scheme and at the simplicity of the scheme of Peter Costello, Treasurer for the Australian Government. He has come in with five Budgets, one after another in a row, and he has been able to simplify the tax system by delivering tax cuts and giving the chance for wage earners in Australia to keep more of their own money. But no, Dr Cullen says: \u201CThat would be wrong, we cannot leave that money in the hands of New Zealanders.\u201D, and says that he can do better.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002259e9efe2-6dea-4eeb-869a-ef5b3e48a5b5\u0022 data-id=\u0022d7849d0ede824584903efb0eee695955\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000242\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002259e9efe2-6dea-4eeb-869a-ef5b3e48a5b5\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022d7849d0ede824584903efb0eee695955\u0022\u003ECHARLES CHAUVEL (Labour):\u003C/span\u003E I want to speak just briefly in support of the bill and to take some real-world examples, in response to some of the issues that have been raised by previous speakers. I am looking at the second page of this morning\u2019s Dominion Post, where a couple of calculations really give the lie to some of the sillier claims we have just heard. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000243\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002259e9efe2-6dea-4eeb-869a-ef5b3e48a5b5\u0022\u003EThere is the example of a single person on the minimum wage, earning $11.25 an hour or $450 a week. If that person decides to join KiwiSaver on 1 July, he or she will have to put away $18 a week. We have heard, from polls and surveys of people\u2019s savings habits and intentions, that people really want to be able to save, and they really want incentives to join this scheme. I think that many New Zealanders, even if they are on modest incomes, will look at that requirement of $18 a week, look at the incentives that now exist\u2014or that will exist when this legislation passes\u2014and will think they will make a real effort to put that sort of money aside. Now if that person puts $18 a week aside, which is the minimum contribution\u20144 percent of gross salary\u2014then the Government would add, under this legislation, another $18. From 1 April next year the employer will pay $4.50 a week. Then, stepping up the scheme, by 2011 the employer would have to match the contributions up to 4 percent. Assuming that the person retired in 35 years, there would be $150,000 in the bank, which is enough to earn about $8,000 a year in interest in today\u2019s dollars. That assumes a very conservative rate of return on the funds of about 2.5 percent. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000244\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002259e9efe2-6dea-4eeb-869a-ef5b3e48a5b5\u0022\u003EIt seems to me that there will probably be quite a high uptake of the scheme if those figures are correct. People have been crying out for some assistance and some incentivisation to help them to save. That will now exist, and it is the answer to the question of what the kiwifruit worker in Kerikeri or the school bus driver would do\u2014questions that John Carter raised earlier. That is a living example of the figures those people will have to think about in order to join the scheme and of the benefits that they will get. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000245\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002259e9efe2-6dea-4eeb-869a-ef5b3e48a5b5\u0022\u003EThere is another example: that of a single person on the average wage. If a 50-year-old who earns a gross salary of $45,000 contributes 8 percent, which is about $70 a week, by the time that person retires at 65 there will be accumulated funds of $110,000, which is enough to generate $8,000 a year during retirement over and above the superannuation contribution. Now that is real money. It is the sort of fund that people have been wanting to build up\u2014the sort of nest egg that ordinary Kiwis would like to have but that they have not had the assistance or wherewithal to put together. I am very proud that this legislation and the accompanying package will allow that to happen. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000246\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002259e9efe2-6dea-4eeb-869a-ef5b3e48a5b5\u0022\u003EThis scheme will be good not only for the average Kiwi worker but for the country. If members look at the projection of the funds that will be built up over time, they will see that KiwiSaver funds under management by about 2030, again assuming a very conservative rate of return\u20142.5 percent\u2014will be $100 billion. Now when members look at that and at the Cullen fund, they will start to see a strategic reserve for the first time being built up in this country, and will understand the importance of saving. Of course, we know about the wider economic benefits of having a decent savings scheme and a decent capital fund such as this. We will have stronger and deeper capital markets, leading to a lower cost of capital over time and easier access to capital for New Zealand businesses. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000247\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002259e9efe2-6dea-4eeb-869a-ef5b3e48a5b5\u0022\u003EThe scheme will also reduce the pressure of inflation. We know we have a current account problem. Well, finally, we have the opportunity not only to help ordinary Kiwis but also to build up the sorts of strategic reserves that our neighbours across the Tasman, whom we have heard about in speeches today, did some time ago. It was interesting to hear the model from across the Tasman being idolised by David Carter, the previous speaker. I wonder whether that means he wants the Australian model of a 9 percent payroll tax on employers, rather than the sort of scheme that has been designed for New Zealand and will be presented through this legislation. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000248\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002259e9efe2-6dea-4eeb-869a-ef5b3e48a5b5\u0022\u003ELike the rest of this Budget, this is good legislation for ordinary Kiwis, for the country, and for all of us.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022 data-id=\u00224985f57be2e14791a51f82c77655c4f9\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000249\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00224985f57be2e14791a51f82c77655c4f9\u0022\u003EHon BILL ENGLISH (Deputy Leader\u2014National):\u003C/span\u003E The member Charles Chauvel, who thinks he will be the member for Wellington Central, but he will not be, demonstrated the kind of cargo cult that Labour is trying to build up around the KiwiSaver system. It is only Labour people with that kind of champagne socialism attitude who think people on $11.25 an hour are saying: \u201COh yeah, I\u2019d love to put away $18 a week.\u201D People on $11.25 an hour are the last people who will go into the KiwiSaver scheme, and they are also the first people who missed out in this Budget. If the Government had kept its promise to move the tax thresholds to allow for inflation, people on $11.25 an hour would at least have received something\u2014it may have been chewing gum, but at least they would have received $2 or $3 a week. This would have been some recognition that they are paying a bigger percentage of their income as tax than they were 5 years ago, simply because of inflation and a lazy, big-spending Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000250\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe reality, I say to that member, is actually much different from the cargo-cult mentality that he is trying to cultivate. People on $11.25 an hour, even people on $15.25 an hour, will be the least likely to opt in to KiwiSaver. The Government\u2019s message to those on $11.25 an hour is \u201CCut your spending, profligate!\u201D. The Government says that these people are the ones who are causing inflation, the ones driving up the housing market. The Government is telling people on $11.25 an hour to cut their spending because they are part of the savings problem. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000251\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EI guess that would have some credibility if the Government was cutting its spending. But, of course, it is not. There is a record new spend in this Budget; it has never been $3.8 billion before. It will be $3 billion or $4 billion next year. Is that not typical? This is champagne socialism. People on low incomes have to cut their spending to be patriotic, while MPs and bureaucrats on high incomes go on spending up large, taking money out of their cash deposits in the bank and shifting it into KiwiSaver, with no increase in their rate of saving. What a hardship! They are thinking: \u201CThis is a terrible scheme; we will have to shift some money around.\u201D\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000252\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe Labour MPs believe Dr Cullen, who has told them this scheme will create a whole lot of new savings. Well, it will not. There are only two ways to get more savings into KiwiSaver: to shift it from somewhere else, or to spend less. Labour are telling us today that the people they expect to spend less are the ones on $11.25 an hour. Well, I invite Mr Chauvel to get out to the supermarkets and tell the people stacking the shelves and serving on the counters that Labour\u2019s vision for them is to give up $18 a week\u2014and give up all prospect of pay increases for the next 4 years, because the employer has been compelled to put the pay increase into their KiwiSaver account\u2014and get it all back in 40 years\u2019 time. I invite Mr Chauvel to come with me to the supermarkets around Wellington. We will get all the staff in the morning tearoom and tell them the truth: that Labour says: \u201CPut $18 a week into an account. We can promise you jam in 40 years\u2019 time if you give up your bread now.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000253\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThat is why, yesterday, Labour members were looking really worried about this scheme, because they know what a big gamble it is. The people who will take the tax advantages of this scheme vote National. They will bank it\u2014they will. Their accountants are all on the job today. But the low-income person and the small employer have been ambushed. Small employers have been ambushed by the compulsory contributions, which they never expected, and which come just after they have had to find the money for the 4-week holiday and the time-in-lieu provisions of the Holidays Act. Low-income people have been ambushed by a Labour Government they thought supported them. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00221a705910-5320-43bf-aa82-027a761519f6\u0022 data-id=\u00229afe5adb1eb644719379450c0745648f\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000254\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221a705910-5320-43bf-aa82-027a761519f6\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00229afe5adb1eb644719379450c0745648f\u0022\u003ERUSSELL FAIRBROTHER (Labour):\u003C/span\u003E The difference between the National Party in the last speech, given by its deputy leader, and this Labour Government is that this is a Government that does not believe that a section of the economy should be permanently parked on $11.25 an hour. The changes to KiwiSaver are the first and important step to lifting the incomes of our lower-paid people to a higher range of brackets. It has been done in many ways, such as increasing the funds for research and development to increase the skill base of our Kiwi businesses. I notice that John Shewan, writing this morning, welcomes the 45 percent subsidy by the Government on research and development, and notes that it is urgently needed and will be great for investment. The editorial in the Dominion Post this morning also writes of welcoming research and development, and also welcomes investment into the superannuation scheme, noting that if there had been a tax cut instead, it would have merely fuelled inflation. We know whom the fuelling of inflation would assist\u2014the very people National wants to support by voting against this bill today. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000255\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221a705910-5320-43bf-aa82-027a761519f6\u0022\u003EIt is not true to say that this bill supports National Party voters. If that were true, National would vote for the bill. But it is voting against the bill, because its members know that the overall picture enhances the welfare of so many New Zealanders, including those currently on $11.25 an hour. In fact, those on $11.25 an hour will get two tax cuts from this part of this bill. They will get a $20 contribution as soon as they make their $20 payments, and then as the money is invested in a portfolio investment entity, that entity\u2019s investment rate will come down from a 33c tax rate to a 30c rate. So there are two levels of tax cuts for the lower-income people who put money into KiwiSaver. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000256\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221a705910-5320-43bf-aa82-027a761519f6\u0022\u003EI want briefly to address the point raised by David Carter, who claimed that this legislation would increase the level of complication, and who saw us increasing the level of expenditure on civil servants. I draw the member\u2019s attention to clause 54, in Part 2. That clause provides for the electronic furnishing of returns, which of course is now a well-established practice for the Inland Revenue Department, and which will extend to the KiwiSaver provision. So as the computers in employers\u2019 offices and the Inland Revenue Department become clearly able to interface, it will ease the workload on both the offices of employers and the Inland Revenue Department. When David Carter made that trite and ill-considered criticism, he failed to address Part 2 of this bill, which includes clause 54. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000257\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221a705910-5320-43bf-aa82-027a761519f6\u0022\u003EI will talk briefly about how KiwiSaver will help those on lower incomes. But first of all I will remove this myth that has been bandied around today that 50 percent of New Zealand workers will not be able to take part in the KiwiSaver scheme.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000258\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229c9c7d79b5ed4ae9acf58933fef3140b\u0022\u003EHon Member\u003C/span\u003E: That\u2019s what your own Government says.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000259\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221a705910-5320-43bf-aa82-027a761519f6\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b0eacc77c13e4467949cf2300ee0272b\u0022\u003ERUSSELL FAIRBROTHER\u003C/span\u003E: No, it does not; the members should read the papers more carefully. The scheme has been launched on the basis that there will be a 50 percent uptake. There are no figures at all to suggest that that 50 percent uptake will omit lower-paid workers. Maybe the best standard to consider is what the uptake is at present in other schemes that are voluntary, and 50 percent seems to be about the norm. Of course, if National members were so confident in their rhetoric, they would be voting for the bill if that 50 percent were to come from their voters. But they know that the voters who will be most advantaged from this scheme are those who find it, at present, difficult to save. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000260\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221a705910-5320-43bf-aa82-027a761519f6\u0022\u003EEvery person who joins KiwiSaver and puts in $20 a week will get $60. There is no better return in this country for anybody who can pay $20 a week than to get a $60 return straight away. That is a simple truth. And that is the advantage of Part 2, because it brings the scheme into reality for everyone who has trouble in saving. It is not a scheme necessarily for the rich and the wealthy; it is a scheme for mums and dads, and for young people who are considering the need to provide for their future. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000261\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221a705910-5320-43bf-aa82-027a761519f6\u0022\u003ESo what does Part 2 do? It sets up the framework so that if a couple on an average wage, at age 30, join the scheme, after 5 years they will have a deposit for their first home. This is the only realistic way in which many people today will be able to afford to buy their first homes, because the speculation in the property market has pushed homes beyond the price able to be afforded by many.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022803002d1-e810-4bd8-b8e7-2e97d0d6f626\u0022 data-id=\u0022dd27d622e0c147328b26c9d99152f007\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000262\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022803002d1-e810-4bd8-b8e7-2e97d0d6f626\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022dd27d622e0c147328b26c9d99152f007\u0022\u003ESIMON POWER (National\u2014Rangitikei):\u003C/span\u003E I came to the debate about KiwiSaver, and the concept behind it, with a reasonably open mind. I thought about what it would mean for my constituents. These are people who over the last 7 or 8 years have come into my electorate office and said to me: \u201CI am a truckdriver.\u201D, \u201CI work in a supermarket.\u201D, and \u201CI am an apprentice mechanic.\u201D, or words to that effect. They are trying hard to etch out a living, to look after their young children, and to get that extra little bit of discretionary spend that would make the difference for them as they go through the supermarket, buy the stationery for the school year, or purchase the new pair of shoes for the school year\u2019s commencement. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000263\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022803002d1-e810-4bd8-b8e7-2e97d0d6f626\u0022\u003EI sat down and read through the documentation relating to KiwiSaver, and thought about how it would affect those people today. The answer is that it will actually make them worse off, because their discretionary spend, at the introduction of the new scheme, will get no bigger immediately, and then will actually decrease over time as the employers\u2019 contributions increase and as the inflation-adjusted wage rise they would otherwise have got disappears into the KiwiSaver scheme. Government members argue that when these individuals, in the communities that we all in this House represent, hit 65, they will have something for their retirement. That may well be the case, but the problem is that the individuals I see in my electorate office, who are in jobs like working in local supermarkets, driving trucks, or working as apprentice mechanics, will have less discretionary spend from Budget day plus 1 year, plus 2 years, plus 3 years, plus 4 years. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000264\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022803002d1-e810-4bd8-b8e7-2e97d0d6f626\u0022\u003EThe Government is saying to those individuals in the towns of Feilding, Marton, or Taihape: \u201CWe want you to take a portion of the wage that you already get\u201D\u2014with which they struggle to make their way in purchasing basic necessities for their families\u2014\u201Cand we want you to put that aside for a rainy day.\u201D The problem is that for those people it is raining now. It is bucketing down, actually, for those people, as we speak. You see, those people need the relief and the discretionary spend to increase today, in order that they can go about their business. Those people are the people whom Labour for so long has purported to represent. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000265\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022803002d1-e810-4bd8-b8e7-2e97d0d6f626\u0022\u003EThis is my eighth year in this House and I have heard time and time again Labour members on the other side of the House interjecting comments like \u201CWhat about the worker?\u201D The answer is to throw the question back to Labour members. I say to those members on the Treasury benches: \u201CWhat about the worker? What about the person who needs the extra discretionary spend today?\u201D. If the argument were that we are all in this together, we all have to pull together in order to save for tomorrow\u2014which means pulling back our discretionary spend\u2014and we will all do that as a country, it might be easier to sell the argument. The problem is that the Government spend is increasing. The very people who need the discretionary spend are having it denied, while the Government does nothing to cut its own spend over the next 4 years. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000266\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022803002d1-e810-4bd8-b8e7-2e97d0d6f626\u0022\u003EI see that the Minister of Corrections is in the Chamber. We will get on to the fiscal risks in that area in another debate, but they are substantial and we are talking big, big bucks in that area. The one thing I am worried about is the 35-year-old dad in Feilding, who drives a truck, whose wife works part-time, and who has two kids. He is not worrying today about his situation in 40 years\u2019 time; he is worried about getting through this week. The Government is not doing its bit but is asking people in those situations to do their bit.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022 data-id=\u002208858c71e22e4e6dbebea4f2bbc3864a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000267\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002208858c71e22e4e6dbebea4f2bbc3864a\u0022\u003EHon PETER DUNNE (Minister of Revenue):\u003C/span\u003E I want to reply to Simon Power, who has just spoken, because he and Mr Carter, who spoke earlier, are probably the only two contributors from his side of the Chamber who, during the course of the debate, have got remotely near what the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill is about. I say to Mr Power that I relate very much to the last part of his speech. I recall that as an 18-year-old I took out a life insurance policy for the princely sum of $1,000. It was to mature when I reached the grand old age of 55, which I am not yet\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000268\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022803002d1-e810-4bd8-b8e7-2e97d0d6f626\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ac661e7c29a64c6b889a44f966084163\u0022\u003ESimon Power\u003C/span\u003E: Years away!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000269\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022dfd6ef113bcc475688fbc11d76368389\u0022\u003EHon PETER DUNNE\u003C/span\u003E: Lightning years away! I did that on the basis that contributions made then as a student, then regularly throughout the duration of the policy, would secure me a wonderful future entitlement. We can laugh today about the sums involved, but the reality is that there is something in the psyche about wanting to provide for one\u2019s future. That is why the package the Budget introduces\u2014and this legislation gives effect to\u2014regarding the new, enhanced KiwiSaver provisions will be attractive for many people. Mr Power went on to use an example of a 35-year-old truckdriver with a family of four and all of the demands that go with that. That truckdriver will be eligible, and has been eligible, for the Working for Families tax credits, so he will be getting a considerable uplift\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000270\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022803002d1-e810-4bd8-b8e7-2e97d0d6f626\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022af344a61ef0f4dc9943ee7837e28dc2a\u0022\u003ESimon Power\u003C/span\u003E: It\u2019s making them dependent on the State.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000271\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022801162747de34062b177ba8cda3b2fac\u0022\u003EHon PETER DUNNE\u003C/span\u003E: This is where I think we get into a fallacious argument from both the left and the right\u2014on the one hand of making people dependent on the State, and on the one hand of this being a money-go-round. The fact of the matter is that we are delivering assistance to people\u2014or, if one likes, making a return to people\u2014that enables them to get on with their own lives. I think that is the bottom line for most people. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000272\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI have come across very few people who, when they get their Working for Families tax credits, say that they do not want the money because it comes from the State. It does not come in a different-coloured coin, and the cheque is not different; people actually appreciate the fact they are getting something back. The National Party says it would give it to them as a tax cut. That is still giving something back; it is not going to come as a different cheque at the end of the day. So I think the member is indulging in an argument that is essentially irrelevant to most people. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000273\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI come to Mr Carter. He asked a question some time ago about whether this measure would see the Inland Revenue Department spreading its tentacles even more widely into buildings in Wellington.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000274\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227107ce698db44aae8c8a990e59b7af9a\u0022\u003EHon David Carter\u003C/span\u003E: No\u2014how many more employees.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000275\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fd7a463e4d974b4d9d42211acb1a3a25\u0022\u003EHon PETER DUNNE\u003C/span\u003E: I heard the member\u2019s question, and I am going to answer it. Mr Carter shares the impatience of those who think they know best. They ask a question, then they become scared stiff they might get an answer, so they try to shout one down. Let me answer his question. It was in two parts. Firstly, the Inland Revenue Department is actually trying to consolidate into one building at the moment, both in Wellington and in Christchurch, so there is not to be a spread of tentacles. Secondly, the major processing area for KiwiSaver is actually at the Inland Revenue Department in Te Rapa, which I visited a couple of weeks ago. It has the staffing capacity at the moment to be able to address KiwiSaver both as it stands and as it is enhanced. So the notion that hordes of new bureaucrats will be employed simply does not stack up. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000276\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EWe are running an operation that is, as I think Mr Fairbrother pointed out, using new technology and working effectively. It has a call centre in place now taking inquiries, literally as we speak. I think the member will see in due course that there is not the army of bureaucrats he fears might be out there waiting to be employed. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000277\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThis part of the bill is really about the technical changes required to bring in three elements of the Budget package. The first is the changes to KiwiSaver, and the second is the reduction in the company tax rate. They are probably the two that have received the most attention. But the third element is probably, in many senses, more important than both of the first two. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000278\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThis bill is establishing, over a whole range of savings entities, a uniform tax rate of 30 percent. We are levelling the playing field in that regard and giving New Zealanders who save a very big boost in terms of the taxation on the funds they contribute to. That is one of the critical strengths of this bill, and I think it is important to note that investments in unit trusts, group investment funds, widely held superannuation funds, widely held group investment trusts that attract\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000279\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002295ac7206-f497-429d-bf58-715224d5160f\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002239c92d17898c454fa187203f53b41c79\u0022\u003EKatherine Rich\u003C/span\u003E: Mr Chairman\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000280\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cadfac1c19fa4f048d1b0da3b96d1a0b\u0022\u003EHon PETER DUNNE\u003C/span\u003E: If the member will give me just a minute, I will conclude. I will simply go through the range of funds that will now be taxed at 30 percent, which will cover the whole range of savings made by New Zealanders, regardless of whether they are KiwiSaver compliant. When we put that alongside the KiwiSaver regime and the enhancements included in the Budget, we are creating a very positive benefit and savings opportunity for New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000281\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EFinally, let me make this point. I have listened to a lot of debate in this House, over the 23 or 24 Budgets I have sat through, where the concern about New Zealanders providing for their future\u2014saving either for their retirement or for the benefit of the country\u2014has been addressed in many respects. Yet this measure is the first coherent measure to give effect to those concerns that I have seen in that time. The big difference between it and some of the other attempts that have been made to introduce savings schemes is that this is not being compulsorily applied top down; this is a voluntary scheme, and its success will depend on the extent to which people take it up. The original estimates for KiwiSaver said there would be a take-up rate of around 20 to 30 percent as the scheme kicked off. Estimates have now improved to nearer 50 percent. I do not think that is a cause for concern\u2014in fact, quite the contrary. As this scheme becomes more well-known, as people become more aware of its capacity and of the opportunity it gives them, we will see an even bigger uptake, and we will actually start to see some addressing of this country\u2019s underlying problem with long-term savings. Whatever side of the political spectrum people are on, that has to be a good thing. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000282\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI say to those people who for so long have compared us with countries like Australia, Singapore, and Chile, and who have said how much better those countries are doing with their good savings records and with the massive savings schemes they have in place, that we are actually now starting to catch up. In respect of infrastructure, education, health, and all the other things, we are starting now to build the investment base that will allow us to grow those things for the future. That is what this bill is about, and that is why I am pleased to support it.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002295ac7206-f497-429d-bf58-715224d5160f\u0022 data-id=\u0022b005fd6b22e54ca0a2d7dc8d537530ea\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000283\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002295ac7206-f497-429d-bf58-715224d5160f\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022b005fd6b22e54ca0a2d7dc8d537530ea\u0022\u003EKATHERINE RICH (National):\u003C/span\u003E I am always keen to hear from that Minister. He is a Minister who, on this side of the Chamber, we have a lot of respect for. But I think he overestimates the interest of 18 or 19-year-olds in this particular legislation. The Minister would have been a rare 18-year-old in taking out superannuation when he was at university, although it is quite nice to think that while most 18-year-old men were thinking about beer, girls, and rock \u2018n\u2019 roll, Peter Dunne was taking out his first superannuation policy, planning for his future. I think he is a rare person who demonstrates common sense. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000284\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002295ac7206-f497-429d-bf58-715224d5160f\u0022\u003EOne of the things that concern me about this legislation is that there is very little in it for people who vote Labour. We heard Russell Fairbrother talk about the person on $11.25 an hour and how he or she would benefit. I say to him that people on $11.25 will not opt into KiwiSaver, because they cannot afford it. They cannot afford it, because if they earn that amount of money they are struggling to put bread and butter on their tables and cover their costs. Those are the people who were shouting the loudest for tax cuts so they can increase their discretionary income and cover a few more of their bills. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000285\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002295ac7206-f497-429d-bf58-715224d5160f\u0022\u003ESo low-income Kiwis on $11.25 an hour will now be in a position of subsidising the superannuation of higher-income people, who have the ability to put some money away and save. And that is the thing. The $11.25 an hour wage earner will be hit in two ways. First, those wage earners will not have the true option to opt into KiwiSaver. They will not put their money away. They will not be able to get credits through KiwiSaver, and they will also be asked to subsidise high-income Kiwis who do have the option to save. But the last thing is that they will not get any pay increases. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000286\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002295ac7206-f497-429d-bf58-715224d5160f\u0022\u003EWe have heard from the Minister of Finance and the unions that in order to appease some of the concerns of employers, they are sending the message out right now that no pay increases should be expected. Basically, this is the pay increase for those wage earners. So those people will get very little whatsoever, and I think that will dawn on a lot of people as they suddenly work out the details of this package. I think of all those 18 and 19-year-olds in my home town right now. They are not going to get all excited about this. They will not see that they will be better off by getting a payment in 45 years\u2019 time, so I do not think they will be particularly excited about it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000287\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002295ac7206-f497-429d-bf58-715224d5160f\u0022\u003EI think what we are seeing here is a debate forming about the difference between independence and dependence. Members heard my learned colleague Simon Power make the point that those Kiwis who are earning the average wage want to be able to survive and to be independent. They do not want to have a relationship with a Work and Income manager if they can help it. They do not want to spend their lives filling out forms, because they believe that they are only getting back money they have earned in the first place. Therein lies the difference between National and Labour. We believe that people should be independent, that they should not have to form a relationship with someone from Work and Income unless they really have to, and that we should do more to allow people to stand on their own two feet and not continually have more money taken from their pocket, only to have it handed back by the Government, which believes that they should be grateful for getting their own money back. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000288\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002295ac7206-f497-429d-bf58-715224d5160f\u0022\u003EEven if we look at the Budget, where has the chewing gum gone? In 2005, when Michael Cullen handed out this tax cut and thought that this would appease those calling for tax cuts, he said: \u201CYou can have one, but it will be in a couple of years.\u201D Well, that has gone, as well, and albeit that it was small, I think it is something that many Kiwis will be disappointed about. We have heard lots of other announcements today that will bring benefits supposedly in a few years\u2019 time, but they are not forthcoming. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000289\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002295ac7206-f497-429d-bf58-715224d5160f\u0022\u003EOne of the things that I think it is important to consider when we are looking at our savings problem is that it is not because people are lazy or short-sighted. The fundamental problem is that most New Zealanders are not earning enough to be able to put money aside. What we have here does not solve that; it just postpones the problem. The fundamental problem is that Kiwis do not earn enough. I am surprised that more Kiwis are not getting on a plane and going to Australia, because in the last four or five Budgets we have seen Peter Costello deliver more money into the pockets of Australians. \u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022 data-id=\u0022a1bf46e1dcee43b3b9a5351a6a188fc1\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000290\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a1bf46e1dcee43b3b9a5351a6a188fc1\u0022\u003EMARYAN STREET (Labour):\u003C/span\u003E I want to pick up a couple of points in speeches made over the last few minutes. A couple of things seem to be missing from the Opposition\u2019s analysis of KiwiSaver, its application, and its potential uptake. First of all, has the Opposition not noticed that the social debate around savings has altered\u2014that people are very aware of the need to put aside money for their retirement? In fact, after listening to some of the vox pop coverage expressed yesterday in the wake of the announcements about KiwiSaver, it is patently obvious to me that of the four young people I heard, all four would rather have the $20 put aside for them to complement their own savings than to have that $20 in the hand. That was said by four out of four people who were asked about that. They were young people who were watching their parents approach 65 years. One woman in particular said that her mother was approaching 65 and it was getting a bit scary. To a person, they would rather have the money put aside and contributed to KiwiSaver than to have the $20 now\u2014which they thought would go nowhere. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000291\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022\u003EThis is, absolutely, a savings regime for the poor and the low paid. This is exactly who it is for. This is the best opportunity for the poor and the low paid to provide for their retirement\u2014the best opportunity. The sooner the Opposition understands the structural shift in the economy that this KiwiSaver initiative represents, the better. How will they go out and say to people: \u201CWe will give you a $10 a week tax cut across the board. You can have $10 now.\u201D? People will say: \u201COh yeah, great; thank you. That\u2019s not going to do much for me. I would rather make sure that I have $20 a week that\u2019s going forward to my future.\u201D This is the best opportunity that low-paid workers have of providing for their future.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000292\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022\u003EGiven that the National Party seems to think it is on a crusade to woo the women\u2019s vote, it may like to consider what this means for women\u2019s superannuation. It is an absolute given\u2014it is well known\u2014that women do not accrue the same level of savings as men, and they do not receive the same amount back in superannuation as men do, for all the reasons that we know about. First, women are located predominantly in the lower-paid parts of the labour market. Secondly, women have interruptions to their work history that interrupt their payment into savings. Thirdly, we still have a persistent gender gap in earnings. Therefore, there are three structural reasons why women do not achieve as much in the way of superannuation returns as men do. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000293\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022\u003EThis is the best opportunity for women to be preparing in their own right, as well as with their family and their partner, to receive very substantial returns for their superannuation in years to come. KiwiSaver allows for holidays on payments. It allows for those holidays so that if and when women take time out of the workforce to raise children, they can be seen to be continuous contributors, including those holidays from their actual payments. It means they will have safeguarded accounts they can rely on when they turn 65.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000294\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227df975cd-93d2-4f55-9bc5-d2790e28e043\u0022\u003EThe first Labour Government was known for the welfare State and for provision for the poor and the needy. In Norman Kirk\u2019s day the Labour Government was known for independent foreign policy. This Labour Government will be known for its contribution to older people and for security in the future.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022 data-id=\u00226df3045730c34a11930b6f3469758abc\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000295\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00226df3045730c34a11930b6f3469758abc\u0022\u003EJUDITH COLLINS (National\u2014Clevedon):\u003C/span\u003E We have just learnt a new term\u2014social debate. What the hell does that mean? What is a social debate? It is just another politically correct term from that Government and from one of the most politically correct members of a politically correct Government. The people who pay for this will wonder what a social debate is, as opposed to an unsocial debate, I suppose. What does it mean? I say to Ms Street that most people here do not sit around talking in the language of social debate. Most people have to look after their kids. Most people have to pay the bills. Most people have not been living off the Government for years and years and years, and working the taxpayer system. Most people have to work for a living. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000296\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003EWhen I listen to that member and other Government members speak about this, I ask who KiwiSaver is really going to help. Will it help the poor? Laila Harr\u00E9 says that it will not do a thing for the poor, and I think she is right. Let us have a look at the people it will help. The Inland Revenue Department had to hire 400 more people just to bring in the most basic version of KiwiSaver last time. So we can forget the 1,000 new police; we will have 1,000 new tax bureaucrats in the Inland Revenue Department. That is just what this country needs\u2014not! It is just what this country needs\u2014sure! What this means is more bureaucracy and more taxes paid to pay for this Government to be able to give people back some of their own money. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000297\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003EWhat we do not know is who will be eligible for this. I would like to ask the Minister in the chair whether all public servants will be eligible for this. Will all public servants on the Government superannuation scheme at the moment be eligible for this? If that is true, then will that not do something to the blowout in the Budget? Will that not actually have an effect? If it is not true, then why are public servants being treated differently from everyone else. Is that true? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000298\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003EI would like to know about the stay-at-home mums. What is in it for them? What is in this Budget for the women whom Ms Street has just said she thinks so much about? What is in it for them? There is absolutely nothing in this Budget for them\u2014absolutely nothing. What they are being told is: \u201CGet ye out to the workforce.\u201D That is what they are being told. We hope these mums are having three or four children, because someone has to have three or four children. We have to have a decent population in this country. Those people need to be praised and they need to be helped. They do not need to pay for this Government trying to give a tax credit to people who are saying they do not even have enough money to buy into the scheme. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000299\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003EMost people, unfortunately, do not earn enough at the moment. What we have to understand is that most workers in New Zealand get about a third of what they would get in Australia for doing the same job. That is what they end up with. All this Government wants to do\u2014instead of looking to the future and saying: \u201CLet\u2019s try to grow this economy.\u201D\u2014is to grow the Government. We now get $20 billion of taxpayers\u2019 money going into the Government\u2014$20 billion more each year than we had under the last National Government in 1999. That is a huge increase, and most people in this country are finding it very difficult to cope. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000300\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003EWe do know that the rich have got richer and the poor have got poorer. The people who are now becoming poor are the people with a couple of kids\u2014two, three, or four kids, or people who have one income, or even two incomes for one person. Those people are our new poor. They have become the new poor under a Labour Government that likes to stand up on its hind legs and talk about the rights of women. Well, what about the rights of women who do the work, who look after the children, and who help us have a better society because they work with their kids and are good mothers? What about them? There is absolutely nothing for them under this Government. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000301\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002285ec30d4-6394-433a-a12e-2c4def705dd0\u0022\u003EThe only thing they should know, of course, is that Michael Cullen has hinted that this will lead to some sort of means testing of national superannuation. He hinted at that yesterday when he spoke about how that would help to ensure that there would be enough money for national superannuation. Why would it help? These are supposed to be individual savings plans. Of course, it will help only if this Government has in its mind that it will means test national superannuation. That will utterly destroy superannuation for those stay-at-home mums, and destroy superannuation for people who have been on disability benefits for years because they are invalided and really cannot work. Means testing will destroy superannuation for the poor people.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022 data-id=\u0022c0bb52c7d20b4666baa1229afe19bf17\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000302\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022c0bb52c7d20b4666baa1229afe19bf17\u0022\u003ESHANE JONES (Labour):\u003C/span\u003E T\u0113n\u0101 koe, Mr Chairperson. [Interruption] The nation is rejoicing, from the tail of the fish to the head of the fish. Even in Horowhenua people are happy. For their infrastructure, their bridges, and their roads, improvement is on the way. We will not see much of that member in the House; he will have to employ someone else on, hopefully, good wages to milk the cows\u2014unlike Mr Bennett, who has been feeding off the udder. That is an example of massive infrastructure development.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000303\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EI have been in and out of the Chamber to take toll calls from people up and down the country who are totally overwhelmed by the potential to improve savings, improve the efficiency of firms, and improve the prospects of children and grandchildren. These people are waiting with bated breath to hear how refined this product will actually be after it has been sifted by, and shepherded through, our Finance and Expenditure Committee. Like all proposals, obviously, the policy will be passed here, but there is a need for further detail. The proposal is based on vision, and the vision will be strengthened through attention to detail. I could not think of a better committee to undertake that role.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000304\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EI hope the members on the other side of the Chamber rise to the occasion and toss away this hyperbole, this irrelevant rhetoric, and bring real skills to the debate. I accept I may have been a tad irreverent in describing Mr Bennett as constantly lacquering his head with pottles of oil. He has just come back; he now has powdered his nose. We know that, and that is why every contribution he makes in an attempt to undermine our m\u0101tua Winston Peters is an irrelevancy. He has been mothered on milk he did not buy.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000305\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EI will say that at least those members towards the back of the Chamber make an attempt to contribute constructively, but they overlook the fact that this debate is about a grand narrative that is moving Aotearoa forward. They seem to believe that the way to improve the roads is to constantly study the shape of the spark plug. No, if one wants to lay down a better trajectory, one has to step out of the minutiae.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000306\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022803002d1-e810-4bd8-b8e7-2e97d0d6f626\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c9492a4959bb4b5a9762a36656074792\u0022\u003ESimon Power\u003C/span\u003E: I raise a point of order, Mr Chairperson. I was reluctant to interrupt the member, because I was enjoying his contribution to the Committee. But I want to make sure that the same latitude of debate will be afforded to members on this side of the Chamber. I do not believe that Mr Jones, in what was a highly entertaining description of a large seagoing creature, has actually referred to Part 2, at all. You have let him go on, Mr Chairperson, which is fine by us, but I want to be assured that the same latitude will be allowed National members, given that he has got so far through his speech without interruption.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000307\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ed9ad81-05c1-4171-80c6-24fa02cade42\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223aa36006eea548279cd2297daff7d17c\u0022\u003EThe CHAIRPERSON (Hon Clem Simich)\u003C/span\u003E: Thank you for raising that. The same latitude? Not necessarily. I was trying to attract the attention of Mr Jones. The volume of his voice was such that he could not hear me. I was going to draw that matter to his attention. Can we commence on Part 2 please, Mr Jones.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000308\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022352a525efa6f41ee8a4d389e3a1ee0be\u0022\u003ESHANE JONES\u003C/span\u003E: I accept that counsel, that guidance, from my kinsman, a learned parliamentarian. I will gladly take responsibility for any sense of offence that the institution might have suffered through, largely, my reciting members\u2019 names. Let me come back, however, to the Budget. When our committee deals with the bill, there are three things\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000309\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a25943b-cb3b-49c3-bd10-74316fae17f1\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022accc9cb4427c4f48b8437daa3f6f6355\u0022\u003EJacqui Dean\u003C/span\u003E: Three things!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000310\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002215d8e2a52a0942e98b4c993dd96959ae\u0022\u003ESHANE JONES\u003C/span\u003E: No, two things are happening. We are passing legislation under urgency, but the elements of the Budget that National members want to ape will be referred to our committee. Let us just see what they are: KiwiSaver, which was laid down last year and added to this year; and the ability for firms to grow their wealth through better efficiencies and better incentives. It is a fantastic day we are looking at.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022 data-id=\u0022a3035172dd5e49b092154065bd95d419\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000311\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022a3035172dd5e49b092154065bd95d419\u0022\u003ELINDSAY TISCH (National\u2014Piako):\u003C/span\u003E The Taxation (KiwiSaver and Company Tax Rate Amendments) Bill will make businesses $1 billion worse off than they are today. You see, what is happening here is that although the corporate tax rate will be cut from 33 percent to 30 percent, the cost of implementation for an employer will be higher than that 3c in the dollar cut. Where is the fairness and where is the equity in that? This measure is a tax increase. It is a compliance cost increase for small business. We all know that 95 percent of the businesses in New Zealand are small to medium sized enterprises. There are 300,000 businesses that fall into that category. Sixty percent of those businesses will not benefit from the corporate tax rate reduction. Sixty percent of 300,000 is 180,000. One hundred and eighty thousand small to medium sized businesses\u2014that is, businesses employing fewer than 20 people\u2014will get no actual benefit whatsoever. Why? Because they are either sole traders or partnerships, they will miss out. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000312\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003EHowever, those businesses will still have to contribute to an employee\u2019s KiwiSaver account. If an employee decides he or she wants to opt into the KiwiSaver scheme, then deductions will have to be made. As we have seen, the real hoax in yesterday\u2019s Budget is that there will be a compulsory employer contribution. Who thought of that? The real hoax in this Budget is that businesses will carry the can. In fact, it is\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000313\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ed9ad81-05c1-4171-80c6-24fa02cade42\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f9bea122f725436e8e0daaee2f736441\u0022\u003EThe CHAIRPERSON (Hon Clem Simich)\u003C/span\u003E: I am sorry, Mr Tisch. This debate is on Part 2, which is entitled \u201CAmendments to other Acts and Regulations\u201D. Your debate was appropriate for Part 1, and it will also be appropriate for clauses 1 and 2, which are coming up shortly.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000314\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224d0347b9d2334949b7fb214dcbe76a99\u0022\u003ELINDSAY TISCH\u003C/span\u003E: Well, any sorts of amendments that come through in these parts have a reflection on the way we do business\u2014whether it is as employees who are wondering what is in it for them, or whether it is as a business owner. These points are very relevant, because they add to the compliance costs associated with doing business. I think we have to make it very, very clear that this measure is a hoax for small businesses\u2014an absolute nonsense. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000315\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003EWhen we look at any associated legislation that may be impacted on by this measure, we see that it adds once again to compliance costs. What does KiwiSaver, and all of the associated amendments that go with it, actually mean to employers? What is the process they will have to go through?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000316\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00225be5567be7e44b6fb2120ac4193a7e85\u0022\u003EJohn Hayes\u003C/span\u003E: Cost.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000317\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002223db29b91ed1408ba53e9ffad080bc4f\u0022\u003ELINDSAY TISCH\u003C/span\u003E: Well, it will end up being a cost. When I have gone around talking to business owners, I have found that only about 5 percent of them actually know how the KiwiSaver scheme works. Yet, that measure will be implemented from 1 July. The horrendous costs we will see with regard to it will be quite significant for small to medium sized enterprises, which do not have the resources to employ somebody specifically to spend his or her time on the new payroll tax and to work through the process of whether someone will opt into or out of the scheme. The cost is associated with any provisions in other legislation that impact on what the whole scheme is about. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000318\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003EIn dealing with this issue\u2014the process that one must go through in looking at whether an employee will opt into the scheme\u2014the employer needs to be able to tell the person what is in it for him or her\u2014what the employee will receive in terms of benefit. I will not discuss those things, as I know they are not part of this debate. But I think we need to bring it back to the process that will be followed\u2014with all the implications that go with it\u2014and that the employer will have to go through. If the employer is a company, then it will receive a tax reduction from 33c in the dollar to 30c in the dollar, but if the employer is a sole trader or a partnership then he or she will get no benefit whatsoever. The compulsory contribution to an employee\u2019s KiwiSaver account is where the compliance costs come in, and that is what National is opposed to. This scheme is a hindrance and a hoax on employers in New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000319\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022893adc11-ce4e-419c-a079-08f04b3d75f5\u0022\u003ELet us look at the process that we will go through from 1 July. Here it is. I have a graph here; it is a matrix of what will be involved.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022 data-id=\u00227afb74ef38ce4ad9ba4f7492a888b4a7\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000320\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00227afb74ef38ce4ad9ba4f7492a888b4a7\u0022\u003EHon TONY RYALL (National\u2014Bay of Plenty):\u003C/span\u003E I cannot help but agree with Lindsay Tisch\u2019s contribution. I thought it was right on the money\u2014and I will tell members about the money. New Zealanders are not going to get any of it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000321\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EI am strongly opposed to these proposals in Part 2 of the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill because Government members have not answered the three important questions I asked them earlier this morning. I have listened to this debate, and I have not heard one member opposite answer any of the three key questions that I asked earlier. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000322\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EThe first question I asked was how a low-income person in \u014Ctara benefits from this bill. If he or she cannot afford to save anything, what is benefiting that person in this bill?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000323\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222d90d78b8f6f46fe87bdac813d91184d\u0022\u003EShane Jones\u003C/span\u003E: You said that this morning!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000324\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fee2fd24cfc3444c8066806e4dc7bbc4\u0022\u003EHon TONY RYALL\u003C/span\u003E: And the member did not answer the question. I am repeating the question. I ask the member, \u201CMr Tamihere\u201D, to take a call and to answer the question. [Interruption] I ask the member to answer the question. The first question is how low-income people in \u014Ctara will benefit from this if they cannot save. What in this bill will increase their pay packets and give them more incentives? Nothing in this bill will do that. The second question is this. What effect will this have on the pay packet of a low-income person in \u014Ctara? The Labour Government has got employees into these multi-employer contracts so that everyone gets paid the same, regardless. The union representatives of those low-income people in \u014Ctara will go to see the employer, and the employer will say that there will be a 2 percent reduction in their pay increases, because that is for KiwiSaver. That is what Dr Cullen said would happen. He said that the increased burden on business can be paid for through lower pay increases. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000325\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003ESo what will happen to that low-income family in \u014Ctara that is not in KiwiSaver is that their pay will be suppressed by the people who are in KiwiSaver, because that is the way Labour has industrial relations these days\u2014one gets paid the same, regardless. Well, what will the Government do about that? I have not heard a single answer to that question in the debate today. The question is simple. How will the Government stop low-income people having their pay increases suppressed because some of their workmates may be in KiwiSaver under multi-employer collective agreements? It cannot answer that question. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000326\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EThe third question that Labour cannot answer is this. What in this bill will actually make people wealthier when they work hard? What is the incentive in this bill for people to work hard, get ahead, and keep money in their pockets? None of those three questions has been answered in this House today. Frankly, that is simply not good enough. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000327\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EBut let us look at what also is affected by Part 2\u2014the lower company tax rate, and the impact that will have on Part 2, particularly in some of the later clauses associated with the bill. I want to quote this comment, which was made in 2001, and I want Government members to answer this\u2014I wonder how they will rebut this argument: \u201CThe actual benefit of a lower company tax goes to foreign resident shareholders, for whom it is, in the main, the final tax. Leaving aside the political question of whether our fiscal priority is to give tax breaks to foreigners, the core question is whether this actually attracts any new foreign investment. Since this is a small increase in what is left over from profitable investment, is the business community really saying to me that the profit potential of investment options for foreigners here versus elsewhere is so finely balanced that this will swing deals? I doubt it,\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000328\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003EAnd who is the person who said that it is important to identify that for New Zealand resident shareholders \u201Ccompany tax is merely a withholding tax. They are eventually taxed at their marginal tax rate\u201D, and that the principal beneficiaries are foreign investors? Who said that? Dr Michael Cullen. He is the man who, year after year, has opposed lower company taxes, saying that they will not work and that they do not benefit ordinary New Zealanders. The point of the National Party is this. The priority should be lower personal taxes for New Zealanders. Yes; send that message out to every home in New Zealand. Ring it out loud. The priority is lower personal taxes, because that is what helps the poor person in \u014Ctara. KiwiSaver does not help the poor person in \u014Ctara, and this Government cannot in any way argue that it does.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f9a94bf3-a948-4410-8413-403a7454114b\u0022 data-id=\u0022746aeb5c493a4e948b807df234e02133\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000329\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f9a94bf3-a948-4410-8413-403a7454114b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022746aeb5c493a4e948b807df234e02133\u0022\u003ETIM BARNETT (Senior Whip\u2014Labour):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002223de6bd3-0482-495d-88f4-7cc3f75d8442\u0022 data-id=\u002297aa2d92b7da4750bb5163947a2c66e2\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000330\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002223de6bd3-0482-495d-88f4-7cc3f75d8442\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002297aa2d92b7da4750bb5163947a2c66e2\u0022\u003ENATHAN GUY (Junior Whip\u2014National):\u003C/span\u003E I raise a point of order, Mr Chairperson. Standing Order 137(3) states: \u201CThe Speaker may accept a closure motion if, in the Speaker\u2019s opinion, it is reasonable to do so.\u201D The reason I raise this point of order is that we are in urgency and Part 2 is mainly around KiwiSaver, about which the Opposition has some big concerns. According to my records, we have had 10 or 11 speakers, and we have many more to come. So I would ask that you rule accordingly, Mr Chairperson.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000331\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ed9ad81-05c1-4171-80c6-24fa02cade42\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022cddeeb9500ca4cb48f25682f6eba846a\u0022\u003EThe CHAIRPERSON (Hon Clem Simich)\u003C/span\u003E: The member is making a plea for further debate. He is quite right; the debate was meant to be around Part 2 and very little of it has been. Therefore, I will take one more call.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022 data-id=\u0022b18c6d9c64c745828be7b2293823028f\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000332\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022b18c6d9c64c745828be7b2293823028f\u0022\u003EDAVID BENNETT (National\u2014Hamilton East):\u003C/span\u003E Yesterday out of this Budget we got one phrase that has not been in the papers yet, and that is: \u201CIs that it?\u201D. Is that the last Budget from Michael Cullen? It is. Is that the last Budget from Helen Clark? It is. Is that the last Budget of the New Zealand First \u2013 Labour coalition? It is. Is that the last Budget where New Zealanders will be kicked around by this Government? It is, because New Zealanders will stand up now and want a Government that will not tell them what to do. They will want Budget legislation with a Part 2 in it that actually reflects what they want to see happen. They will want a Part 2 that will deliver for all New Zealanders.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000333\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003EThose people in New Zealand who work hard and try to make a living will be, under this Budget, put to the sword by this Labour \u2013 New Zealand First Government, which has no recognition of hard-working New Zealanders. This is a Government that thinks it knows best. It thinks that by taking money from people, then spending it and giving it back to them, it knows better than those individuals who should have had the money in their hands in the first place. This is a Government that thinks it knows what people should do. It thinks it knows how people should live their lives. It thinks it knows how people should spend their money. Part 2 should not be like that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000334\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003EPart 2 should reflect ordinary New Zealanders\u2019 ability to live their own lives, determine their own destinies, and have some tax cuts they have been promised over many years\u2014tax cuts we were told about, and tax cuts to the value of chewing gum that have now been put away. It is no good giving people \u201Cchewing-gum\u201D tax cuts now, because they are too small. We will have to wait till next year to get any tax cuts, will we not? People will have to wait until the \u201CBudget of all Budgets\u201D in election year\u2014the Budget where there will be a pay-out to buy the votes of people who have saved up for 9 years. That is what New Zealanders will have to wait for to get tax cuts, and that is simply not good enough.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000335\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ed9ad81-05c1-4171-80c6-24fa02cade42\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220432db9320df42768c698a1a12b6a222\u0022\u003EThe CHAIRPERSON (Hon Clem Simich)\u003C/span\u003E: Mr Bennett\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000336\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002249dc43dd50104c89bd9a535c578704a6\u0022\u003EDAVID BENNETT\u003C/span\u003E: But there are some other parts in Part 2 that we need to look at. In this Budget we see a number of things about KiwiSaver. The selling of this programme will be the goal of Labour over the next 6 months. It is Labour\u2019s golden ticket to beat the polls, so that it can come back and say it is doing what ordinary New Zealanders want to see happen. There is an element of truth to that, I must admit. New Zealanders want to see some kind of savings policy, but\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000337\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ed9ad81-05c1-4171-80c6-24fa02cade42\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ef9875f8968f443ca9074f89d99ff81f\u0022\u003EThe CHAIRPERSON (Hon Clem Simich)\u003C/span\u003E: You have made a number of references to Part 2, but I ask you, please, to let me know which Act or which part you are speaking to\u2014the Tax Administration Act or the Companies Act? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000338\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a956f455e9c34bb3b079ced06e84437b\u0022\u003EDAVID BENNETT\u003C/span\u003E: The KiwiSaver Act and company tax amendments.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000339\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ed9ad81-05c1-4171-80c6-24fa02cade42\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d5fa603d61194bee83c513c19c7c4c0d\u0022\u003EThe CHAIRPERSON (Hon Clem Simich)\u003C/span\u003E: So you are speaking to the KiwiSaver Act 2006?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000340\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228d1d23d273bc49ffb4b1da772c3b5ca5\u0022\u003EDAVID BENNETT\u003C/span\u003E: Yes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000341\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ed9ad81-05c1-4171-80c6-24fa02cade42\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022b06f853d45b8484c8039105852544b73\u0022\u003EThe CHAIRPERSON (Hon Clem Simich)\u003C/span\u003E: OK.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000342\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e1d343c355184306a620026907a1fbf9\u0022\u003EDAVID BENNETT\u003C/span\u003E: When we look at the KiwiSaver scheme, we see there is an element of truth to the need to have some kind of savings regime, but we cannot have a savings regime when the people who are most in need of savings will be left out. The people on low incomes, who need a savings policy that will assist them through their lifetime, will now be left out of the scheme. They are the ones who will be left out of it. It is all right for all those academics over there on the Labour benches who have been living off the hand of the Government for all their lives. They will get their tax cuts, and they will take advantage of them, but they are not looking after the people who voted them in. They are not looking after the people this House represents. They are looking after themselves; they know they will get tax benefits. They know they will get the advantage, but they do not care about the people out there, because they know they have a year and a half till an election, and in a year and a half people will forget about this stuff. The real stuff will be in a year and a half when they go out there and go around the country promising handouts to certain interest groups. That is what they will be doing. They are not worried about ordinary New Zealanders making a go of it today.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000343\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003EIt is all right to talk about a charities policy now from this Government\u2014a charities policy that National put out there but that has been stolen by the Labour Party and dressed up in its own colours. It is a policy that National put out there, and New Zealanders had the advantage of knowing that National led the way. National was going to look after charities in New Zealand, not these guys. The only charity they see is themselves, and they see that they have the advantage.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c186d0a2-99f4-408b-9b4d-d484cf19724d\u0022 data-id=\u002224f4e9f35d4e4f09ae2b3f1c9dbfb224\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000344\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c186d0a2-99f4-408b-9b4d-d484cf19724d\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002224f4e9f35d4e4f09ae2b3f1c9dbfb224\u0022\u003EHon LIANNE DALZIEL (Minister of Commerce):\u003C/span\u003E I move, That the question be now put.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000345\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ed9ad81-05c1-4171-80c6-24fa02cade42\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222ac93ae1944342a7a461c28667722227\u0022\u003EThe CHAIRPERSON (Hon Clem Simich)\u003C/span\u003E: I thank members. They have clearly indicated that they want to have a wide-ranging debate, and that will be afforded during debate on clauses 1 and 2. So I will put the question.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u00220a8d283e3a9544e08c449d9adff4953f\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That the question be now put.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 61\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 49; New Zealand First 7; United Future 2; Progressive 1; Independent: Copeland; Independent: Field.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 48\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 48.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAbstentions 3\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EM\u0101ori Party 3.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EMotion agreed to.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u002276d90af7f00f493cb35828e488a5bc09\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That Part 2 be agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 61\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 49; New Zealand First 7; United Future 2; Progressive 1; Independent: Copeland; Independent: Field.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 48\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 48.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAbstentions 3\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EM\u0101ori Party 3.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EPart 2 agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000346\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022ef977fd0d07e46229b6f66fa2c5546d7\u0022\u003EClauses 1 and 2\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00220ed9ad81-05c1-4171-80c6-24fa02cade42\u0022 data-id=\u00229f679b5d41ef452aa0239c444b79ba21\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000347\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ed9ad81-05c1-4171-80c6-24fa02cade42\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00229f679b5d41ef452aa0239c444b79ba21\u0022\u003EThe CHAIRPERSON (Hon Clem Simich)\u003C/span\u003E: There will be one debate on the title and commencement, in which contributors may, if they wish, summarise all other aspects they have covered. So there will be one debate and two questions.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022 data-id=\u0022f1a768d5f6c849a9ab98ee3e83d8f3aa\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000348\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f1a768d5f6c849a9ab98ee3e83d8f3aa\u0022\u003EHon DAVID CARTER (National):\u003C/span\u003E I want to cover one or two points that were raised by Labour members during this debate on the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill. The first point I would make to the Committee today is a comment on the rather amazing contribution from Shane Jones. Shane Jones said that when this legislation goes to the Finance and Expenditure Committee, his select committee, the committee will refine it. The reason that comment needs to be exposed today is that he is indeed chair of the Finance and Expenditure Committee, but we are here in urgency pushing this legislation straight through the House because the Government does not want it to go to the select committee. So Shane Jones should get up to speed and realise that in fact he will not have the opportunity to refine this legislation before the select committee. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000349\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E The next time this legislation comes before a select committee Shane Jones will not be chairing the Finance and Expenditure Committee; the next National Minister of Finance, the Hon Bill English, will be the one who has to send this back to the select committee to get it tidied up, because that is the first opportunity it will have. Shane Jones certainly will not be the chair of the select committee, and I suspect he probably will not be a member of Parliament. Given the way that Labour is rating at the moment, it will not get many of its list members in here, at all. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000350\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EThe second point I would make is to take this opportunity to thank Mr Dunne for answering my questions. A number have been raised throughout the debate and finally I had an answer from Mr Dunne to my questions about whether this would increase the size of the bureaucracy of the Inland Revenue Department. I accept the answer that Mr Dunne gave me that although the scheme is complicated, the department will not need any more staff. The question then arises, if this is complicated and will put a lot of work on to the department\u2019s employees, what are those employees doing now that the department has all this spare capacity? I look forward to an answer from Mr Dunne. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000351\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EThe third contribution I will remark on was the most amazing one of all, from Ms Maryan Street. One or two of the questions raised by the National Party throughout this debate asked what is in this for low-income New Zealanders. Do members know that in the Chamber this morning Maryan Street said that low-income wage earners do not need $10 to $20 a week. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000352\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d6b647c03f5d4b45bbcf52fa1845f48a\u0022\u003EHon Members\u003C/span\u003E: What would she know!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000353\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222643c330f955442e892910e747557690\u0022\u003EHon DAVID CARTER\u003C/span\u003E: She said that low-income New Zealanders do not need an extra $10 or $20 a week. Doug Woolerton heard that comment. Well, they will need $10 a week simply to keep putting petrol in the car, if they live in Auckland. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000354\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003ELianne Dalziel is chipping in now, but was not prepared to make a contribution during the debate. I look forward to hearing her take a call shortly. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000355\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EThen we had an amazing contribution from Mr Chauvel. He got hold of page 2 of the Dominion Post and mentioned a couple of points. I looked at the last part of the piece he was referring to and it is attributed to Government Budget document propaganda. It was not written by any Dominion Post editor, so the interesting point is to look at some of the other comments in the newspapers. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000356\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EThe Christchurch Press, which is not known generally for supporting the National Party, states that the Budget is an \u201Copportunity lost\u201D. That comment is right on the mark on this occasion, because Dr Cullen had the opportunity, with the hugh surpluses that have been amassed, to deliver a Budget that would have given growth to this economy. Instead he has fiddled with the KiwiSaver scheme, which even his own Treasury officials say will not achieve greater than a 50 percent uptake. It has now been adequately explained throughout the debate that the very people who will not take up the option of KiwiSaver are the people earning $11.25 an hour, who simply cannot afford to take it up. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000357\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e4b09a29-dfd3-42c0-8585-11463bd6077b\u0022\u003EAt one stage we had an interjection from Mr Mallard: \u201CWhat about the workers?\u201D. I say to Lianne Dalziel: \u201CWhat about the workers?\u201D, the very people in the electorate of Christchurch East who voted for that member of Parliament. They have been let down completely by Lianne Dalziel. She does not care about the workers; all she is interested in is sitting in her plush chair in Parliament, banking her big salary. She has lost touch with the people who voted for her.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00221583b5cb-f4e0-4981-97ba-193c338ff404\u0022 data-id=\u0022c019f9a5ccb64d40af5aa58d551fb80a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000358\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221583b5cb-f4e0-4981-97ba-193c338ff404\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022c019f9a5ccb64d40af5aa58d551fb80a\u0022\u003EHon MARIAN HOBBS (Labour\u2014Wellington Central):\u003C/span\u003E I rise to support this legislation because I find this a very interesting Budget and a particularly interesting scheme. Budgets can make some changes to how we live as people, and I want to take members through, in a sense, the experience of my parents and their behaviour, and my behaviour in terms of debt. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000359\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221583b5cb-f4e0-4981-97ba-193c338ff404\u0022\u003EMy parents lived, through the Depression, and consequently they never ever borrowed to buy something. They saved before they bought a fridge; so we did not have a fridge until about midway through the 1950s. We did not have car until about the 1970s; and that was a Skoda, and that was doubtful! They would never ever do things like borrowing to buy something, because they were brought up very strongly with this idea that one saved money before one went out and spent it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000360\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221583b5cb-f4e0-4981-97ba-193c338ff404\u0022\u003EI have a look at myself and I find that if something goes wrong with the dryer, I will very easily take my credit card to the company and buy a dryer, on the credit card, and then pay it off. That is so much the reverse of what actually happened in our parents\u2019 lives. That is what this Budget and this bill are about. It is about returning us to a different way of acting, to a way of responsible acting that accumulates money in this country, instead of making us always subservient to money that we have to borrow overseas. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000361\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221583b5cb-f4e0-4981-97ba-193c338ff404\u0022\u003EThis is a Budget about building capital for this country, and I would have thought the capitalists who are so good at borrowing capital from overseas and who sit on the Opposition benches might be interested in this debate. [Interruption] I cannot hear them; they are yelling so much. This bill is about bringing discipline, self-pride, and security to both individuals and this country\u2019s economy. It is something that we desperately need to do. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000362\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221583b5cb-f4e0-4981-97ba-193c338ff404\u0022\u003EI have been out and about today, and doing a radio programme with some economists. Have I found there has been a real buying of this legislation? You bet I have! The response from young people on the streets of Wellington has been: \u201CA $20 a week tax cut disappears very fast\u2014four lattes, four bottles of beer. But $20 from the Government, going into my savings account instead of a tax cut, is money that will grow. It is money that will grow for the country\u2019s capital development, and money that will grow for me as a person. I would much rather have money saved than have money squandered.\u201D That is the difference in what is being offered here. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000363\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221583b5cb-f4e0-4981-97ba-193c338ff404\u0022\u003EPeople on the other side condescendingly talk of the poor not being able to save. At the moment the \u201Cpoor\u201D\u2014the people they refer to so blissfully at the Otara market, which I do not think they have ever been to\u2014are the people they refer to as not wanting to save. People do want to save, and people want to find a way in which they are supported in their saving. This bill builds on that scheme and gives an incentive to save. The Opposition would rather give that incentive to be spent right now, rather than saved. It is not a question of starving or saving, because with this legislation the same Government is returning money to those very people whom the Opposition refers to as starving. They are the people who will receive better money, because they will pay less when they go to the doctor and pay less for prescription charges, and those aged 25 to 44 are the last group in this respect. That is money that is being saved and it is being awarded from this Budget. Therefore, it is not a question of starving or saving; it is a question of supporting people into saving, and supporting people into security for the future.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000364\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221583b5cb-f4e0-4981-97ba-193c338ff404\u0022\u003EI find it absolutely hypocritical to hear members opposite talk about a sound economy. I must say it is always really interesting that whenever one is on the hustings with the National Party people they always say, very quickly: \u201CIt\u2019s all right; for those roads we\u2019ll just go out and borrow.\u201D Where would they be borrowing from? It would be from overseas. Who has to pay back the money for that? The taxpayer has to pay back the money, borrowed from overseas. This KiwiSaver is about growing capital in our country and growing security.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022 data-id=\u00223c501384fec840adb717b67331ac3420\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000365\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00223c501384fec840adb717b67331ac3420\u0022\u003EJOHN HAYES (National\u2014Wairarapa):\u003C/span\u003E I have heard some hypocrisy in my time and that last speaker definitely wants to take us back\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000366\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ed9ad81-05c1-4171-80c6-24fa02cade42\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221c86a88333b6483485adf57cf7d505a9\u0022\u003EThe CHAIRPERSON (Hon Clem Simich)\u003C/span\u003E: No use of that word, please. I will not want an apology; just go ahead. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000367\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022452f6f69cfcf4332949cd47703204c85\u0022\u003EJOHN HAYES\u003C/span\u003E: I thought I said \u201Cthat last speaker\u201D?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000368\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ed9ad81-05c1-4171-80c6-24fa02cade42\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e4763b5be368445bb4881d03e818c215\u0022\u003EThe CHAIRPERSON (Hon Clem Simich)\u003C/span\u003E: Just carry on.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000369\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224f4f8c177b834dedab65f0fdbb28d68b\u0022\u003EJOHN HAYES\u003C/span\u003E: Thank you, Mr Chair. Let me come back to the points being made by the last speaker. In my view this Government wants to take us back to the 1930s when we did not have a huge exodus from our country of people floating off to better terms and conditions in Australia. The Government wants to create the conditions that trap people here and stop them from leaving this country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000370\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003E This is a control-freak Government. The 2005 \u201Cchewing gum Budget\u201D tax cuts have now been abandoned. This Government is clearly saying to the community through this KiwiSaver legislation that it knows better than individual citizens how to spend their money. The Government has decided that people in my community in the Wairarapa should leave their money with the Government. They can spend it later; they cannot spend it now. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000371\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003EThe problem is that this control is unnecessary. What is necessary is that the Government stop its own excessive capturing and spending of the surplus wages that we might contribute to saving. The problem in this country is that Government spending is far too high. It is also not properly focused. I spent yesterday afternoon trying to help a member of my community in Masterton who is paying $230 a month for an unfunded Alzheimer\u2019s disease drug. This person lives in rented accommodation, is on a benefit, gets the maximum disability allowance, and does not have enough money to live on. How is that person going to engage in this savings scheme? I think of the standard person living in Kur\u012Bpuni with four kids, working for $11 or $12 an hour. Where is that person going to get the surplus from to contribute to this savings scheme? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000372\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003EThe reality is that at least half the people in this country who are actively engaged in the economy and are not on benefits are never going to have the surplus to engage in this scheme. What you are doing is grabbing savings and trying to capture people from leaving this country and going to Australia. You are trying to stem the outflow of people from this country by restricting their access to their own money. I am really concerned that a good proportion of my electorate, who are in a low-decile economic group, will never be able to afford your KiwiSaver scheme. The 1,000 bucks you are going to throw in upfront will not make the slightest difference. My community wants jam to put on the bread, not to give you the bread\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000373\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00220ed9ad81-05c1-4171-80c6-24fa02cade42\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ab96f60a7b3944be86d68e2868cca61d\u0022\u003EThe CHAIRPERSON (Hon Clem Simich)\u003C/span\u003E: I do not need the bread. You must not refer to me. You do that by saying \u201Cyou\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000374\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fd2a1454490248eab33d3d06cdb8e938\u0022\u003EJOHN HAYES\u003C/span\u003E: This Government is locking up tax cuts and future pay increases. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000375\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003ELet us see how much support this Government has when future generations of workers over the next 3 or 4 years say to their employers that they need a wage increase. For example, yesterday a constituent said to me that there had been no change in their accident compensation levy since last year, except for the bill, which was up 17 percent. I think of every person in my community who is paying 12 to 20 percent rate increases on his or her property. Where will those people find the surplus to lock up in a savings scheme when they do not have sufficient money to put into their pockets now to meet their costs of living? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000376\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ae94eea7-ba5f-4303-bf71-49e708bc9888\u0022\u003EAs my colleague Lindsay Tisch said, this scheme is about another tax imposition. It is a tax imposition on a community. It is a tax imposition on small business. The Government is saying that we have had 8 years of golden economic weather\u2014but what is New Zealand doing? It is slipping down the OECD table. This Government has never had a better opportunity to increase standards of living\u2014and what is it doing? It is sending us backwards. This savings scheme is going to send us further backwards. There will be a significant outflow of people from this community, because they are going to say that there will be more Government control, more bureaucracy, and more people telling us what to do.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022 data-id=\u002273df71f3b8184221b819efd565ec7b1a\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000377\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002273df71f3b8184221b819efd565ec7b1a\u0022\u003ECHRIS TREMAIN (National\u2014Napier):\u003C/span\u003E Before getting into the guts of the bill, I will just respond to Marian Hobbs across the other side of the Chamber. She is a member for whom I have a lot of respect and time. She told us a very nice story about her family, and about how they had learnt to save after the Depression and put away every dollar. But that is kind of rich coming from a member of a Government that for the last 7 years has spent an additional $20 billion\u2014$20 billion. This year in this Budget\u2014I am not talking about saving\u2014another $3.8 billion is being spent. I just think the member needs to take that into account before lecturing members on this side of the Chamber about saving.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000378\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EI also apologise to the Chair, Clem Simich, for the disparaging remarks from Mr Jones earlier on about my colleague David Bennett and various hair creams needed. I trust, Mr Chair, that you did not take that personally. I am just apologising on behalf of Mr Jones.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000379\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EI want to take a short call and address the Minister in the chair today, Mr Dunne. I have three questions for him; I would like him to take a call and come back to me on them. The first issue concerns the tax cut for companies and, more important, the businesses in this community that will not achieve that tax cut. They will be lumped with a cost on their businesses. There are three areas I want the Minister to address if he takes a call. There are 118,000 small to medium sized enterprises that are not corporatised but that are sole traders or partnerships. They will not get a reduction in the tax rate but they will have to meet the employer contribution. I understand that there is a $20 credit for each employer, and that that covers only up to $500 per week. But the average wage in this country is not $26,000; it is $45,000. How are we going to sell this policy to those 118,000 small to medium sized enterprises?\u2014I am sure there are a number of them in the Ohariu-Belmont electorate and certainly many in the Napier electorate\u2014because they will get an increase in costs. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000380\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EThe next area I would like the Minister to take a call on concerns exporters. I spoke to the Minister previously about a number of the exporters in the Napier electorate who at this point in time are not making a dot. They are faced with an economic climate in which it is very difficult for them to make a dollar. They will not have a tax cut but will be faced with the additional costs, above $500 per week, of an employer contribution. That cost will rise by 1, 2, 3, and 4 percent over 4 years, so it will be an additional 4 percent cost on their businesses. The Minister, Mr Cullen, told us that it is not a problem and that those costs will be negotiated as part of ongoing wage rounds. The problem is that the policy has become compulsory now, not optional. It is negotiable when it is an optional policy, but as soon as it becomes non-optional policy it will be off the negotiating table. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000381\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221368ba6c-25be-40f6-a2a0-8f81e1f78b79\u0022\u003EWe need to answer to the 118,000 businesses I talked about, to exporters, and to all those other businesses that have large labour costs that are much higher than their profit margins. For the majority of businesses in this country\u2014as Mr Woolerton knows\u2014the cost of labour is way higher than the profit at the bottom. On the one hand, the Government is saying that there will be a 3 percent cut at the bottom\u2014if the business is making a profit, then that is good\u2014but why a 4 percent increase over 4 years in the top line of expenses? I cannot see how that is a benefit to those businesses. I ask Minister Peter Dunne to take a call and let this side of the Chamber know how that sting in the tail will benefit those businesses I have talked about today.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002223de6bd3-0482-495d-88f4-7cc3f75d8442\u0022 data-id=\u00225989554a3a724c9fb194da6aafc1f174\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000382\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002223de6bd3-0482-495d-88f4-7cc3f75d8442\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00225989554a3a724c9fb194da6aafc1f174\u0022\u003ENATHAN GUY (National):\u003C/span\u003E Here we are today in urgency, and on this side of the Chamber we have about a dozen National MPs, while on the other side of the Chamber we can see two. That is how seriously Labour is taking this legislation\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000383\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022d4506109-be18-4b9d-9a79-1e15e2e2cd41\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002279bccbc2c8fa4dbeaee08dc4ef5aa2a6\u0022\u003EHon Chris Carter\u003C/span\u003E: I raise a point of order, Mr Chairman. The member knows perfectly well that he cannot refer to the absence of members, and obviously he certainly cannot count them. There are a lot more Labour MPs here than that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000384\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002223de6bd3-0482-495d-88f4-7cc3f75d8442\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220bb60c5d9bd54620a304ba90fcb257a0\u0022\u003ENATHAN GUY\u003C/span\u003E: As I was saying, we are taking this legislation under urgency extremely seriously. The Government wants to ram it through and not put it through to a select committee. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000385\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002223de6bd3-0482-495d-88f4-7cc3f75d8442\u0022\u003ESitting suspended from 1 p.m. to 2 p.m.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000386\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002223de6bd3-0482-495d-88f4-7cc3f75d8442\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223e1941e34cec4723a308c7bbb22be4eb\u0022\u003ENATHAN GUY\u003C/span\u003E: I am keen to see the Government actually explain how it will sell KiwiSaver, because I believe that a lot of the low-income earners in the area where I live, in the likes of Foxton, Shannon, parts of Levin, and \u014Ctaki, will struggle to see any benefits from KiwiSaver. So I want to see, and I want to hear today, how the Government will get out there and sell this policy. I heard Gareth Morgan talking the other day. He believes that 30 percent of New Zealanders think KiwiSaver is something to do with saving the kiwis in the bush in New Zealand. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000387\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002223de6bd3-0482-495d-88f4-7cc3f75d8442\u0022\u003ESo here we now have, under urgency, Dr Cullen ramming this bill through the House. He has bolted so much on to KiwiSaver that no one really understands it, and he is expecting the House to adopt it here today under urgency. It will be implemented on 1 July under a mad, mad rush. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000388\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002223de6bd3-0482-495d-88f4-7cc3f75d8442\u0022\u003EWhat we have seen under this Government\u2014under Labour, in particular, and Dr Cullen\u2019s ideology\u2014is no tax breaks for the last 8 years. He expects low-income earners to save more and reduce their spending, when we have a big-spending Government on the other side. So those hard-working people from the likes of Foxton, Shannon, and Levin\u2014some of whom are on $11.25 a hour\u2014who are expected to contribute $18 at 4 percent of their wage into KiwiSaver, will struggle, will they not? They will be in the smoko rooms, or talking while they are working. A worker might be thinking: \u201CWhat benefit am I going to get when I\u2019ve got high interest rates, I\u2019ve got my mortgage being rolled over right now\u2014where am I best to invest my money? Where am I best to put my hard-earned money? Is it better to put it into KiwiSaver at about $18-plus a week, or not?\u201D. That is what Mr Hughes will struggle to explain as he moves around the Otaki electorate, which is the most marginal in the country, and tries to sell this policy to hard-working New Zealanders.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000389\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002223de6bd3-0482-495d-88f4-7cc3f75d8442\u0022\u003E Right now, half the workforce, as Dr Cullen said when he addressed us here in Parliament, will not sign up to KiwiSaver. If people have mortgages, they are better off paying those off than investing in KiwiSaver. It will cost about 13 or 14 percent, on my maths. High interest rates plus tax mean that people will be better off paying off their mortgages than putting money into KiwiSaver. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000390\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002223de6bd3-0482-495d-88f4-7cc3f75d8442\u0022\u003EAnother thing I want members to explain is the duty of care and the trust deeds around KiwiSaver. Is the money secure? What is the reliability of people getting their money back when they are 65? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000391\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002223de6bd3-0482-495d-88f4-7cc3f75d8442\u0022\u003EThe other thing that is really important in this bill is the taxation part of it. We have seen the reduction of the \u201Cchewing gum tax\u201D. That has gone, for the low-income earners. The union members of the Labour Government know that employers will have to negotiate with union members, and I want to see how they will handle that, when employers say that they have contributed part of workers\u2019 pay increases because of the money they have contributed into KiwiSaver. So we will not see much of an increase in pay rates under this Government and under this proposal. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000392\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002223de6bd3-0482-495d-88f4-7cc3f75d8442\u0022\u003ENow we are seeing a huge divide between Australian and New Zealand wage brackets. In particular, in Australia they are receiving a third higher in their net weekly pay in the hand. It is no wonder we are seeing 700 people a week leave New Zealand and head off to Australia. I understand we have a saving problem in this country, but this will not fix it.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022 data-id=\u002244c218b36f794e7fbb76cbff5ea6561d\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000393\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002244c218b36f794e7fbb76cbff5ea6561d\u0022\u003EDARREN HUGHES (Labour\u2014Otaki):\u003C/span\u003E To assist my constituent Mr Guy, I seek leave to table a document indicating that the National Party supports the KiwiSaver scheme.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000394\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022462d3189aab744899cc764d3c0ca9e86\u0022\u003EThe CHAIRPERSON (H V Ross Robertson)\u003C/span\u003E: Is there any objection to that course of action being taken? There is.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022 data-id=\u0022c6be4a65a869405cbf8cef92ae8c979b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000395\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022c6be4a65a869405cbf8cef92ae8c979b\u0022\u003ER DOUG WOOLERTON (NZ First):\u003C/span\u003E That contribution from Mr Nathan Guy was another of what I call the National Party financial adviser speeches. The people who will be better off under the KiwiSaver scheme, the people who will be advantaged by it, are the people who just know they need to save. They have been unable to save hitherto, because there were no incentives, no help from the Government, and no help from employers or anybody else. But those people know they should save. It saddens me that the National Party does not give people, apart from the wealthy, the credit for wanting to do what they believe to be the right thing for themselves, for their families, and, in fact, for the country. People do want to save. They do want to put money away for the future. They do want to have the security that comes from doing that. But hitherto they have been absolutely unable to do so. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000396\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EThe KiwiSaver scheme\u2014especially the enhanced KiwiSaver, which we are talking about now\u2014enables people, for just about the first time ever, to save. We cannot stand here as New Zealand First and not applaud that. We have made an issue of the need for savings from the time we first came to Parliament, and we will continue to do so. We are proud to support this bill, and we do not take any heed of the manipulations that the National Party thinks people will have to go through in order to decide whether they will be part of this scheme. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000397\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EI want to attend to the issue of 50 percent participation in KiwiSaver, which is being made a lot of. It has been said people cannot afford to participate in KiwiSaver and will not participate, and, in fact, only 50 percent of people will participate. The community is just not divided up like that. There will be a time when people who do not participate in the initial stages will participate. They may not get all the benefits that early participation will give to anybody\u2014we all know the rules of compounding interest\u2014but they will be able to participate at some stage. It is not right to talk about only 50 percent of people participating in KiwiSaver, then, in the next sentence\u2014or in the same sentence, many times\u2014to talk about communism, compulsion, and our socialist regime. If there was compulsion, people would all be in KiwiSaver. I do understand that some members of the National Party have taken the time to at least say that the compulsion component they are talking about is on the employer when the employee decides to participate, and that is certainly true. But one cannot talk about a 50 percent take-up on this issue and then talk about compulsion in the same breath, because that is just not credible. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000398\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EWe in New Zealand First have talked for years and years about the issue of encouraging saving. I have congratulated Mr Dunne before; I will do so again. I will also congratulate the leader of New Zealand First, its deputy leader, who is here, and\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000399\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ca78253b7e1444f1a9242bd4ebc8dc0f\u0022\u003EDr the Hon Lockwood Smith\u003C/span\u003E: What about anybody else?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000400\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228a2af8014e4547ecb427ab49ed70c12f\u0022\u003ER DOUG WOOLERTON\u003C/span\u003E:\u2014I was just going to do that\u2014and the whole caucus, because we have stuck to our guns over this issue. We have not played politics with it. Whenever a bill has come up that has had a savings component to it, whether or not we agreed with it in its entirety we voted for it. There are many cases we would like to see. I am sure many other members of this Parliament would like to see the company tax rate come down to 20 percent\u2014not just equal with Australia\u2019s rate, but more competitive than it. But that is not to be, at this point, and we understand that in this Parliament most change is incremental. When it is not, it is really, really scary, so we would look forward to further enhancements not only of KiwiSaver but of a lower tax rate variety to the taxation system.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u002236501b53e31643349fbf1f9fc11a8e3e\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That clause 1 be agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 61\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 49; New Zealand First 7; United Future 2; Progressive 1; Independent: Copeland ; Independent: Field.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 48\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 48.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EClause 1 agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000401\u0022\u003EThe question was put that the following amendment in the name of the Hon Peter Dunne to clause 2(4) be agreed to: \u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000402\u0022\u003Eto omit \u201C27(1),(2),(3),(4),(5), and (7)\u201D, and substitute \u201C27\u201D.\u003C/p\u003E\u003Ca id=\u0022a6bbfdbdd8a0412fb7487b0d0ba42513\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That the amendment be agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 61\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 49; New Zealand First 7; United Future 2; Progressive 1; Independent: Copeland; Independent: Field.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 48\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 48.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAmendment agreed to.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u0022827fc760b5e04cbc993893128755dd1d\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That clause 2 as amended be agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 61\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 49; New Zealand First 7; United Future 2; Progressive 1; Independent: Copeland; Independent: Field.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 48\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 48.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EClause 2 as amended agreed to.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000403\u0022\u003EBill reported with amendment.\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000404\u0022\u003EReport adopted.\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000405\u0022\u003E\u003Cspan class=\u0022HpsSubproceedingHeading\u0022 id=\u0022d6bb6ca3941642bd9e3d26d987b0a36a\u0022\u003EThird Reading\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022 data-id=\u00222069c87c789b4f31b594166bf8838e27\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000406\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00222069c87c789b4f31b594166bf8838e27\u0022\u003EHon PETER DUNNE (Minister of Revenue):\u003C/span\u003E I move, That the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill be now read a third time. This bill has two key provisions. The first is to bring in the mechanisms for lowering the current company tax rate to 30 percent from the beginning of a company\u2019s 2008-09 income year, and the second is the introduction of a tax credit for people saving for their retirement through KiwiSaver or a complying superannuation fund. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000407\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EI have to report to the House that the debate during the Committee stage was wide ranging, but hardly edifying. The most significant point to emerge from the debate was that National went on record voting against a cut in the corporate tax rate. Many of us were surprised, because we had always seen the National Party as the friend of business. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000408\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EWe were very surprised at National\u2019s actions today, but we are even more surprised when we consider some of the history. Some of us who have been around for a while recall that the last time the business tax rate was cut, in 1988, National also opposed that. I remember comments made by Mr Groser earlier in the debate on this bill that National could not possibly support this bill because it was the Opposition. So I will give National members some credit for their 1988 position\u2014they were the Opposition, and presumably were applying the Groser philosophy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000409\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003ELet us think back over the years about the National Party and company tax. As far as we can tell, National may have made a downward adjustment of tax in about 1966, but, subsequent to that of course, the biggest intervention it made in the area of company tax, in the late 1960s, was the introduction of a payroll tax. Members will remember the debate that went on about Sir Robert Muldoon\u2019s payroll tax. That tax was repealed in, I think, the early 1970s. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000410\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThen there was the period of the third National Government, when no business tax adjustments were made and every other tax went up through the roof. We had a personal tax rate of 66 percent by the time that National left office. Here we are today, cutting the company tax rate back to 30c in the dollar, and the Opposition is voting against it. So when we look at history, I suppose we should not be surprised at National\u2019s stand today, even if it did take a few of us on to the back foot when National members stated it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000411\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThe debate was fascinating as far as KiwiSaver was concerned. Everyone who participated in it, from right around the Chamber\u2014and I acknowledge particularly the contributions from my friend and colleague Mr Woolerton and from the members on the Government side\u2014is in favour of people making provision for their retirement. Everyone thinks the idea of having long-term saving is a good one. Everyone thinks it is something we ought to encourage for growth. I do not know exactly how many times the Australian experience was quoted in the debate, but it was quoted frequently. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000412\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EYet when the crunch comes and we are introducing a system that not only provides for a dedicated, long-term saving fund but also gives real incentives to employees if they choose to become involved\u2014with matching contributions from an employer and a matching tax credit for the employee in the first 4 years\u2014the Opposition votes against it. I find it a little difficult to understand how one can be for saving, for thinking of the future, and for all of these things, but against the measures contained in this bill. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000413\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThis bill is a critical part of the Budget package. The KiwiSaver changes will take effect from 1 July of this year. I can assure those members who raised some concerns about this process being rushed that we are well on track to make it effective and operational from 1 July, and I am sure that the uptake will be very high. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000414\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EThere was a very interesting tenor to the debate in the Committee stage too, where some National members said that only 50 percent of people will take this up. As Mr Woolerton pointed out, the argument was then turned around to say that we cannot use compulsion because compulsion is a form of totalitarianism, but that it was still wrong that only 50 percent of people will take this up. [Interruption] I think Mr Duynhoven is right; National members seem to want a compulsory voluntary scheme. This is called having it both ways\u2014playing off both sides against the middle and getting nowhere. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000415\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f555a23a-d230-4f03-80ba-a44e6ec8bd29\u0022\u003EWith those few observations about what was, as I say, an illuminating but not particularly edifying Committee stage, I am very happy to move the third reading of this bill.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022 data-id=\u00226d1e35a4cb2c47dfad79b3ea065ffd44\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000416\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00226d1e35a4cb2c47dfad79b3ea065ffd44\u0022\u003EDr the Hon LOCKWOOD SMITH (National\u2014Rodney):\u003C/span\u003E I cannot say I am pleased to be speaking to the third reading of this Taxation (KiwiSaver and Company Tax Rates Amendments) Bill, which is being rammed through all stages under urgency. National, of course, is perfectly happy to support the bit of the bill that reduces the corporate tax rate from 33c down to 30c; it is the rest of this bill that we do not like. The Government claims that subsidies for the KiwiSaver scheme are necessary because silly, stupid, dumb New Zealanders have not been saving enough money. That is Dr Cullen\u2019s attitude: stupid Kiwis have not been saving enough money. Dr Cullen knows better, and he will damn well make them save! \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000417\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E I want to put this to members. How on earth are ordinary Kiwis meant to save money when Dr Cullen now taxes them $20 billion more each year than when he came into office? How the hell are Kiwis meant to save money when Dr Cullen is taking $20 billion more off them? He is taking their hard-earned earnings off them and leaving them nothing to save. Dr Cullen admitted in the House the other day, in answer to a question\u2014 \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000418\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222b0398d01ed443128ee8363520af5b83\u0022\u003EThe ASSISTANT SPEAKER (H V Ross Robertson)\u003C/span\u003E: There is far too much noise coming from this side of the House, and there are many members who are not in their own seats. I would refer them to Speakers\u2019 rulings 58/4 and 59/1.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000419\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022af6e8e77b1794341a154bcfd98580d7c\u0022\u003EDr the Hon LOCKWOOD SMITH\u003C/span\u003E: We do not mind, because we know that those members are upset over this Budget. New Zealanders are not stupid. They know that Labour has been taxing them far too much since it came into office. As I was about to say, in answer to a question in the House the other day, Dr Cullen admitted his cumulative operating surplus. Does Dr Cullen remember the answer he gave to the question about what was the cumulative operating surplus since Labour came into office? Do members of the Labour caucus remember what the answer was? It was $35 billion. The cumulative surplus in the operating balance, excluding revaluations and accounting changes, since Labour has been in office is $35 billion. Dr Cullen has taken that off Kiwis, and then he wonders why Kiwis cannot save! What has happened as a consequence is that Kiwis starved of cash have had to borrow. Dr Cullen has taxed them $35 billion in cumulative surpluses and left ordinary hard-working New Zealanders having to borrow. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000420\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EDr Cullen thinks he is so smart, that he has taxed them on all this money, paid back Government debt, put money into the super fund, and left New Zealanders starved of cash. They have had to borrow money while Dr Cullen thinks he is so clever. We are opposed to this bill because Labour should be giving New Zealanders back some of the money they have earned. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000421\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EThis bill is now, of course, subsidising Dr Cullen\u2019s KiwiSaver scheme. It is interesting to look at what objective analysis says about that, putting prejudice aside, and looking at what the retirement policy and research centre at Auckland University says about it. We know that its spokesperson, Michael Littlewood, has a particular view on superannuation matters\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000422\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00228e8419f2c18c42bdb59d3a31eae36f5d\u0022\u003EHon Dr Michael Cullen\u003C/span\u003E: Ha, ha!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000423\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a0efca2ef8c84751a7e31aaa8e58c4f1\u0022\u003EDr the Hon LOCKWOOD SMITH\u003C/span\u003E: Dr Cullen should not laugh at Auckland University. The work of that research department is actually objective analytical work. It shows that\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000424\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022709979769fa24f9d9a62746446e669f3\u0022\u003EDarren Hughes\u003C/span\u003E: Gerry Brownlee told him that.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000425\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d471bddfca8540cead90ddda9cab4f98\u0022\u003EDr the Hon LOCKWOOD SMITH\u003C/span\u003E: Dr Cullen actually once used to agree with him. Back in 2002 Dr Cullen said that it makes no sense to subsidise savings. Dr Cullen actually said that in 2002 and, of course, the research centre at Auckland University has shown, through analytical work, that subsidising savings does not work. So not only is Labour taxing New Zealanders to oblivion, it is now going to subsidise its KiwiSaver scheme because it knows that without the subsidies it will do nothing, yet close analysis of subsidised savings schemes shows they do not actually work. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000426\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003ENational members have been pointing out that, sadly, low to middle income wage and salary earners are not going to benefit at all from any of this. In fact, they are going to suffer. If members look at page 16 of the Executive Summary Budget document, they will see that it very conveniently spells out the increase in spending in this year\u2019s Budget. One of the issues that has not been given a lot of coverage yet is the fiscal stimulus in this Budget. Labour has continued its track record of spend, spend, spend, and the fiscal stimulus is more than the Reserve Bank of New Zealand was expecting. That means that mortgage rates will stay higher for longer. Low-income Kiwis will not be able to afford to put their 4 percent into this KiwiSaver scheme, so they will not get any benefit out of those subsidies and get no benefit from that money-go-round. In fact, they suffer; they will pay tax to fund those subsidies and will not get any of the subsidies. So the first thing is that low-income Kiwis pay the tax for those subsidies but will not get any of those subsidies. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000427\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003EThe second thing is that their mortgage interest rates will stay higher for longer because the fiscal stimulus in this Budget is higher than had been expected by the financial markets. The third thing is that employees will get lower wage increases, because, as Dr Cullen himself said yesterday, there should be a trade-off, so they will get lower wage increases. And what is more, finally, the \u201Cchewing gum tax\u201D reductions that had been promised have been killed off by this Budget. It is little wonder that Laila Harr\u00E9, a former supporter of the Labour Party, said she was so disappointed with this Budget and so disappointed with this legislation. It will hurt hard-working, ordinary, low-income New Zealanders. I have in my hand here today\u2019s\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000428\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022c437bda8-4741-4ac5-89ab-b0818e1ab9fa\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227e971785a42f4400ad099855da2ff1e9\u0022\u003EDarren Hughes\u003C/span\u003E: It will be great for Working for Families.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000429\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ac169d29-4849-42c2-a4a7-f344fd416503\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f177996b7226426e988a7a389d3ecba9\u0022\u003EDr the Hon LOCKWOOD SMITH\u003C/span\u003E: The junior Labour whip, Darren Hughes, should listen. These are the latest statistics today on New Zealanders leaving permanently. Does Mr Hughes know what these statistics show? The exodus is carrying on. In the year ended April, one-third more New Zealanders went than just 2 years back. It is even worse. Up until last month we were losing them only to Australia. These statistics released today show that the net permanent loss or gain is not just a permanent loss to Australia, it is now a permanent loss to both Europe and the Americas. Even when we allow for the huge influx from Asia, we have lost New Zealanders in the month of April\u2014a big increase in the numbers going\u2014because they are sick of \u201CDr Cullen knows best.\u201D They are sick of \u201CLabour knows best.\u201D They are going where they have more opportunity for themselves and their families. We will vote against this third reading.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022 data-id=\u0022b4e96689e08c41178fec2ad2b197df8b\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000430\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022b4e96689e08c41178fec2ad2b197df8b\u0022\u003EHon Dr MICHAEL CULLEN (Minister of Finance):\u003C/span\u003E I was really pleased by that speech, because at last Dr the Hon Lockwood Smith PhD got really angry. He really threatened to burst his budgie smugglers in that one, it seemed to me. What did we hear from him? Let me tell him about Treasury. Treasury has changed its mind on savings. He can go to the website this afternoon\u2014it has just been released, I think. Treasury is saying there is a case for supporting savings in New Zealand, which is not what it said 2 years ago, 4 years ago, 5 years ago, or 6 years ago. There is a need for savings. That man, who just preceded me and gave some actuarial calculations, receives a $400-a-week subsidy from the taxpayer for his superannuation. That is not his salary; that is a subsidy on his superannuation. He does not want ordinary New Zealanders to get a $20-a-week subsidy, plus a $20-a-week subsidy to the employer to help to pay for the employer\u2019s contribution. There is a big \u201Ch\u201D word for that, which we are not allowed to use within this Parliament.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000431\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022765a300f18954d2cade4f7f972eae067\u0022\u003EThe ASSISTANT SPEAKER (H V Ross Robertson)\u003C/span\u003E: No, no, no.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000432\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e6a40266d7794ee78dab26cbea774e09\u0022\u003EHon Dr MICHAEL CULLEN\u003C/span\u003E: That is right, Mr Assistant Speaker, we are not allowed to use that word within this Parliament. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000433\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ESo what have we heard? We heard from Mr English. Mr English\u2019s fundamental, basic, brilliant economic insight was that we should increase our savings but we should not reduce our consumption.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000434\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002268bfaaa873864b389ec288d72756f692\u0022\u003EHon Bill English\u003C/span\u003E: Yes.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000435\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022c634b2f9b51e4831a96ba7693a9b0f68\u0022\u003EHon Dr MICHAEL CULLEN\u003C/span\u003E: No. That is exactly what he said yesterday. But if we are to increase our savings, we have to reduce the rate of growth in our consumption. And if we want to sustainably grow our economy, we have to increase our saving and our investing. Mr English is caught betwixt and between. He does not believe there should be large-scale tax cuts at all in this Budget, whether it be for business or otherwise\u2014none. That is why he was banned from television and radio after 2 o\u2019clock yesterday afternoon, and it is why Mr Key has had to rush from pillar to post, trying to fill in and telling people they can have everything. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000436\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EDr the Hon Lockwood Smith PhD told us we could have tax cuts, because he is a brilliant economist. He told us that we had accumulated surpluses of $35 billion and we could have spent all of that on tax cuts. What that means is\u2014I ask members to just stop; I will put it simply\u2014that an increased debt by $35 billion, plus the interest on that $35 billion, would more than double the gross debt of the New Zealand Government in the space of 7 years, compared with where we are. That is the Opposition\u2019s remedy. It is to borrow and spend its way to prosperity, because that\u2019s what\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000437\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022074acbec8c0b49f7a7ad53806c3649d8\u0022\u003EHon Members\u003C/span\u003E: Jacqui Dean!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000438\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223624b06e2f254b90859c8f50e147830b\u0022\u003EHon Dr MICHAEL CULLEN\u003C/span\u003E: No, no. Jacqui Dean was getting it from overseas. But it would take a large Jacqui Dean shopping basket to get $35 billion from overseas, when she went out to collect it from somewhere or other. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000439\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EWe heard Mr Brownlee say on the radio that we should increase our savings, but that there should be no risk of anybody making any loss on their savings. Well, that is a pretty interesting guarantee. I do not know how we would do that\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000440\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002215233a526a8046b58dc7c72bf0f9effa\u0022\u003EHon Bill English\u003C/span\u003E: Who said that?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000441\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00226b87fd6c8cad4b2594f937f7e954a09a\u0022\u003EHon Dr MICHAEL CULLEN\u003C/span\u003E: Gerry Brownlee said that; I heard him on the radio, actually\u2014just after 2 o\u2019clock. Yes, I can see him sort of puffing and looking worried about that one. Goodness me\u2014he should not be let loose on economic matters, either, I tell Mr English. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000442\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThen, of course, we had one from Mr Key, which was that there should be no cost to employers, but that there should be no wages/superannuation trade-off. Well, that is interesting; I do not know how anyone could achieve that one. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000443\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EWhat we are hearing from members opposite is\u2014let us go through the arguments. The employer contribution is set at a maximum of 4 percent. Assuming a 50 percent sign-up, that is 2 percent of an employer\u2019s wage and salary bill. Assuming that the Government pays half of that through the tax credit, it becomes 1 percent of the total wage and salary bill\u2014and Mr Key, Mr English, and Dr the Hon Lockwood Smith PhD say that the entire wage growth over the next 4 years will be forgone in order to pay for a 1 percent increase in the wage and salary bill\u2014the entire increase. That is a whole new code of economics. It is no wonder National is close to Alasdair Thompson, the former social credit finance spokesperson from the Northern Employers and Manufacturers Association. It is no wonder the main critic of KiwiSaver in the public arena is one Gareth Morgan, who failed in a tender to be a KiwiSaver default provider. All right\u2014let us get that straight in the public arena, before he goes too far off on his little crusade around KiwiSaver at the present time. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000444\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003ENational is arguing that we should not have tax cuts for business. But we have an interesting situation: for the first time since 1988, Parliament has voted on a tax cut for business, in terms of the corporate headline rate, and the National Party has opposed it at every point. The National members have fought it to the death, to the limit of their abilities; they have fought this bill to a standstill in Parliament. Then they voted against a $20-a-week tax credit for employees\u2014not against the compulsory provisions for employers\u2019 part; that is in another bill, which has been sent off to a select committee. This bill deals with only the KiwiSaver employee tax credit. Those members voted against that credit, when I suspect that almost every member of the National caucus belongs to a taxpayer-subsidised superannuation scheme, which they contribute to and the taxpayer supports.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000445\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a5ee2b1aaf62465b950ca5c0bc48684b\u0022\u003EHon Member\u003C/span\u003E: Oh, that\u2019s fair enough.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000446\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223dbafc25bd1a469ea80b8fa564d8c880\u0022\u003EHon Dr MICHAEL CULLEN\u003C/span\u003E: That is brilliant\u2014it is all right for them. That is different, you know. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000447\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EThen we heard the argument that ordinary people cannot afford to save. Well, let me run through that, for the benefit of those members. If people change their jobs\u2014as some members will after the next election, given this Budget\u2014they will be compulsorily enrolled in a KiwiSaver scheme. They will have to make a conscious decision to pull their money out at that point, because from their first payslip their KiwiSaver contributions will be deducted. If they can continue on with those contributions, they\u2014low-income earners\u2014will then have their savings trebled, with the tax credit to the employee and the tax credit from the employer. The net cost to the employer, for a low-income earner, will be zero. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000448\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022dccdb09385114ea5bb9486dfc7b77980\u0022\u003EHon Member\u003C/span\u003E: How much?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000449\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022094a3249b3834674a1b43f808e1cb7db\u0022\u003EHon Dr MICHAEL CULLEN\u003C/span\u003E: Zero\u2014to the employer! Is that a good deal, or is that not a good deal? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000450\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003EWell, National members say that, no, we should not do that. But they have no alternative. They say to low-income people that they might get a $2 or $3-a-week tax cut\u2014but those people will not save that. That will get lost in the noise, for people on low incomes. Those people will not save that. So what answer do the National members have, at all?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000451\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222b39b29e7c7042e49541ceeffa1baa4d\u0022\u003EHon Member\u003C/span\u003E: None. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000452\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002271a54a3e8df343a3b0873337acacae33\u0022\u003EHon Dr MICHAEL CULLEN\u003C/span\u003E: None\u2014they have lost it; they have lost the opportunity there.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000453\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222d2437a48cd948368933abcc42f98fd7\u0022\u003EHon Bill English\u003C/span\u003E: Oh, yeah, yeah, yeah!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000454\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00227f8c14fb-b919-46ef-866b-8db68cfa4cf0\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022116900713bf84f93a0037f780e49fadf\u0022\u003EHon Dr MICHAEL CULLEN\u003C/span\u003E: And I will make a firm projection, as Mr English goes \u201Cyeah, yeah, yeah!\u201D; he is going to get up and talk about the workers, again, in another couple of minutes. I predict that by September or October of next year, or whenever we have the election, National will be supporting this scheme\u2014just as they support the original KiwiSaver scheme, as they support 4 weeks\u2019 holiday, as they now support nuclear-free New Zealand, as they support the Employment Relations Act, and as they support everything they have fought against at successive elections. I am just wondering what the hell I can get away with, given the way those people will flip-flop.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022 data-id=\u002281180d4b98604b018d5fb86f49f39198\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000455\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002281180d4b98604b018d5fb86f49f39198\u0022\u003EHon BILL ENGLISH (Deputy Leader\u2014National):\u003C/span\u003E I want to make just one point to Dr Cullen. If he is going to claim that KiwiSaver will bring very large benefits to the New Zealand economy because of the size of its effect, he cannot then turn round and say: \u201CBut you\u2019ll only have to give up 0.5 percent of your wage increases over 4 years.\u201D The fact is that if it has very little effect on moderating wages, it will not generate much in the way of new savings. The fundamental economics he will have to explain to people is that to increase our savings we have to reduce our consumption. That is the only way to do it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000456\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003ELabour MPs will have to go to the people they have been talking about in this debate\u2014like the person in the supermarket working for $11.25 an hour. Charles Chauvel, and some other champagne socialist over there, said that they would go into supermarkets and tell those workers on $11.25\u2014no, on $12 an hour, because they will be on the minimum wage\u2014that they should put aside $18 a week, that it will make them better off, and they will get a tax credit when they turn 65, in 45 years\u2019 time. I suspect that if we took a vote in a morning-tea room, those former Labour voters would vote to take the tax cut Labour promised them then withdrew. That is the other thing that low and middle income earners will understand from this Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000457\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EFor two elections in a row, Labour promised those earners \u201Cchewing gum tax cuts\u201D, and those cuts were rational; Peter Dunne had pushed them on to Labour. We were told that low and middle income people should have their taxation thresholds adjusted for inflation. I think it was going to cost $400 million. But in a spend of $3.8 billion, Dr Cullen could not find it in his heart to give them something\u2014just something. So the effect of this Budget is as follows: the 50 percent of people who go into KiwiSaver will have to reduce their net pay to get the benefits. Is that right? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000458\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002238ba1f8ed4384b9e81a50f0a5831b146\u0022\u003EHon Members\u003C/span\u003E: Yes, that\u2019s right.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000459\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022fcbe3e088b34488bb67aff1ad4bf41bd\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: People on higher incomes can do that or\u2014much more likely\u2014get their savings from other places and put them into KiwiSaver. That is what these schemes all do; they shift money around. That is where the bulk of KiwiSaver money will come from. But low and middle income people are worse off. They are worse off. They will have to drop their net pay, when they are already under pressure, to get the $20 tax credit in 20 years\u2019 time, and they will all be worse off because they will not get the tax cut Labour promised them. That is what Labour is going to regret over the next 18 months\u2014that it deserted its core constituency. People who have higher incomes, and people who are more likely to vote National, will bank the profit. They will bank it because they will say that Dr Cullen should have been reducing taxes. He was not, so they will take this bit. And they will not give him any credit for it, whatsoever. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000460\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThere is another issue of equality that Labour used to care about: equality among retired people. One of the effects of KiwiSaver is that it will increase inequality among retired people. It is a Government subsidy to increase inequality among retired people, because the people who get the biggest benefit of $20 a week for the next 30 years are people on higher incomes. This will leverage them up into even higher incomes when they retire. People who work part-time, who are in and out of the workforce, who are on benefits, who are seasonal workers, who are mothers at home, or who are invalids, sick, or disabled will not get that leverage, and they will get national superannuation as they always would. Is that right?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000461\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00224a11ce4e-9fb3-4738-b0be-5a9f81d975da\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002273dbddc87fa04237b512b35186b772a2\u0022\u003EHon Maurice Williamson\u003C/span\u003E: What does Dr Cullen say to that?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000462\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223ffc7ed55f4e47199c4d37ac2f42f925\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: How is Dr Cullen going to explain that? He came into politics to reduce inequality, and he will go out of politics creating the largest Government subsidy for increasing it among old people\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000463\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022a83ea07a-806c-45ad-95bb-eb2c481cd0e2\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00220d1658dc3aba467f88d97e23cd7e95fc\u0022\u003EHon Tony Ryall\u003C/span\u003E: He\u2019s going to eat the rich, and now he\u2019s feeding them.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000464\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00227a55533a5fef4bd6b0ff99834dc879b0\u0022\u003EHon BILL ENGLISH\u003C/span\u003E: And he is feeding us. He goes on about how bad the subsidy on our superannuation is. Why is he increasing it? Is it because he plans to retire? Is that why he is doing it? I presume it is. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000465\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe other thing that has come out of this \u201Cmoney-go-round Budget\u201D is the illusion, which Dr Cullen is trying to create, that there is some kind of cargo cult about savings\u2014that if the Government puts some money into people\u2019s accounts, somehow the country will be a whole lot better off. There is a place for incentives on savings, and National members have indicated that we support KiwiSaver. The big issue ahead of us is how far that support should go, and in making that decision we will take into account the fact that savings are not everything in an economy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000466\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EThe economy has actually been growing about 3 or 4 percent a year on low savings. So we can have growth without having a whole lot of savings. Japan is drowned in savings, actually. Its savings have been so large that it has had a 10-year recession and a 1 percent interest rate. It has had no growth at all. I do not think that even KiwiSaver is going to achieve that. The point is that we need a much more balanced approach. There is no point in making people save, and therefore compelling investment of their money, unless there is a productive, growing economy in which to invest. That means an economy with decent education standards and an infrastructure where Government money can actually be spent after it has been promised. It means an economy where labour productivity is growing, an economy where young people feel that if they stay in this country they will get incomes higher than they would get if they went across the Tasman to Australia, and an economy where people believe they\u2014not just the Government\u2014have a say about their money. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000467\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EUnless we have all those other factors, savings will not contribute to the growth of this economy. Savings are a quantum of money. What is done with them is what matters. So the Government may grow the pile of savings\u2014I am a bit sceptical; there may be some more\u2014but on the other side of the equation it will gradually suffocate all the incentives for the economy to improve and for incomes to rise. You see, Labour members might not understand this because of where they are in the electoral cycle. Labour members are all heading towards retirement, but the country is not. The people of this country are not all heading for retirement at the next election. Government members are winding down when we need to wind this country up. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000468\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EOur message to 20 to 25-year-olds in New Zealand will be that they can choose either to support a Labour Party that is totally focused on building up money to deal with demographic risks that are 30 years away, or to support a party that will help them save but will also help make a productive economy where they can invest that money and lift their incomes. I found when talking to 20 to 25-year-olds that they do not regard what is going to happen in 2040 as a vision for their future. Labour\u2019s vision for today\u2019s 20-year-olds is that they can have a big bank balance when they are in a retirement home. The best they can hope for in this country is to put up with low incomes, be told by the Government what to do with all their money, and get a bank balance when they are sitting in a rest home. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000469\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022bb158206-360b-4757-8d72-f7d0994e1fb3\u0022\u003EWell, National does not believe in that; fundamentally, there is a basic philosophical divide. Dr Cullen is absolutely dismissive of what New Zealanders would do with an extra dollar. He says they will waste it. The only person in this country who is capable of deciding what to do with an extra dollar is Dr Michael Cullen PhD. Well, there is a choice: back Michael Cullen or back New Zealanders. National backs New Zealanders. It believes that they can make good decisions about a dollar they earn. It believes that a dollar taken off them in extra tax by the Labour Government is likely to be wasted.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000470\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022af9d562c3706419eb131e304339505f3\u0022\u003EThe ASSISTANT SPEAKER (H V Ross Robertson)\u003C/span\u003E: Just before I call the next speaker, members are advised that New Zealand First has split its call. Each member speaking will get 5 minutes. The bell will go at 4 minutes, indicating 1 minute remaining.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022 data-id=\u00220dcb6c3aa04b4057b909135b22092ae0\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000471\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00220dcb6c3aa04b4057b909135b22092ae0\u0022\u003ER DOUG WOOLERTON (NZ First):\u003C/span\u003E Unfortunately, the deputy leader of the National Party is doing exactly what speakers from the National Party have been doing all day\u2014that is, dealing with these things in cold isolation. He knows, as the National Party knows, and as we all know, that this is one of a raft of measures, one of which is the Working for Families package. Working for Families was a tax break, but it was a targeted tax break. It was a targeted taxation concession, and we in New Zealand First agree with that. It is not about giving back, and it is not about putting people on welfare; it is about targeting taxation.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000472\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EI was alarmed to learn\u2014and I had not realised this even though I spent a fair number of years in the National Party\u2014that we have to go back to 1966, or thereabouts, to find the last time the National Party gave a tax break to companies. I did not realise that. In all my years in the National Party, I have to say that I was very proud of the fact that I believed we were a low-tax organisation. I believed that we were business-friendly. I believed in all of those things. I believed that we were good for families. I believed all of that. But it took me until many years later\u2014after 11 years of being in this House\u2014to find out that it was good old \u201CKiwi Keith\u201D\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000473\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222f4c5e949c214b679902c7d3d718b4de\u0022\u003EDavid Bennett\u003C/span\u003E: What are you doing?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000474\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022d3b41e04fd674a83806345ed47345aff\u0022\u003ER DOUG WOOLERTON\u003C/span\u003E: I am supporting a tax cut; National is voting against it. It was back in the days when dear old \u201CKiwi Keith\u201D was the Prime Minister that National last gave a tax cut to the people of this country.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000475\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EIn the last election National ran a campaign on tax cuts, aided and abetted by the Exclusive Brethren\u2014maybe they put their hands up National\u2019s back\u2014yet National has had no history of tax cuts since 1966. I am not trying to shove that up National; I am just saying I am surprised that, given this wonderful opportunity, National does not grab it with both hands in order to rectify the situation by at least going into the next election saying: \u201CAt least we voted for a tax cut. There\u2019s been nothing from National since 1966 to 2007, but we voted for a tax cut in 2007. There\u2019s our track record, and we will cut some more after the 2008 election.\u201D But National is not even doing that, which is sad. I did not even know of that history, and I think it is a bit unfortunate.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000476\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003EA lot of this legislation, over a number of bills, lines up our taxation law with that of Australia. It is cutting the corporate tax rate to line up with the rate of Australia, a country with which we must be competitive. It is Australia\u2019s savings\u2014its mountain of money\u2014that is being used to come over and buy our companies. New Zealand First\u2019s concession, in terms of the global economy, is that we would not even mind if Australians came over here\u2014accent and all\u2014and started up new businesses. But they do not do that. They come over here and buy things like banks, and buildings in the central business district of Auckland; they do not come here and involve themselves in entrepreneurial activity. Thank you.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022e3dc3d88-a571-4ed7-a4b4-b66dedd6134b\u0022 data-id=\u002269e5988163ac4ed199fb5d2b95d077e1\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000477\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e3dc3d88-a571-4ed7-a4b4-b66dedd6134b\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u002269e5988163ac4ed199fb5d2b95d077e1\u0022\u003EPETER BROWN (Deputy Leader\u2014NZ First):\u003C/span\u003E I have been tied up outside the House for much of the morning. However, I had a brief look at the bill before I left and I thought: \u201CThis will not take too long.\u201D I do not even know why this has to go through in urgency today. I would have thought this bill would have huge support in this House. This is what it states: \u201CTax rate changes. The bill reduces from 33% to 30% tax rates for: companies: unit trusts: group investment funds (GIFs) that are taxed as if they are companies: widely held superannuation funds: widely held GIFs that are taxed as if they are trusts: life insurance policyholder funds. It also caps the top rate for PIEs at 30%, instead of the previous 33%.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000478\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e3dc3d88-a571-4ed7-a4b4-b66dedd6134b\u0022\u003EI knew in my heart that these guys would go for that. I did not know how Labour came up with it, but I knew that the National Party would support it, because it has been pushing this to the public and through the House, time and time again, for I cannot remember how long. Now that National members have the opportunity to vote for it, they are going to vote against it!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000479\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00222a849ed4-a817-45a7-8b86-dbc9dd210193\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00223a0a2ac052324f2681fe882c850d9f43\u0022\u003EJill Pettis\u003C/span\u003E: What?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000480\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e3dc3d88-a571-4ed7-a4b4-b66dedd6134b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022dd8e5a5ace9a4b33ad0a041013a35a25\u0022\u003EPETER BROWN\u003C/span\u003E: I know, it is beyond belief. These tax cuts\u2014and that is what they are; no ifs, no buts, no maybes\u2014will encourage savings.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000481\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002270fa4cbd-9380-4916-9f2a-78da059d220e\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022facb57f8f98742429321b8faf6a65e33\u0022\u003EThe ASSISTANT SPEAKER (H V Ross Robertson)\u003C/span\u003E: I am sorry to interrupt the honourable member but I say to members on my left and on the cross benches, that their interjections on each other in close proximity, as the members are, interfere with the microphone. It is a longstanding convention that that does not happen.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000482\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e3dc3d88-a571-4ed7-a4b4-b66dedd6134b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e099e8f3bf8046729831a4c2adac6799\u0022\u003EPETER BROWN\u003C/span\u003E: These reductions will encourage savings and will encourage investment in this country. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000483\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e3dc3d88-a571-4ed7-a4b4-b66dedd6134b\u0022\u003EI may stand corrected, but I did not hear Bill English say much more than one word on the tax cuts in this bill. The only aspect he talked about was the KiwiSaver regime. Dr the Hon Lockwood Smith used, as the champion of his debate, Laila Harr\u00E9. Laila Harr\u00E9 belongs on this side of the House. It is most unusual for the National Party to drag up her name as their champion. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000484\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e3dc3d88-a571-4ed7-a4b4-b66dedd6134b\u0022\u003EI challenge National members to say whether, if this bill is so wrong, they would scrap it if they became the Government. Will they tell us that now, loud and clear? Would they scrap it? Would they reverse it?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000485\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221772e9f5-5379-4bfe-9d9b-eaffb4c61b02\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022ce0208e0ec8242cdbdebf4ab57a85719\u0022\u003EHon Harry Duynhoven\u003C/span\u003E: You\u2019ll get three different answers, Peter.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000486\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e3dc3d88-a571-4ed7-a4b4-b66dedd6134b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022626fb10f52844033b09f435953f15ac0\u0022\u003EPETER BROWN\u003C/span\u003E: Yes. I draw to the attention of members that Australia has had compulsory superannuation for many a year now. It came in under the Keating Government. We have something like $15 billion under the Cullen fund, or thereabouts. In Australia, if my information is correct, they have in excess of NZ$1 trillion. We can imagine what that can do. National members tell us weekly how many Kiwis go from here to there. Why do they go? One reason is that they get security in retirement. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000487\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e3dc3d88-a571-4ed7-a4b4-b66dedd6134b\u0022\u003EThe second reason is that Kiwis get higher rates of pay in Australia. National gave an increase of $1 in the minimum wage in the 9 years it was in power in the 1990s. From 1990 to 1999 the previous National Government gave a $1 total increase in the minimum wage, yet National members talk about people being poor. I have not looked it up\u2014and I will look it up\u2014but I would not mind betting that that increase occurred when New Zealand First was in coalition with National.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000488\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022b63935ee-d78b-43a8-a3bc-996e7951fb9b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022780f274d62cf4b169fe48ba6aec341da\u0022\u003ER Doug Woolerton\u003C/span\u003E: It did. I remember it.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000489\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e3dc3d88-a571-4ed7-a4b4-b66dedd6134b\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022a1b68c043ee64c69b677b1f0ee3e06d4\u0022\u003EPETER BROWN\u003C/span\u003E: That is when it occurred. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000490\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e3dc3d88-a571-4ed7-a4b4-b66dedd6134b\u0022\u003EThis bill is a good bill for this country. New Zealand First has long been an advocate for savings in this country. We have said for many a year now that we need to save more in this country, not only for our economic well-being now but also for our future economic well-being. We cannot live on debt; we cannot live on borrowed time. New Zealand First is absolutely delighted to put this bill through, and to do so under urgency. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000491\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022e3dc3d88-a571-4ed7-a4b4-b66dedd6134b\u0022\u003EI would urge National members to think again\u2014to think about where they really stand on this issue for New Zealanders and for this country. They are just playing games. Thank you, Mr Assistant Speaker.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022 data-id=\u00228de26388046e4aa78e5f112955feda57\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000492\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00228de26388046e4aa78e5f112955feda57\u0022\u003ETE URUROA FLAVELL (M\u0101ori Party\u2014Waiariki):\u003C/span\u003E T\u0113n\u0101 koe, Mr Assistant Speaker. Kia ora t\u0101tou. The M\u0101ori Party prides itself on following due process. Indeed, our very establishment as a party is based on our respect for M\u0101ori being able to have access to due process before the law. So when we came to such a significant proposal to transform the economy, to increase savings, and to amend the system of taxation we felt duly obliged to undertake at least a limited process of consultation, given that the pressure of urgency had removed the process of select committee consideration from the public. My co-leader Tariana Turia raised the point in the House this morning that if 50 percent of New Zealanders will benefit from KiwiSaver or a complying superannuation fund, then that inevitably means that 50 percent will not. So, I wanted to ponder a bit more about this 50 percent.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000493\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EThe M\u0101ori Party supported the KiwiSaver scheme when that bill had its third reading in Parliament last year. But, as the detail has come to hand in Budget 2007, we have been increasingly alarmed about the downstream effects of a scheme that is clearly not accessible to all, namely beneficiaries and to those on low incomes. We have a $2 billion cash surplus, yet the great numbers of New Zealanders who earn less than $500 a week will not be the lucky Kiwis benefiting from a $20 top-up. Their precious funds will be spent on clothes, on groceries, school uniforms, travel, the power bill, and maybe, if they are lucky, the phone. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000494\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003ESo I travelled far and wide; well in fact I flicked through the local newspapers and media releases, to hear what people thought. The New Zealand Herald consulted Rob, who said: \u201CLow-income earners will certainly be able to afford the four percent contribution. All they need to do is go and get another credit card and max it out at some ridiculous interest rate in order to pay their daily expenses\u201D. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000495\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EMy consultation process was not restricted just to Wellington. Here was an opinion from Auckland: \u201CMost of these one parent families are living on less a week than the amount of financial assistance others get on top of their wages. On a benefit long term with no light at the end of the tunnel. 4 per cent of 200 is 8. $8 a week\u2014not quite the phone bill money. Many cannot even afford the phone to ring an ambulance or other emergency service let alone for social contact. Think on that.\u201D As I thought on that, I did think about the recent economic survey of New Zealand undertaken by the OECD that identified the persistent gap in living standards compared with the rest of the OECD\u2014an issue that another submitter, David, also raised.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000496\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022eaf79431-1033-44f1-a633-22633da52c0d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00224f9c6e1f78d24eeebd363ac9ee5200b4\u0022\u003EDavid Bennett\u003C/span\u003E: Hey!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000497\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022815944b8cc3a4804838a90dde17a9433\u0022\u003ETE URUROA FLAVELL\u003C/span\u003E: No, not David Bennett. It was another David. He said: \u201CThe fact of the matter is our economy is well behind most countries. In fact it\u2019s safe to say we\u0027re not even on the same page. It\u2019s plainly obvious that our economy is going downhill.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000498\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EOf course, it is not just individuals who are hurting from a Budget that continues to support a world in which the gaps are growing, a world in which the poor suffer more. Representative of the views of other community groups were the comments from the Federation of Voluntary Welfare Organisations. Its chief executive, Tina Reid, commented that there are many low-paid and part-time staff who will find it very difficult to contribute to the KiwiSaver scheme. In her words, she said, and I quote: \u201CIf the Government is serious about supporting the sector for the long term, it will have to address issues broader than today\u2019s tax break\u2014such as including rates of pay in a comprehensive way as part of the funding framework for the sector.\u201D\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000499\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003E Earlier this afternoon I listened to Mr Dunne promoting the fact that everyone thinks we should be providing for retirement, and that everyone agrees with superannuation and planning ahead. So it was really interesting to read the comments of Michael Littlewood, the co-director of the retirement policy and research centre of the University of Auckland. If anyone would know about the needs and the nature of retirement, I think it would be him. I ask members to listen to what he said: \u201CWhere is the evidence that we need KiwiSaver? As someone with a long-time interest in this topic, I know the evidence doesn\u2019t exist. The 2007 Budget has just made things stunningly worse with further complex, government-run interventions in the savings behaviour of New Zealanders.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000500\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EWhat interests me even further is that research from the Ministry of Social Development has reported that today\u2019s retirees have the lowest levels of hardship of any major group. Indeed, only 8 percent show any degree of hardship, at all. Yet the same ministry, in other research\u2014the Social Report 2006 and the living standards report\u2014gives another side of the story about where our investment should be best spent. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000501\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EAs we have said again and again, the people who suffer the greatest poverty in New Zealand are children, with 38 percent in hardship categories and an ever-escalating increase in severe hardship. These are the children whom people talked about this morning in a meeting hosted by the Child Poverty Action Group to share their bitter disappointment at the lack of vision in this Budget. These are the children who will not benefit from any investment in their future from this Budget\u2014a Budget that plugs a few holes, and throws a few meagre lollies out, but has little else to go on. People at that breakfast talked about how this Budget could have been an ideal opportunity to produce something in a non-election year that could help the youth\u2014a bold and courageous stand that stood up for the rights of children.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000502\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003E It makes no sense to make the children suffer any further by subsidising savings schemes without first increasing the very level of a living income, a meaningful wage, and a standard of life. Why should there be hunger, neglect, Third World diseases, and poverty, when we have more than ample knowledge and resources to do something about it? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000503\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EOften in this complex we can see Parliament as a microcosm of the very society we live in. In winding up my in-depth, analytical, robust consultation on this bill, I say that this morning I received a letter from a current employee within this complex. I will take a moment to read what she had to say: \u201CI feel very let down by this Budget. I have been unemployed for some years now with an on-call job paying just over $14 an hour. As the unemployment pays $178 a week and we are allowed to earn $80 over and above that we pay seventy cents in every dollar earned from then on. I was looking forward to being able to join up with the Kiwi retirement fund and at least get a few dollars extra to help out when I turned 65. I feel that this Budget has done nothing to offer people like myself that works for some kind of sanctity and pays seventy cents in every dollar after the $80 earned.\u201D \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000504\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022ec266512-9fe8-47da-883e-48f046ee5059\u0022\u003EWe must look around this parliamentary complex, outside the walls of this debating chamber, to the people who clean the floors, the people who open the doors, and the people who keep us safe and secure, warm, well fed, and able to do our jobs as MPs. What is their experience of the promise anticipated in Budget 2007? We talk a lot in this House about an inclusive society. It is indeed time that we faced up to the processes of alienation that we have created and supported through our behaviour with a Budget such as this\u2014a Budget that could have been a little bit more inclusive. This Budget will undoubtedly benefit some people\u2014and we will not stand in their way\u2014but it will continue to alienate others and will fail to help the poor. As one of our own workers in Parliament told us, \u201CI feel very let down by this Budget. \u201D\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022 data-id=\u0022d4c26d8cece34d3e95d7afbfb35be2b1\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000505\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022d4c26d8cece34d3e95d7afbfb35be2b1\u0022\u003EHEATHER ROY (Deputy Leader\u2014ACT):\u003C/span\u003E Contrary to what the New Zealand First member Peter Brown said, the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill is an awful bill and ACT will be opposing it. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000506\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EDr Cullen came down to this House not long ago and berated the National Party\u2014I think he came down to do only that\u2014about misrepresenting the figures. Well, I have news for Dr Cullen. He is the one who cannot do his sums. He has absolutely no idea what he is talking about. John Key was quite right when he said in this House yesterday that employers were receiving a $1 billion tax cut but were not told in advance that they would have $2 billion taken from them. Dr Cullen said that was not correct, but, in fact, it is correct, and if he had bothered to do his figures he would have seen that. John Key also said that workers would receive a hit to their pay packets as employers sought to claw back pay increases to offset the cost of their compulsory KiwiSaver payments. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000507\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EWe are seeing nothing wonderful from this Budget. It is a case of having one little meagre token on the one hand, with the Government taking a whole lot back on the other. That is the reality of this Budget. The legislation that we are debating the third reading of now is designed to put all of this in place. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000508\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EIn fact, if Dr Cullen had taken the time to do his figures, he would have seen that a salary earner on $40,000 a year would cost his or her employer $392 above the money that the employer receives from the Government via the subsidy\u2014the employer will be $392 worse off. For someone earning $60,000 the net cost to the employer will be $952 per year, and for somebody earning $100,000 the net cost to the employer above the subsidy will be $2,072. Quite how that equates to employers being better off at the end of the day escapes me. The threshold seems to be about $27,000. Anybody earning above $27,000 will cost his or her employer money in terms of the KiwiSaver bill. I see that nobody on the other side of the House is able to refute that fact. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000509\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EThe comments made by the M\u0101ori Party speaker who spoke before me, Te Ururoa Flavell, were absolutely right, and I endorse them. Many people around the country are talking about KiwiSaver today because they know they will be worse off and will not be eligible to participate. Anybody earning about $15 an hour or less cannot afford the 4 percent contribution in savings, let alone an 8 percent contribution. So those people who are least able to provide for themselves in their old age will not be able to benefit at all from this legislation. If that is what Labour calls a caring Government, I ask members to please show me an uncaring one, because that is just a travesty. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000510\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EThe previous speaker also quoted from Michael Littlewood in today\u2019s Press. He had some very good and pertinent comments to make, and I would like to tell members a few of the other things he said. He said: \u201CUntil recently, New Zealand had a simple, transparent tax and retirement income structure that has served us well. In fact, it was a world leader in simplicity, transparency and equity\u201D\u2014[Interruption] \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000511\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022fae7af0d-c48d-4dd4-88f3-928ccaa3a984\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u002263fbf295c2684a7ba8c599e663ed787d\u0022\u003EThe ASSISTANT SPEAKER (Ann Hartley)\u003C/span\u003E: Order!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000512\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00222e8dcc7e54c144e89ca0ad68306b4926\u0022\u003EHEATHER ROY\u003C/span\u003E: I will repeat that sentence, because I think the member from Wanganui, who will not be here for much longer, missed it. I say to Mrs Pettis that she should listen to this: \u201CIn fact, it was a world leader in simplicity, transparency and equity \u2026\u201D. But what we will see as a result of both these bills, which we have had to come back and sit through on a Friday when we should be out there talking to our constituents, is complex legislation full of detail that will make our tax system much, much more difficult.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000513\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00221772e9f5-5379-4bfe-9d9b-eaffb4c61b02\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00221383425fa8e8491a8a9fce5d59856c46\u0022\u003EHon Harry Duynhoven\u003C/span\u003E: You haven\u2019t got any constituents. You\u2019re a list MP.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000514\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022e4c22ae793484cb8833161de62a79ef4\u0022\u003EHEATHER ROY\u003C/span\u003E: I thank Mr Duynhoven, but I take my duties seriously, and I too see constituents. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000515\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EThe worst news about KiwiSaver is that tax breaks now mean it might make sense for families who cannot afford 4 percent\u2014and a lot of people cannot\u2014to borrow their required KiwiSaver contributions in order to join and get the tax breaks and subsidies. When we have perverse incentives put forward by this Government, which is supposed to care for the people, what hope is there? \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000516\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EWe seem to be intent on ignoring the incentives that have been put forward by other Governments with regard to saving, but, in fact, more savings seem to be an outcome of economic growth rather than a cause. The richer a country gets, the more its citizens save. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000517\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EI would like to briefly examine some of the statements Dr Cullen made, and some of the things that were announced in yesterday\u2019s Budget. Quite some time ago Dr Cullen promised us that his policies would bring New Zealand 4 percent GDP growth. He went further than that, in fact, and said that he would stake his reputation on it and that it would be his yardstick. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000518\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EWell, let us see what he has achieved. What do we have today? We have 2 percent economic growth. Is that turning us into a wealthy country, when our target was 4 percent or possibly more? Absolutely not. What is Dr Cullen\u2019s target, his forecast, for the next 3 years? It is for worse economic growth than we have today: less than 2 percent. What is Dr Cullen\u2019s forecast for the next 5 years? It is for a mere 2.3 percent economic growth. It may be news to Dr Cullen that this will not get us into the top half of the OECD. Dr Cullen has failed. If we were looking at it in terms of National Certificate of Educational Achievement parlance, we would say that he has earned a mark of Not Achieved. That is hardly satisfactory when he is targeting 4 percent economic growth. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000519\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EACT would have liked to see several significant things in the Budget that would lead to economic growth in this country. ACT would have dropped the income tax rate to 20 percent. There has been a drop in the company tax rate to 30 percent. This, of course, is a move in the right direction, but the top rate of personal tax should have been dropped to match that 30 percent, at the very least. Ideally, we should have had income tax dropped to a rate of 20 percent across the board. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000520\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EGovernment spending should have been held in real terms. It has increased by 32 percent during the time this Government has been in power. What have we seen in return for an increase in Government spending of 32 percent? Well, in the health sector we have seen nothing at all. In fact, we are moving backwards, and most other Government departments cannot put forward a much better prospect.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000521\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022909c825c-6cf3-49bd-9c74-6df837480631\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229e04eafb193241598b90ea0445ae433b\u0022\u003EBob Clarkson\u003C/span\u003E: We\u2019re better than Chad!\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000522\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022122884c0b64548e8b14377b8c2a424d6\u0022\u003EHEATHER ROY\u003C/span\u003E: We are better than Chad. Well, that is a relief, is it not? ACT would have dealt to red tape through a regulatory responsibility bill. Fortunately for this country there is one of those bills on the Order Paper\u2014Rodney Hide\u2019s bill, which I hope the House will look at very carefully, realise the sense of, and vote in favour of. We should have been demanding transparency and accountability for all Government departments through service level agreements that would see heads of departments fired for failure to deliver, and Cabinet Ministers held accountable when they do not keep their promises to the people of this country. We hand over our taxes in good faith in return for services that we should be able to expect, but that are too often not delivered. Cabinet Ministers should be held accountable for that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000523\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EIn this Budget we should have seen shares in State-owned enterprises distributed to everyone so that every New Zealander, every Kiwi, would be a stakeholder in those. The Cullen fund should have been dismantled, with a dividend paid into everyone\u2019s KiwiSaver, or given to an education endowment. That would have been a real Budget\u2014a Budget that New Zealanders could have been proud of. That would have seen economic growth in this country, not the economic growth of less than 2 percent that Dr Cullen is forecasting for the next 3 years, nor the mere 2.3 percent forecasted for the next 5 years. Dr Cullen has failed his own self-imposed yardstick. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000524\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u00226c1d5df8-ac1d-4ce1-a778-202845cfc69f\u0022\u003EThe ACT party will not support this bill or the Budget. It is an awful Budget. It is a Budget where employers have been hoodwinked. They thought they were getting something that would help them compete overseas and help them with productivity. Instead they have been given something with one hand and it has been taken away with the other. That will not do anything for the future of this country. New Zealanders\u2014like the Opposition in this Parliament\u2014should be very, very disappointed indeed with this Budget.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022 data-id=\u0022f541cc8356954bd2ba80225d112b2765\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000525\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u0022f541cc8356954bd2ba80225d112b2765\u0022\u003ESHANE JONES (Labour):\u003C/span\u003E T\u0113n\u0101 koe, Madam Assistant Speaker. The New Zealand Army has a great deal to answer for. It having consigned that member, Heather Roy, to latrine duty, unfortunately we are left with the results\u2014if that speech is any indication as to what she thinks about New Zealanders, and how her powers of analysis are being applied to this Budget. There was not a single charitable thing to be said for our old people\u2014no, nothing whatsoever. Yet she exists by dint of the work that Rodney Hide\u2014unfortunately for the people of Epsom\u2014is endeavouring to do with the old people.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000526\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EFor New Zealanders, this Budget signals that Te Ao M\u0101rama has arrived. Not only do we have ongoing investment in social infrastructure, physical capital, and human capital, but we have taken the time to address those problems that have been overlooked for far too long. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000527\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EI say in response to Heather Roy\u2014with such a dreadful, vacuous, irrelevant, sleep-inducing speech\u2014that it is no wonder that the ACT party is now\u2014[Interruption] Oh, OK. I can hear Mr Bennett, who is described by the people in Hamilton as the Borat of the National Party without the looks or the intellect. The sooner he goes back to the rear end of the Ayrshire cow the better. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000528\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EI will return to Heather Roy. She cannot come to the Chamber and not acknowledge that this Budget not only contributes to those who offer care to our aged population but deals with the upcoming major change in our demography: the ageing nature of our population. Through KiwiSaver, the Budget represents a brilliant opportunity for us as a nation to lay down something that will comprise a legacy. We will look back\u2014as we now look back at Lange\u2019s time, to the very visionary approach that that Government took to seek to redress historical grievances\u2014at this time, and this Budget will rank alongside the stupendously visionary, long-term approach Labour had on antinuclear policy. This will be the pro-savings time. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000529\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003ETo all Kiwis in Aotearoa, Te Ao M\u0101rama has arrived. This is the time when Kiwis do not have to worry about the wh\u0101nau having to pay too much for student loans. The Government has taken care of that one. Neither do Kiwis need to worry about feelings of insecurity about savings. The Government has addressed that. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000530\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EWe have had some unfortunate and predictable misinformation coming from the Leader of the Opposition and the deputy leader of the Opposition, who were getting their mathematics wrong. They do not like the fact that key advisers from PricewaterhouseCoopers came out this morning singing the praises of this Budget. That possibly does not please all members on this side of the House, but they are prepared to advise both parties. Those advisers have identified that the 15 percent option for businesses to claim, in order to drive research and development, probably goes beyond anyone\u2019s expectations in relation to generosity. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000531\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003ESome of the keen observers of politics today are saying that this is a triple A Budget. We have heard from the international entities who appraise the creditworthiness and robustness of nations. They have not been able to catch their breath at the pace with which they have raced into the media to uphold the credentials and the principles underlying this Budget. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000532\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EWe return to our core supporters: families. There is a ridiculous level of prattle coming from the other side of the House that those who are on lowish incomes have been forgotten about. Obviously, those members are either afraid or unwilling to acknowledge the contribution of Working for Families, which has delivered cash flow back into those families. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000533\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EIn addition, the Opposition does not like that all the heavy hitters in the business sector and enterprise sector are wiping their brows, almost with disbelief, that this Government has been able to achieve social infrastructure development and brilliant fiscal stewardship, and with that the ability to invest in our economic estate. The Government has all the bases covered. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000534\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EThe only base, however, that has been led astray continuously is that led astray by our colleagues from the M\u0101ori Party in our M\u0101ori world. It is not good. They come here demonstrating why literacy and numeracy are certainly needed. It beggars belief that my friend from our old school, St Stephen\u2019s, should stand and speak against this Budget, because, privately, he thoroughly agrees with everything.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000535\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022f44431ef-b505-4e94-9f57-a60b0a569bf7\u0022\u003EThis is a great day. This is a great day for this Government, which has the power, the authority, and the credibility to lead us into the rising sun. Kia ora t\u0101tou.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022 data-id=\u00229fcf37374c1545318d6a26ab04ed33f5\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000536\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00229fcf37374c1545318d6a26ab04ed33f5\u0022\u003ECRAIG FOSS (National\u2014Tukituki):\u003C/span\u003E I will take just a quick call to reply to the previous speaker, the chairman of the Finance and Expenditure Committee. I would like to point out the audacity and the arrogance of this Government at the moment. This bill makes fundamental multibillion-dollar decisions that set parameters for New Zealanders\u2019 savings for the future\u2014so Government members allege\u2014and the bill is not even going to a select committee. That member alleged yesterday that the bill was going to a select committee. It is not. That shows arrogance on top of his audacity, or perhaps he is just too afraid to face up to submissions from his own supporters who do not want this type of policy. \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000537\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022659f6556-09a1-4ead-bc52-05cbdb4eaab8\u0022\u003EFinally, I make one quick point. This bill, from this Budget, will leave interest rates higher for longer and our currency higher for longer, in what is Export Year, apparently. We are voting against this bill, because this bill and this Budget are a confidence issue. We have no confidence in the series of Budgets from Dr Cullen. This is the eighth failure from eight Budgets that have resulted in the highest interest rates in the Western World, and the highest exchange rates, which are absolutely killing our economy.\u003C/span\u003E\u003C/p\u003E\u003Ca name=\u0022member\u0022 data-type=\u0022article\u0022 data-memberid=\u002259e9efe2-6dea-4eeb-869a-ef5b3e48a5b5\u0022 data-id=\u00229328372e1ba84e0ca5d1f1f451af7c30\u0022\u003E\u003C/a\u003E\u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000538\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002259e9efe2-6dea-4eeb-869a-ef5b3e48a5b5\u0022\u003E\u003Cspan class=\u0022HpsByToc\u0022 id=\u00229328372e1ba84e0ca5d1f1f451af7c30\u0022\u003ECHARLES CHAUVEL (Labour):\u003C/span\u003E I would like to deal with a few of the points that have been made by previous speakers in addressing the third reading of the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill. I would like to start with what \u201CSimon English\u201D had to say about ordinary workers in the smoko room. \u201CSimon English\u201D said that ordinary workers in the smoko room would reject this Budget. [Interruption] No, unlike Mr English, I believe in referring to members by their proper names. How would he know what ordinary workers in the smoko room want? When was the last time he spoke to an ordinary worker? [Interruption] \u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000539\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002259e9efe2-6dea-4eeb-869a-ef5b3e48a5b5\u0022\u003EI am really proud that my last job was as a partner in, and owner and board member of, a $60 million law firm. I am very proud of that, and I will tell members why. I have had calls from former clients today telling me\u2014\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000540\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u0022977cccaf-581d-4f48-924e-32bf6c54a93d\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u00229dc27c1b009c42d3b8058e42f900dd45\u0022\u003EAnne Tolley\u003C/span\u003E: What does this have to do with ordinary workers?\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000541\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002259e9efe2-6dea-4eeb-869a-ef5b3e48a5b5\u0022\u003E\u003Cspan class=\u0022HpsBy\u0022 id=\u0022f4fa35a11dff4ceeba85362cde2e3594\u0022\u003ECHARLES CHAUVEL\u003C/span\u003E: \u2014I will come to that\u2014what a great thing the targeted research and development tax exemptions will be and how fantastic they will be for keeping research and development onshore. They are saying what a great thing they will be for keeping head offices in New Zealand rather than our losing them overseas. That is what the people from the corporate sector are saying today. That is what they have been on the phone to say to me today. They think it is great they will get a reduction in corporate tax levels of 3c in the dollar, because that proves that this is a Government that is listening to business and wants to see the best thing for investment in New Zealanders. That is what the business community is saying about this Budget.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000542\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002259e9efe2-6dea-4eeb-869a-ef5b3e48a5b5\u0022\u003EBut let me turn to the ordinary workers and tell members about two recent situations I was in. I was talking to real live ones, I say to Mr English, not the pretend ones the National Party members tell us they talk to. I was at two recent events: an engineers union delegates forum in Petone, and the launch of the industrial branch of the Labour Party in Gisborne. Mrs Tolley might like to listen to this. They are not the wealthy workers we heard about, who Mr English thinks will worship in some sort of cargo cult that he accuses this Government of creating. They are ordinary, working people who know that the Working for Families package has made a big difference to their lives, and for whom the extension to the programme in April made an even bigger difference.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000543\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002259e9efe2-6dea-4eeb-869a-ef5b3e48a5b5\u0022\u003EOne of them told me a story about how his wife used to have to work before the Working for Families package came in. They had to arrange for the wife\u2019s mother to pick up the kids after school and look after them. The wife would then pick them up when she had finished work, go home, and look after them. Do members know what happens now? That does not have to happen. She can stay at home and look after the kids, which is what she wants to do. It is a great thing. People really like having that choice, which we have allowed them to exercise by the roll-out of the Working for Families package.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000544\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002259e9efe2-6dea-4eeb-869a-ef5b3e48a5b5\u0022\u003EWhat we are seeing with KiwiSaver is just the latest example of a roll-out of that sort of programme that allows people to realise their dreams\u2014in this case, building up a nest egg for a deposit on a house. What could be better than that? What could be better for ordinary New Zealanders than fulfilling that sort of dream? That is what they want, and that is what this Government is delivering. Members opposite will see the results of that at the next election.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000545\u0022\u003E\u003Cspan class=\u0022HpsNormal\u0022 id=\u002259e9efe2-6dea-4eeb-869a-ef5b3e48a5b5\u0022\u003EI want to record for the House some interesting comments made today on the Budget. I would just like to read them. The ANZ said today: \u201Conce again, Dr Cullen has struck a good balance between running prudent fiscal policy and not fanning an excessive domestic economy.\u201D That was the comment from the ANZ. First NZ Capital said the Reserve Bank is now \u201Cunlikely to be driven towards changing its policy stance as a result of the fiscal update.\u201D Standard and Poor\u2019s has said the Budget places \u201CNew Zealand\u2019s fiscal position amongst the ranks of AAA rated sovereigns such as Sweden, Norway and Australia.\u201D Those comments demonstrate that this Budget has been good for ordinary Kiwis, because it continues Labour\u2019s long tradition of targeting assistance to those who need it the most. It is good for business, because it will help keep head offices and research and development onshore, and help build up a strategic reserve of capital for use in New Zealand, rather than our having to rely on overseas funds. It is a good Budget for New Zealand, because it will continue to balance our programme of savings and investment in our future.\u003C/span\u003E\u003C/p\u003E\u003Ca id=\u00223f0e15a437f94c72a7512a3abdcc9ca7\u0022 name=\u0022division\u0022\u003E\u003C/a\u003E\u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EA party vote was called for on the question, That the Taxation (KiwiSaver and Company Tax Rate Amendments) Bill be now read a third time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAyes 61\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand Labour 49; New Zealand First 7; United Future 2; Progressive 1; Independent: Copeland; Independent: Field\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENoes 50\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003ENew Zealand National 48; ACT New Zealand 2.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EAbstentions 3\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EM\u0101ori Party 3.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp class=\u0022HpsDivision\u0022\u003E\u003Cspan class=\u0022HpsItem\u0022\u003EBill read a third time.\u003C/span\u003E\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000546\u0022\u003EThe House adjourned at 3.28 p.m. (Friday)\u003C/p\u003E\n      \u003Cp id=\u0022id200705177d837585a2c44140a846aa6fcdbc4b41000547\u0022\u003E\u003Cbr\u003E\u003C/p\u003E\n    \u003C/div\u003E\n  \u003C/body\u003E\n\u003C/html\u003E"