KiwiSaver Bill

Part 2 contains three subparts, which are very important to the implementation of the scheme. Subpart 1 talks about becoming members of KiwiSaver, Subpart 2 deals with the allocation of people to KiwiSaver schemes, and Subpart 3 transfers between KiwiSaver schemes. So those really are the operational aspects of the KiwiSaver legislation.

It was interesting to listen to other members’ contributions to the debate on Part 1, because they are relevant to this part, as well. This part gives effect to the objective of the legislation, which is to encourage people to take up savings. As the Minister of Finance said in the second reading debate, this is not designed to make savings compulsory; he said that it was designed to make savings compelling rather than compulsory. Of course, I too recall the Post Office Savings Bank books that we had, with the little squirrel on the front. I think “saving for a rainy day” was the message we were given in those days. I certainly did not have parents to bail me out for anything I wanted to buy in my time growing up. I worked from the time I was old enough to go in with my dad and earn a few dollars at the office by putting things in numerical order. Then I worked in a dairy after school, and then I worked in a hospital. I spent my time working to support myself, for quite some time.

💬 Brian Connell: Did you save anything?

No. Saving money was not very easy to do when I was being paid 40c an hour—that was how much I was being paid when I was 14 years old. But I did manage to save up for the things I really wanted the most. I think that is something in our culture that we have lost. I wanted a pair of ice skating boots; my parents could not afford to buy them for me, because they had seven children, and if one person got one thing, then everyone else would be lining up for it, as well. So my parents said to me: “If you want ice skating boots, you save up for them yourself.” At 40c an hour I saved up, week after week after week, and those boots cost me $45. I still was not a very good ice-skater, but what a fantastic lesson I learnt: if people want something, they have to work for it and save for it themselves, because no one else will do it for them.

It was interesting that comments were made about training, opportunity, and needs. Yes, training, opportunity, and needs are very fine, but when those opportunities are often ones that people have to learn for themselves, it is those people’s parents who give them the lessons in life that stand them in good stead for the future.

What we are doing here is about accessing those who can save. People who earn an income can save. Not all of them will be in a position to save, which is why this is an opt-out scheme. It is not an opt-in scheme, because we know that people may not take that step to give up some of their salary in order to save for their future. We are offering an opt-out scheme so people are automatically enrolled. That is what this part does: it provides automatic enrolment so there are automatic deductions of contributions made from people’s salary—the next pay calculated after the new employment begins.

I thought a really important part of the scheme was for that deduction to happen straight away, so people could look at the pay packet and see what it looked like without the money there. There is the ability to opt out, but we are hoping that with a common trait known as inertia—which I certainly experience on occasions—a lot more people will remain in the scheme, because it will take some effort to come out of it. But for those who cannot afford it, the opt-out provisions are there. This is not a compulsory scheme. Yes, we are setting it up to make it easy for those who can save to do so, but we are not forcing people to save, even though we might think that to do so would be good not only for them but for our country, as well.

I do not believe I have heard any good alternative arguments, especially the one about pool boys. The idea of somebody having to spend his or her finances on pool boys to clean his or her swimming pool—it is not even gender neutral; it was always men rather than woman who were talked about as being employed to do those particular jobs—is ridiculous.

That speech made by the Minister of Commerce was touching in this regard: she spent quite a bit of time down memory lane talking about how she had saved up for the white boots she got when she was 16—

💬 Hon Lianne Dalziel: They were so cool!

I am sure they were really cool. She talked about why savings are really important—I assume this is a Government that believes in savings—why the Government wants to develop a culture of savings, and why that is really important. Why do I think that is touching? In 1999 the Labour Government was elected into office. An interesting fact about 1999 is that New Zealanders looked at each other after polling day and worked out that they owed $80 billion. That is what New Zealanders owed when the Labour Government came into office—the Labour Government that Lianne Dalziel has been an important member of. That same woman just told us that she saved up for things, and that that was really important. I wonder whether she could answer this question for me, because it is quite an interesting little question.

💬 Hon Lianne Dalziel: I bet it’s not relevant.

No, it is a very relevant question. If savings run to the heart of this Government, and if savings are really important, can she answer this question—

💬 Hon Lianne Dalziel: I still don’t have a pool boy!

I do not have one, either, interestingly enough. Why have New Zealanders racked up $60 billion worth of debt in 6 years under a Labour Government? That is what they have done. New Zealanders owed $80 billion 6 years ago; they now owe $140 billion, under a Labour Government.

There are a couple of interesting things here. Firstly, Mr Woolerton made an interesting point about poor people not being able to afford to save, and about my obviously not being able to recognise those issues—which is not correct. I thought I would make this point to him. I wonder whether Mr Woolerton can explain to me the following. If someone earning $40,000 a year puts the 4 percent contribution into KiwiSaver, that person would, pre-tax, put in $1,600, but because they pay tax they would put in $1,200, let us argue. If that person is getting no employer contribution, and is earning $40,000, bringing up two children, paying off the mortgage, and everything else, how can that person afford to pay that $1,200? What has changed?

💬 Hon Lianne Dalziel: Working for Families.

No. What has changed in the position of that person from the day before yesterday? Nothing. That person could not afford to save then; he or she cannot afford to save now. That is the whole point.

I ask members to have a look at the $1,200 that that person could put in. If he or she received an employer contribution, I accept that that would make things a little easier. He or she could divert only half of his or her own contribution—Mr Copeland wrote his own essay piece about that, and he is right. Under that scenario, the employer would put in $800, and the employee would effectively put in $600, of which $300 could be taken out. The Government is now telling us that people who earn relatively limited incomes, maybe less than $40,000—less than the average wage—will somehow, miraculously, be able to afford to go without that money. That is the very reason why this scheme will not work. Nothing changes in the position of the people whom the Government wants to go into the scheme—those on low to middle incomes. They cannot afford to save. Nothing has changed. If the Government had said to those people that if they earned under a certain amount—if they earned 40 grand or less—a certain amount would be put in by the Government, that would have been interesting. But, no, that is not the position. The Government is telling us that those people will miraculously be able to save.

That is the very reason that, when the Government collects $550 million from the specified superannuation contribution withholding tax—[Interruption] Mr Hodgson knows this, because he spends a lot of it on the health system and gets nothing for it. The sum of $550 million is sucked out through the specified superannuation contribution withholding tax. Now he is telling us that KiwiSaver will be a roaring success but it will cost $35 million. Well, I do not think so.

When Mr Woolerton takes his next call, I suggest that he formally apologises, because he now knows that I am right and he is wrong. I understand absolutely how people who do not earn very much money go along, and they will not be able to contribute to the scheme, because very, very little in their position has changed. That is the problem.

There are lots of different scenarios that would have made the scheme better. Interestingly enough, if the Government had not been rushing this measure through because it had stolen $882,000 of taxpayers’ money, or because it had a problem with Taito Phillip Field, if it had been actually doing its work, it would have read about what President Bush did in relation to tax cuts. He asked the US Treasury to do some work for him around tax cuts.

I will take up John Key’s challenge, because as every financial adviser knows, one can always put aside a dollar for savings. I am not talking about the financial advisers in the money markets that John Key deals with; I am talking about the budgeters, the people who talk to other people about how to extend their dollars in order to make the home budget work, as his mother did. His mother would have understood that, just as my mother would have. It is a matter of making savings a priority and it is a matter of getting the habit of saving into one’s psyche. People know—and Mr Key knows this, but he has forgotten it because it is a very long time ago for him—that the important thing is to make the effort to save and to make saving a habit. Anybody who does budgeting, or who does household budgeting, knows that.

I suggest that in many, many homes across the country, when the man of the household is not doing as he should, it is the mother, the lady of the household, who will quietly put aside a couple of bucks each week for what she knows will be a rainy day—or for the skates that the Minister in the chair, Lianne Dalziel, was talking about—

💬 John Key: Boots, I think she was talking about.

R DOUG WOOLERTON: The boots or the skates. That conjures up thoughts that actually put me off my speech, so I will not go there.

💬 Chris Auchinvole: Have a visual!

R DOUG WOOLERTON: No, we will not go there. It is the mothers who understand these things. It is the mothers who will take money out of the household budget and put it aside for a rainy day. This Government, because it has mothers within it, understands that, and that that is the answer.

It is not a monetary answer. It is not an answer one will find in the money markets; nor is it one that people who deal in big amounts of money will understand. It is an answer that households across this country will understand, because they are living with it each day. They will put the money they take from their household budgets into KiwiSaver. From time to time they may take a holiday from putting money into the scheme. They may actually have a diversion to the mortgage, or for whatever else, but slowly and surely over many, many years—and hopefully over a generation or two, if somebody does not come into power and wreck this scheme—we will build again a savings culture in this country. More than anything else, that is what this scheme is about.

Mr Key is an intelligent man—people tell me he is, and he seems to be. He knows that this scheme is about building a savings culture. He knows it is to be intergenerational. He knows saving is made for the long term, but he is required to speak against this bill. Mr Key favours it himself, but, because he is required to speak against it by other members of his caucus team, he goes out and stonewalls on it.

As the Minister was saying, this is not an opt-in scheme; it is an opt-out scheme. So people who join the workforce or start a job have the option, 2 weeks later, of opting out. I think that is a good thing, too, because it is true that often we do not get around to these things. It is like putting the money in the cookie jar: we do not get around to it, and largely it is the mothers who do so. I can just see mothers right across the country asking their children whether they have joined the KiwiSaver scheme yet. For years mothers have been asking their children whether they have joined a savings scheme and are putting a little aside, and whether they have done something about superannuation. And the answer is no, no, no all over the place. The mothers I am speaking about will be happy to see this KiwiSaver scheme, because they know they have a better chance of holding their children in the scheme than of getting them to join it.

I thank you, Madam Chair, as I rise to speak to Part 2. We have heard a lot of members talk about the savings culture and how things have changed over many generations. I have to agree with that, because I recall speaking with my own grandparents about their attitudes towards money and saving. Many of the generations before my own generation would never take out loans. And if people did, they would do it for something important—certainly not for something flippant like going on a holiday.

Things have changed, and to a certain extent I think there are a number of reasons for that. Banks are always telling us to take out more loans. Credit card companies are always marketing themselves, and encouraging people to take out additional credit. Things have changed over a period of time. Even in the schools there has been a small change. Years ago schools used to encourage banking. Kids used to bring along their 20c or 50c a week to put it into their savings account, but many schools do not do that any more. I think the changes have chipped away at a culture of saving. I listened to my colleague John Key’s comments about the rise in debt even in the last 6 years. When we hear the figure of $60 billion that is being talked about, we feel it is a figure so large that it is hard to imagine that amount in physical bills. So something has been occurring.

I proffer the view that the Government has played a role in that, by giving people the impression they do not need to save because the Government will always be there to let them off the hook if they rack up some debts. Later on today we will be debating the Child Support Amendment Bill (No 4)—legislation that will let liable parents who have child support debts off a pretty hefty amount of child support. Since when has the answer to having a debt been to write it off completely? I do not know. But I think all those decisions made by the Government contribute to the idea that if times are tough, the Government will write off people’s debt. There is not the same attitude towards personal responsibility as there was previously. Some younger people think it is OK to rack up a huge debt just so they can travel overseas, thinking they will pay it off at a later time.

I wonder what role this bill will play in terms of changing the culture of New Zealanders. That is my concern. When we look at the bill, we see that the scheme is not a compulsory one but an opt-out one, so it will be very easy for a young person to decide that he or she wants to have his or her income now. I remember that when I was first a public servant, many moons ago now, the department I worked for had quite a good superannuation scheme. The Government chipped in $2 for every $1. Well, a lot of young people—admittedly we were all in our early 20s—thought they wanted their cash then. They did not want to put it into superannuation savings, thinking that retirement was decades away.

Even if a scheme with certain advantages is provided, it is another thing to try to encourage people to take part in that scheme. That is what I am interested in, and I would like the Minister in the chair, the Hon Lianne Dalziel, to take a call and explain how, in an opt-out scheme, those people can be encouraged to put in their funding, and how it will be explained that even in their early years—in their first employment—it is to their advantage to do so. Unless we do that, we will not change the culture in this country and we will continue to have Kiwis who think it is OK to outspend their income on their lifestyle, and to take out loans and use credit for luxuries as opposed to important assets like homes, etc.

The other point is that in this bill, the Government is promoting homeownership again, at a time when the Governor of the Reserve Bank is trying to get Kiwis away from their infatuation with property. I am still concerned about those mixed messages. If this bill is about saving for retirement, then that is something quite different from homeownership. I think this scheme runs the risk of muddying the water and not doing a good job of encouraging people to save for their retirement, so they can have a better lifestyle in their later life.

I thank Madam Chair for the call on Part 2 of the KiwiSaver Bill. I start by saying that the speech by Lianne Dalziel was one of the finest Tory speeches I think I have heard in this House for a long time. Right at the heart of her speech was capitalism; people who work hard are rewarded. Mind you, the mind boggles at the thought of Lianne Dalziel in a pair of knee-high boots.

I want, now, to tell my own story in relation to this bill, one that sums up the Labour Party’s attitude to saving. When I was about the same age as Lianne Dalziel in her story, I was saving hard. When Mum and Dad gave me threepence or sixpence for an ice cream—this story does go back a long time—I would take the money and I would save it. Then when all the kids in my family—and there were six of them—ran out of money for ice creams, Mum or Dad would say to me: “Don’t be mean, Brian, share your money.” All that time I had gone without ice creams. And now the Labour Government comes along and says I have to share that money, and Mr Employer has to share the money, because it is not fair.

It is typical, is it not? Here we are, debating Part 2 of a bill where we are spending more time dealing with the process of the bill than actually getting it structured right in the first place. My colleagues have quoted chapter and verse as to what is wrong with the bill, but the slow-witted members of the Government are still struggling to understand why someone earning $40,000 a year will simply not be able to afford to take up the opportunities that this scheme offers; it simply will not work.

I have some questions for the Minister in the chair. Clause 9 is headed: “Meaning of new employment”. I ask the Minister whether, if an employee who is in the scheme changes employment, the scheme is portable, and is fully vested, and the employee can go. I ask the Minister to take a call and answer whether employees can take their contributions from one scheme, and go to another employer, if that employer is not an exempt employer under the definition of this scheme. I should be grateful if the Minister in the chair would take a call and answer that question. The fundamental flaw in this bill is that it will not bring about the behavioural change that is necessary if we are going to have a savings culture in this country.

💬 Darren Hughes: Will the member answer a question?

The member is calling out and asking me whether I will answer a question. When he is speaking, certainly I will. When I am speaking, he will listen, because he might learn something. The fundamental question is that this bill will not bring about any behavioural change. How can a behavioural change be brought about when people simply have an opt-out clause in a scheme like this? People will opt out. They will take their $1,000 and they will act according to what we have told them from time immemorial, and that it is that it is better to pay off a mortgage than to save. The biggest asset that people create in their lives is in their houses, and that is the crux of the matter—the distinction between good debt and bad debt. Whether we like it or not, we have created a consumer society. We have created a society where people say they want, they want, they want, and they are going to have. What these people do—and it is no fault of theirs, because we have made money so easily available—is buy, or get into bad debt. They will buy a TV, or a depreciating asset called a car that a few finance companies are finding out about now, rather than putting money into investments that will create asset wealth.

I rise to speak on Part 2 of the KiwiSaver Bill. I want to take this opportunity to get to the heart of some key issues of this part of the bill. I will canvass clause 7A, “Outline of how people become members of overall KiwiSaver scheme”; clause 8, “Who automatic enrolment rules apply to”; and clause 9, “Meaning of new employment”. I will particularly focus on the compliance costs around this bill, and temporary employees for a period of up to 28 days, and—if time permits—round it out by having a look at the time limit for opting out.

Clause 7A outlines how people become members of the overall KiwiSaver scheme. This is an issue which vexed the Finance and Expenditure Committee when we first considered the opt-out versus the opt-in provisions. Initially, when the bill first came to us it was an opt-in situation. It was not until the select committee changed that particular rule that it moved to the opt-out position. The bill now essentially provides for opting-out, and gives employees the opportunity to do so after 2 weeks.

Clause 8 deals with who automatic enrolment applies to. There is an interesting point here that the Minister of Commerce may like to take a call on to give me an answer. Clause 8(b) states that it applies to people of the ages of 18 through to 65, so, unfortunately, when the Minister Lianne Dalziel, at the tender age of 15, first conducted her working life and first started saving towards her new pair of boots, she would have been unable to make contributions to KiwiSaver at that point. The vexing question—and I would be interested in her taking a call here—is what happens to an employee at the age of 64. Do these employees opt in for a year, and will they receive the $1,000 remuneration at the end of that year? Will the Government be forking out a significant amount of money to an employee aged 64 who is on $30,000 and may have contributed only $400? Will the Government be forking out $1,000 to those employees?

I move to clause 9, “Meaning of new employment”. Again, this was another vexing issue for members of the select committee, purely because of the compliance costs that surround temporary employment, which is specifically covered in clause 9A. This was something that the select committee focused on, because the definition of “temporary employment” and who can be involved in the scheme is very important. Members will see that there is a new, unanimous clause dealing with casual agricultural employees that moves them outside the scheme until they become permanent employees. More specifically, it deals with employment that is “under a contract of service that is for a period of 28 continuous days or less.” This is another question I would like the Minister to consider. Is this period long enough, given that a significant number of employees in our workforce move from job to job? I suggest to the Minister that the compliance costs around these temporary employees will be significant.

I turn to the officials report, to delve through what would happen if an employee enrols in the scheme after the 28-day period, decides to opt out after a 2-week period, then leaves that employment for another job. Let us go through the process. The employee starts the job and a deduction is made from the first pay. The employee then sends an opt-out form to the Inland Revenue Department. A deduction is made from the employee’s second pay. The opt-out form is received by the department, it is processed, and the employer is advised to cease deductions. The employer then has to send the deductions, dating from the first pay, to the Inland Revenue Department. The department provides a refund to the employee via the employer. Do not tell me that is not a significant process for an employer to go through! I suggest that the compliance costs surrounding temporary employees will be significant.

I think it is worthwhile responding, just briefly, to the questions that have been asked. Persons aged 18 or under may opt in only by contracting directly with a provider, and that is catered for in clause 26(1). The employee’s contribution belongs to that person and is portable to a new employer. I think the question was asked by Mr Connell, and I refer him to clause 14(1). The employer contribution, if it makes up 4 percent, has to vest immediately and is portable. I refer the member to paragraph (ii) of new clause 56A(b).

I would like to pick up on one of the earlier speeches in which Dr Cullen mentioned that he wanted savings to be compelling and not compulsory—that this was not a scheme of compulsion. I tend to argue that that is not absolutely clear, because there are compulsion traps all over this bill. It may be an opt-out bill but if, say, under this bill someone starts a job tomorrow, and has 2 weeks to opt out, that is OK, the person is out. In a year’s time the person starts a new job and is asked again whether he or she wants to opt out. The choice is made to opt out, and that is fine.

However, if someone starts a new job tomorrow and chooses to opt in, that is fine. The person is in the scheme. If the person starts another job in a year’s time, he or she is still in. The person could take a holiday or do the mortgage diversion scheme, but he or she is still in. So talk of it being voluntary, nice and gentle, and just helping everyone on is not the total truth. This is almost compulsion by stealth.

During the consideration in the Finance and Expenditure Committee the officials pointed out the number of new job events a year and I was staggered. I think they said there are 1.1 million new job events every year.

💬 Hon Lianne Dalziel: That’s right.

Every year, 1.1 million job events. We tried to get to the bottom of that, and maybe someone could explain it further. That represents 1.1 million KiwiSaver events every year, so who will be doing the compliance and work on that? It will be good old small business, of course. They have to make their affairs correct in the eyes of the Inland Revenue Department, and supply different pamphlets, information, etc. to their employees—1.1 million times. Fair enough, there may be some casual labour in that number, but even at half of the 1.1 million, I just find that absolutely staggering.

We must compliment the Minister on the 110 weeks to save for her ice-skates at 40c a week, I think it was.

💬 Hon Lianne Dalziel: No, an hour!

An hour? Oh, I am sorry. I totally misheard the Minister. Excuse me! There is a very important issue in Part 2, and that is around default KiwiSaver providers. The select committee had a lot of discussion about this part of the bill, particularly around the process of how those providers would be chosen. There seems to be confusion and I have different press releases and comments from Ministers made at different times and in different speeches. It is clear there will be about four to six default providers. The finance Minister, Mr Cullen, is on the record as saying something along the lines that it will be very hard for any of those default providers to not make money out of the KiwiSaver scheme. Goodness gracious me! With the announcements made last Thursday, particularly the mortgage diversion scheme, it should be quite impossible for anyone not to make money as a default provider.

I would like to read from the commentary on the bill, because what happened was that the tenders, the contracts, and the request for proposals for default providers actually went out in advance of consideration of the bill, in advance of finalisation of the bill, and, of course, therefore in advance of the bill being reported back and passing through the House. That was the form of the bill referred to the committee. Those businesses out there that have spent hundreds of thousands of dollars preparing a tender and their systems to the tight time frames that this bill demands—even with the 3 to 6- month extension—did so before they even knew they had to factor in mortgage diversion.

National speakers used the words “abuse of process” earlier on, and this is yet another example of the ends trying to drive the means, whereby the select committee process has been totally overruled by a roughshod administration. It just wanted to get this thing out so it could grab some good headlines in a week where the Government’s polling is absolutely plummeting. Further to the default provision, I would like to read from the commentary: “Some members”—and that includes members in addition to National Party members on the committee—“were concerned that the Government progressed the default provider provisions of the bill, matters on which submissions were received, prior to the select committee reporting back to the House.”

I want to go back, if I may, to the issue of mortgage diversion and talk about that for a minute. Some New Zealanders may be considering going into KiwiSaver, and it is important they understand a few things. The first is that if they want to have mortgage diversion, so they put their money into KiwiSaver and decide to elect to have mortgage diversion, they cannot do that for 12 months. That is the first thing.

The second thing is rather interesting, and the Minister might want to check this with her officials or take a call on this herself. She may know the answer. In Michael Cullen’s Supplementary Order Paper 52, from memory, clause 194A states: “The Minister of Finance may make a recommendation under subsection (1) only if the Minister is satisfied that a mortgage diversion facility that is provided … (a) there is no compulsion on providers to provide a mortgage diversion facility:”. There is no compulsion. That is interesting.

So people may sign up for KiwiSaver, and be one of the low-income New Zealanders whom Mr Woolerton thinks the National Party does not understand. But he is wrong, because many of our supporters are aspirational New Zealanders who want to do better, and want to pay less taxes. They are New Zealanders who do not want to be booted off Pete Hodgson’s waiting list. They are New Zealanders who do not want to have $882,000 stolen from them to buy an election. They are New Zealanders who do not support Taito Phillip Field rorting his electors and running a cash business in his office. They are New Zealanders who are sick of seeing Helen Clark breaking the rules whenever she wants. They are New Zealanders who thought that an election spending cap meant that a party stuck to it. They are New Zealanders who thought that when they signed up to a Prime Minister who said that she was going to set new standards, that did not mean she would take $882,000 because her party was down 3 percent in the polls and spend whatever it took. Those people are decent, hard-working New Zealanders, and they support National because they understand what we are all about. But now they are thinking that under mortgage diversion they will be able to divert something into their mortgage, but lo and behold, here we have a little clause in the bill that says there is no compulsion on providers to provide a mortgage diversion.

No wonder the 71 submissions we heard on the bill did not talk about mortgage diversion. That is right, it was not on the agenda last week when we had a Government that was not in a complete freefall in the polls. Was it not interesting, I might add, when I spoke in the general debate? I pointed out to Trevor Mallard that the polls were going south for Labour. Trevor Mallard looked at me, as Pete Hodgson is now, and said: “No, no, they are going up.” Well, that is not what we found out on Agenda on Saturday morning. The UMR Insight poll—Labour’s pollsters—only 4 weeks ago had Labour three points out in front, because I saw it, which was very interesting. Two weeks ago, when mortgage diversion was not even on the agenda Labour was four and a half points behind. Now it is more than four and a half points behind. [Interruption]

So no wonder Mark Gosche is giving a longer speech than I am, and I am on my feet. Mark Gosche knows that $882,000 of taxpayers’ money was paid to prop up not only his re-election but, for goodness’ sake, Taito Phillip Field’s re-election. Labour used taxpayers’ money to do that. Labour members are very quiet over there; they know that mortgage diversion may not apply to these issues. I find that very interesting, and I think New Zealanders will find it very interesting when they have a look at this legislation.

The real truth is that KiwiSaver is the same as any savings scheme, and that means that people will engage in savings schemes if they are matched by an employer. We know that. The take-up rate in schemes such as the State Sector Retirement Savings Scheme is about 47 percent, I think, from last memory, and that is matched dollar for dollar up to 3 percent. So the real issue here is: will employers embrace KiwiSaver? That is the only question one has to ask. Because if they will embrace KiwiSaver then I agree that more New Zealanders will actually take up the savings pledge. I agree with that.

My question for the Government is, in its rush to get Taito Phillip Field and its $882,000 of theft off the front page, why did it not do something to make the scheme more attractive to employers? Because the Government has made it slightly more attractive to employees—it has got rid of the specified superannuation contribution withholding taxes so employees get the full benefit going in—but there is no change for an employer. If last week an employer was putting $1,000 into an account over the course of a year and $300 was going to the Government for withholding tax, and $700 was going into the account, now $1,000 will go into the account. So that is good for employees, they are happy, but the employers have no benefit.

Part 2 has 40 pages, and it is really interesting that the Labour members seem, for the first time, to understand what is in this bill. That is why they are getting very nervous and excited. They now realise that this legislation will not save them in the polling, even though the Minister of Finance pushed it out as if it would be the saviour for Labour. Part 2 has 40 pages dedicated to procedure and definitions. In fact, there is a distinction between new employment and new jobs, which apparently are quite different. I wonder whether the Minister in the chair, the Hon Lianne Dalziel, would like to take a call and say whether the Government will propose a subsidy to employers for administering this scheme or learning how to comply with all these 40 pages of requirements. Last time the Labour Government introduced payroll legislation that affected employers, instead of making an employer’s job easier, it actually provided a subsidy to employers who furnished PAYE returns. Instead of reducing compliance and making life easy for employers, it is continuing with the Labour hallmark of putting people on welfare—introducing welfare and putting taxpayers’ money into that.

It is interesting that in my hand I have one of the little red books—no doubt it is part of the $882,000 stolen by the Labour Party for election expenses last year. The Labour Party spin machine states that some people talk about a Budget surplus as if there was a pile of money building up in the Government’s bank account, when, in fact, all the money was spent on current and future New Zealanders. What it is really trying to say is that all the money was spent on stealing last year’s election for the Labour Government—$882,000! Now it is fine for the Government to preach to New Zealanders on spending. Why would New Zealanders need incentives to spend, when they have a Government that steals over $800,000 of their money to use on spin?

Then the Government turns around and says it is for the good of New Zealanders that they should learn to save. It is interesting that the Minister, just now, said this bill is not for people who cannot afford to save. So, firstly, we want to know what measures the Government has for those people in order to get them into a position where they can afford to save. The other interesting thing is that the Minister said that this bill is for people who can save but will not save. Well, that is the Labour Government making a huge judgment call and accusing New Zealanders who, it says, can save but will not save. I say that the Labour Government provides a very poor example to people, by failing to ensure there is less wastage of taxpayers’ money. It should not have given local government all those additional responsibilities without funding. Local government is taking so much off individuals through tax for council rates that that ensures they are in the position of being unable to save.

I hope the Minister will take a call and say how she on the one hand champions the reduction of compliance costs, yet on the other hand has 40 pages in Part 2 of the KiwiSaver Bill that do nothing to encourage anybody to save but rather put a lot of additional paperwork and administrative barriers in the way of employers, and equally of employees.

Our fine National member Craig Foss once again gingerly pointed out that all that talk about KiwiSaver being voluntary was rubbish. It is not quite voluntary.

I move, That the question be now put.