KiwiSaver Budget Measures Bill

on behalf of the Minister of Revenue: I move, That the KiwiSaver Budget Measures Bill be now read a third time. As KiwiSaver approaches its eighth birthday it is now time to let the scheme be more about people saving for their own retirement and less about Government top-ups. This bill, therefore, proposes to remove the incentive payment of $1,000 paid by the Government to all new enrolees in the scheme, and thereby improve the value for money of the scheme. In short, we want the Government’s support to be not for opening an account, but rather, actually, for people saving. This change took effect at 2 p.m. on the date the Budget was read, on 21 May. People enrolled in the scheme before this will, as a matter of fairness, receive their $1,000 kick-start contribution. There is always that 3-month wait period, and that will still apply.

There have been some pretty ridiculous comments from members opposite that somehow this bill should not have been put through with a Budget measure. That is about as sensible as saying that tax changes or increases in alcohol taxes or other such measures should not take effect. We all know what that would do. It would result in a sudden rush of people simply taking the opportunity of having forward knowledge.

💬 Dr David Clark: Hang on. The argument was this has no effect.

The contribution from Dr Clark actually just shows how inadequate he is for Government. If you give people forward notice of rules changing, then people simply take short-term advantage and that is not to anybody’s advantage. I sat in this Parliament through nine Budgets under Labour, where such changes were made and put through as a Budget measure.

The KiwiSaver Budget Measures Bill does not affect other aspects of the scheme, and KiwiSaver members will continue to receive employer contributions and the Government-provided member tax credits of $521 per year. That is, the Government is going to continue to subsidise KiwiSaver schemes to the order of $640 million each year. As always, I am grateful for the efforts of those who have contributed towards the passage of this bill. I want to thank the officials for their work on the policy development. I thank the drafters. This is a bill that is about making choices in a Budget. There is a certain irony that members opposite always want to vote for measures like hardship help for children but they are not prepared to vote for the other changes that make those measures financially sustainable, and that is why it is an important part of the Budget.

The last point I wish to make in this debate is about the most telling part of the debate. In the last 48 hours there have been these very powerful nine words that will ripple shock through my electorate of Nelson, amongst the 700,000 receivers of national superannuation, and I want to conclude with these words—the words of Andrew Little yesterday: “I cannot commit to keeping New Zealand superannuation universal.” Those simple nine words speak volumes about what the members opposite want to do to the security of the retirement arrangements for hundreds of thousands of New Zealanders.

💬 Grant Robertson: He voted for asset testing. He was there. He voted for it.

I have to say to Mr Robertson that those nine words from Mr Little will guarantee me increased support in my Nelson electorate at the next election. I already have received emails from Grey Power members who are terrified by what those nine words mean, and I just simply say to members opposite that when they are dealing with the issue of superannuation they should state very clearly whether they agree with Mr Little’s statement yesterday: “I cannot commit to keeping New Zealand superannuation universal.” That is an answer I am looking forward to hearing in this third reading debate.

There is one member sitting in the House right now who knows all about how it feels to stop superannuation from being universal, and that member is Nick Smith. He was here in the 1990s putting on the surcharge and getting asset testing in place. If there is any member in this House who understands what it means to rip apart universal superannuation, it is Nick Smith. That is also the record of the National Government, in terms of this piece of legislation. Let us not let anyone watching misunderstand that when KiwiSaver went through Parliament in 2006, there were one or two parties that had some concerns about it at the first reading, and the votes were a bit split. The Greens and New Zealand First supported Labour’s bill all the way through. By the time we got to the third reading of the KiwiSaver Bill, one party was left opposing it.

💬 Hon Ruth Dyson: Who was that?

The National Party. That was who was left opposing it, and it has consistently undermined the KiwiSaver system—until today, when we come here to debate this commitment from the National Party to take incentives to save away from New Zealanders.

I went to a lot of electorate meetings during the 2014 election campaign. Wellington Central is an electorate where there are plenty of interested people who come out—

💬 Chris Bishop: There are two meetings a night.

—that is right—week after week. I think we had about 25 electorate meetings, and I listened intently every night to Paul Foster-Bell, and, occasionally, when he was indisposed, to Chris Bishop. I listened intently. James Shaw was there; he will back me up on this. At not one of those meetings was there a reference to the fact that this would be happening—that KiwiSaver would be undermined and the incentive taken away. Not once was that mentioned in the election campaign. Not once has it been mentioned in the 6 months that have occurred since then. The National Party, in a desperate clawing bid to make next year’s surplus look like it exists, has decided to do this, because this measure today will save the Government $175 million next year. And what is the figure of the surplus? It is $176 million. So there is a $1 million difference. You have heard of the Swedish rounding that happens at the supermarket, when they round up and down. Well, this is the “English rounding” to get you to a surplus—a $1 million surplus, after the $175 million has been counted from this.

This is a broken promise. This is a broken promise alongside a series of other broken promises in the Budget—the surplus promise, for example, and the promise that there would be no new taxes, to which we will come very shortly. Apparently, there were to be no new taxes; now we have three—another broken promise. John Key stood up in this House and said that debt would be paid down this year. No, it will not. [Interruption] In fact, the Budget documents tell us, Mr O’Connor, that it will be 2019 before any debt is paid down. Debt will be $93 billion by 2019, as well. That is another broken promise, and this bill is a broken promise.

At this time in the economic cycle, this is the thing that New Zealanders will come to understand. This is as good as it gets—3 percent growth this year, down to 2.4 percent by the end of the forecast cycle. Dairy prices are not recovering. There is no sign of a plan to grow exports—they are flat-lining as well. This is as good as it gets, and at the time when it is as good as it gets, what does National do? It takes to KiwiSaver. That is its plan. There is no plan to grow the economy in this Budget. What we have got is a “political management” Budget rather than a Budget to grow the economy, and if ever there was of a symbol of that, it would be this bill—a bill that takes away from the future. It steals $1,000 from future generations. If there was any looking to the future in this bill, it would be about initiatives to increase savings.

💬 David Bennett: Oh, more spending—more spending.

Here we go. David Bennett says: “More spending.” This is $1,000 to give people some dignity in retirement. Mr Bennett, have you got KiwiSaver? He is the one member who does not. He is the one member over there who does not have KiwiSaver. The rest of them all took their $1,000. I think Todd Barclay was about 2 years old when the bill went through. He got his $1,000, but they want to deny that to the rest of New Zealanders.

At the very peak of the economic cycle, we have 3 percent growth. In 2006 we had 3 percent growth in New Zealand. We had a surplus of billions and unemployment at under 4 percent. Now, with a growth rate of 3 percent, we have a deficit, and we have unemployment nudging up towards 6 percent. This is as good as it gets. It goes downhill from here, and on the other side of the House, there is no plan to grow the economy.

💬 Chris Hipkins: Look at “Benson and Hedges” sitting together.

That is right; a great combination, Mr Hipkins. The thing about KiwiSaver is that it has been an enormous success. In 2008 when National came into Government, it had already worked out, after opposing it in 2006, that it was an enormous success. So National members made the commitment that there would be no major changes. Well, there have been eight. This is the eighth change. This is another broken promise in a series of broken promises. National said that there would be no major changes, and that is because KiwiSaver has been a runaway success.

Every member of this House will recognise that New Zealand’s savings rate over many generations has been poor. We have not been good savers. One of Michael Cullen’s many significant legacies to this country is that he took the initiative to turn that round, and despite John Key’s standing up in Parliament in 2006 and saying that Michael Cullen was “dreaming, deluded, and in La-La Land” if he thought that a quarter of New Zealand would have KiwiSaver, it has vastly exceeded expectations. It has vastly exceeded the doomsaying of John Key. That is why KiwiSaver has been successful.

How unfair is it that if you were lucky enough to sign up to KiwiSaver on Wednesday, you got the $1,000 kick-start? Young families that I know of here in Wellington, who have been really excited about signing their kids up just after they are born and getting them involved—if they were lucky enough to do that on Wednesday, great, but if it was Thursday, then the kick-start was gone, even though the legislation has not even passed yet. There were amendments put up by members on this side of the House to say to the National Party that it should at least give people a chance—how about extending it out for a year or even 6 months? That suggestion was turned down. It was turned down because, fundamentally, this $1,000 kick-start has been wildly successful at encouraging people to join the scheme.

It is the people who need the kick-start the most—those on low incomes—who will be the most affected by this. The truth is that the choice to become a saver is a difficult one when you are on a low income. We know that saving has got a huge long-term benefit for people. We know that it has got a huge long-term benefit for people, but it is a big challenge when you are on a low income. So the $1,000 kick-start is the thing that makes the difference. Actually, someone told John Key this the day after the Budget. A young woman at a teen parent unit—I saw it on the television—said after she had met John Key that she wanted to get into that scheme, but that she just did not have the money to do it, and the $1,000 has been taken away. That is exactly the person out of whose pocket the National Government is today ripping $1,000.

The other people are the younger generation. I think it is exciting that when young babies are born, their parents say: “Let’s start the nest egg today.” That is great. That is called building a savings habit. Cameron Bagrie, the chief economist at the ANZ, does not often agree with the Labour Party, but today he has come out and said that the reason why we have got the incentive is to actually start the habit of saving. The problem is that if you get to 18 or 20 and you have not got that account set up with that $1,000, then there will be much less of a chance that you will carry on with it. National members can reflect on, as they sit over there, the fact that those are the two groups that they are taking the opportunity away from today. They are taking $1,000 away from those low-income earners and those younger people. We have had a lot of preaching from that side of the House since their late conversion to wanting to do something about child poverty. Well, here is something you could do: actually give people on low incomes the chance to get that $1,000 and to get that savings habit under way. This bill undermines one of the great retirement savings initiatives of New Zealand, and the National Government should be ashamed of it.

It is outrageous that that member, Grant Robertson, gets up and says these things, when his leader wants to kick people in the guts when it comes to their superannuation. He does not want to give New Zealanders the ability to retire in dignity; he wants to take away their hard-earned retirement savings by taking away their ability to get universal superannuation in New Zealand.

That member said that giving $1,000 to anyone who signs up to a bank account gives them dignity in retirement. The previous speaker, who will speak again, said his reason for having the $1,000 is to make them feel good. That is the economic rationale behind the Labour Party: to give $1,000 to everybody who signs up to an account.

The Inland Revenue Department has just put out a report on KiwiSaver. This report says that 38 percent of people who have signed up have never contributed since. Nanaia Mahuta says that is only the young people who have signed up for it. That cannot be the case, because two-thirds of the people who should be in KiwiSaver—low-income New Zealanders who should be saving for their retirement—are not in KiwiSaver. The people who are in KiwiSaver are the middle and high-income earners whom Labour wants to give a thousand bucks to in order to give them dignity in retirement and to make them feel good.

That is the Labour Party of old, that is the Labor Party of Australia, and that is the Labour Party that fails and is not good for New Zealanders or for savings going forward. The members are quiet because they know that that is the reality of what is going on. Their petty politics—they come into this room and try to sell to the New Zealand public that Labour is some kind of glorious party that would give them a thousand bucks. Well, every time you give a thousand bucks to every New Zealander who signs up to an account, you take $500 million off our accounts. When you do that, you put New Zealand further into debt. That is the thing that the Labour Party is advocating for.

New Zealanders need sensible economic management. If we are going to spend money in these times, we should spend it on the people who need it, for the first time in 43 years; we do not go out giving handouts to people who are the middle and higher income earners, just to make them feel good and to give them dignity in their retirement.

Well, that member who just took his seat, David Bennett, was in a lather, but he has overlooked a large number of relevant points. He really, really has misunderstood this bill. I guess that is what we have come to expect from him.

💬 Kris Faafoi: He hasn’t read it.

He may not have read it. He certainly has not read on any behavioural economics, as he just admitted then in his speech. What that member is going to have to face when he goes back to his electorate office are questions from hard-working New Zealanders who are trying to get ahead. The effect of this bill is that over 1,700 people per year—over 1,700 people per year—in his electorate of Hamilton East will miss out on that $1,000 kick-start contribution. I expect a whole lot—

💬 Hon Nanaia Mahuta: How many?

Over 1,700 per year will miss out on the kick-start contribution in his electorate. I expect a few of them will come and ask him some hard questions. They will say: “Mr Bennett, how come you and your National MP colleagues have taken this $1,000 and then stopped it for everybody else after you?”. That is what the people in Hamilton will be saying.

They will be saying that around the country. They will be saying it in Clutha-Southland. If they can track Todd Barclay down, they will be saying: “Todd Barclay, how come you took that $1,000 kick-starter payment and now you’re shutting it off for 1,700 people from our electorate every year for ever more?”. That is what they will be asking. They will be asking Mark Mitchell in Rodney: “How come you, Mark Mitchell, took away that $1,000 payment for ever more, even though you took it for yourself?”. In Rodney, 1,700 people per year will miss out, and it will be no different in any other electorate. It will add up to 7,000 people in every electorate in this country over the next 4 years who will miss out on this payment because of this Government’s refusal to tackle the long-term savings problem of New Zealand.

The Government is all about getting to some kind of sham surplus today because it has mismanaged the economy so badly—so badly. There is a $1 million—sorry, I wish it was $1 million! There is a $1 billion black hole that has opened up between the last Budget and this Budget. That is the mismanagement of this Government. It is short on vision and has failed to achieve its central election campaign promise.

What was the Government’s central election campaign promise? Well, do we need any reminding? The Government members said they would bring the books back into surplus this year. They have failed again. For the seventh Budget in a row the National Government has failed to achieve a surplus, despite making that its central campaign promise. This is a Government that is failing on its promises and losing the trust of New Zealanders.

New Zealanders were being promised a wage rise as well. The Government said that their wages would go up by $7,000 over time. In the Budget we heard Bill English kick that can down the road for another 3 years. There is always jam for tomorrow—another broken promise. It reminds us of the promise not to increase GST. John Key said they would not increase GST. After that election, he put it up to 15 percent. New Zealanders are counting the broken promises from this Government.

Here is another broken promise: we will increase exports to 40 percent of GDP. Well, they are down below 30 percent now and dropping, and projected to drop further next year. The Government members are not getting this economy back on the right foot. They are mismanaging the economy and they are taking from the pockets of children—taking from the pockets of children—to pay for their economic mistakes today. They are robbing the future of the children to pay for their economic mistakes today. This is a Government that is out of ideas. It is out of touch. Those members might as well resign, actually, and give us an election sooner, because they have no new ideas. They are failing to deliver on their promises. This measure is reducing savings at a time when we actually need an increase in savings. This is a time when we need long-term thinking, not the “short-termism” that this Government is putting forward.

The Government has failed to support the regions. It has failed to diversify the economy. It has failed to address the Auckland housing bubble. It has failed to develop the skills of New Zealand workers. And it is failing our economy more and more over time. This is a Government out of ideas, and this is its big idea in this Budget: a new tax. Let us not forget that National campaigned on no new taxes, and we have got three in this Budget alone. This is a Government that is so, so out of touch that it thinks it can break those promises and arrogantly carry on, and then pass this legislation under urgency, not allowing New Zealanders to have a say on it.

We heard the Financial Services Council come out today and say that this bill is like robbing the kids’ piggy bank to go down to the pub for a beer—robbing the kids’ piggy bank to go down to the pub for a beer. That is the kind of vision we have from this Government. Why will it not stand up and be counted? New Zealand is suffering as a consequence. This Budget is the seventh deficit in a row after nine surpluses from the Labour Government. This is economic mismanagement like we have never seen before. Those members should hang their heads in shame, and they are, and rightly so.

During the course of the debate over the last couple of days, some very, very silly things have been said by Labour members and members opposite. We had Andrew Little’s comment about how he cannot commit to keeping New Zealand superannuation universal. We have had Grant Robertson’s commitment to bring back the $1,000 kick-start. But the one that takes the cake is the comment made by the member who just spoke, which was that the Government should resign and we should have an early election. Really? I mean, come on!

After the worst Budget debate speech, probably since Parliament started sitting in New Zealand, ladies and gentlemen—after the worst Budget debate speech, and a party in total disarray, with David Cunliffe, David Parker, and Grant Robertson doing the numbers—do these guys opposite really want an early election? And after a Budget that raises benefit levels for the working poor and the poor in our society for the first time in 43 years—do these guys really want an early election? I do not think so. So that is going to take the cake in terms of silly things said by members opposite.

It has been a very strange debate in the Parliament, because what you have in the course of the debate on this KiwiSaver Budget Measures Bill is the Labour Party arguing for a form of middle-class welfare and arguing against a Budget that helps the most vulnerable in our society. It is some sort of weird parallel universe, and what does it say about their priorities? What does it say about the sense of priority of the Labour members opposite, when they are willing to defend something that is, sure, nice to have, but not necessary? And they argue against a Budget that delivers support and help for those who most need it. It is a very good Budget, which I and members on this side of the House are proud to support. It is a strange day in Parliament.

Mr Clark keeps asserting that this Government is mismanaging the economy. Well, actually, something interesting happened in the month of April 2015. April 2015 marks the first month since April 1991 that more people have moved from Australia to New Zealand than the other way. So there are a hundred people, a net gain in migrants, who have come from Australia to New Zealand. And why is that? Members opposite will say the Australian economy is not doing so well; that is true, relative to us. But it also highlights the importance of having a strong and fast-growing economy, and that is what we have. So nothing could be further from the truth.

This bill is another bill put forward by the Government in order to continue to strengthen the New Zealand economy and, as part of a suite of measures, as part of the Budget, to continue the New Zealand economy growing strongly. I commend the bill to the House.

I rise on behalf of the Green Party on this third reading of the KiwiSaver Budget Measures Bill. I am an Opposition member of Parliament, but I do not like being oppositional for the sake of it. I do not believe in tribalism. But as a member of the Opposition, I do believe that my role is to challenge the Government and to hold it to account. So during the course of this debate—I have actually tried to treat this as an actual debate, where we actually try to find out what the Government is thinking—I have asked a number of questions, in, I think, a fairly reasonable tone, and I think that they are fairly reasonable questions. I do want to acknowledge that some of those questions have been responded to.

I would like to start by just responding to some of those questions. One of the questions that I asked was why would you cut the kick-start for KiwiSaver now, rather than cut the member tax credit or reduce the member tax credit, when that would both save more money and keep in place the incentive that most people actually recognise. Nick Smith did respond to that. He said that we are doing it now because we want to incentivise people not just for opening an account but for actual savings, which is a pretty reasonable response. I understand that. But if people are responding to opening an account because of the $1,000 kick-start, then what you can predict is that fewer people are actually going to be opening an account in the future. What we know is that there are a lot of people—aspirational people—who are not earning a great deal now but who hope to earn more in the future who have opened accounts because of the kick-start programme. The accounts may be dormant at the moment, but these are people who want to earn more in the future and can see a pathway so that when they do they will have at least a little bit put away to start with.

The second question that I asked was whether the Government considered leaving the kick-start in place for a period of time—say 6, 12, or 18 months—to enable people who are not currently enrolled to have the opportunity to enrol, or to enable people who are partially through the process of enrolling to have a chance to actually complete their enrolment. Again, Minister Smith said we did not want a rush to take advantage of the programme. If we did not want people to take advantage of the programme, we would not have set it up in the first place. That is the whole point of the incentive scheme—to get people to take advantage of the programme. So, to me, that argument holds no weight.

Related to that, why cut the KiwiSaver now but delay the rest of the Budget hardship package? In other words, why take this away now and give people that gap, where they are screwed from both ends? Somebody referred to this as middle-class welfare. But can I just say that that question was not answered by any speaker from the Government side at any point during this debate. That leads me to the other five questions that remain unanswered. As I said, I think I have tried to ask pretty reasonable questions, in the spirit of holding the Government to account, and at the very least finding out what it is thinking. During the course of the debate no one—no one—has even attempted to try to respond to these questions, so I will ask them again.

New Zealand is 22nd out of 24 OECD countries for savings. Cutting the KiwiSaver incentive reduces the savings rate. What is the Government’s plan to increase savings? There is no plan. There does not seem to be a plan. We have not heard one yet. My next question is that the ANZ chief economist says that removing the KiwiSaver incentive will reduce the rate of take-up. What is the plan to maintain or increase the rate of take-up in KiwiSaver? I have not heard an answer to that question. There is no plan. Next question: how does reducing the KiwiSaver take-up rate impact intergenerational equity issues relating to today’s working parents essentially paying for three generations’ worth of costs? How does it deal with the change in the dependency ratio from 7:1 today to 2:1 in 30 years’ time? No one has responded to that question. Next question: the Government is reducing the short-term deficit by raiding New Zealand’s retirement scheme again. What is the plan for long-term—long-term—financial sustainability? Nobody has responded to that question.

I know that it is a Saturday and we are under urgency, and not all that many people watch Parliament TV. There have been a few people in the gallery—thank you for coming and watching. But it seems extraordinary to me that we could pass a piece of legislation of this much importance to this many New Zealanders about the long-term financial viability of the country and its residents and receive no answers to any of those questions. The Government is being completely unaccountable in passing this legislation. It is lazy to not be responding to these questions. It is arrogant to be relying on your numbers rather than attempting to respond to these questions. Like I said before, I think that these are reasonable questions, I have tried to ask them in a reasonable way, and I think I have asked most of them about four or five times, just in case anybody wanted to actually respond to them.

There are only a couple of pieces of evidence—of actual evidence—that we have seen in the House today in relation to the bill. One is the regulatory impact statement. But in the regulatory impact statement it says in three or four different places that they did not consider any of the impacts of this legislation beyond the financial impact on the Government’s books. In other words, we have no idea what this is going to do to New Zealand’s savings, to the New Zealand population, or anything other than the impact on the Government’s books. We have no idea what the impact is. The other piece of information that we have got is a 2011 report from Inland Revenue, which said that to remove the incentive would gut the programme. So we have seen no positive arguments other than to get the Government’s books back into black—an admirable objective, and I am fine with that notion, but other than that we have seen no evidence relating to anything else in terms of the impact of this scheme. The only evidence we have seen is that it will have a negative impact. For all those reasons, the Green Party cannot support this legislation. Thank you.

As a new member this term, I cannot believe the audacity of this Government and its members. I just do not know what is left for this Government to do to meaningfully address our growing trade deficit, for example. It is a Government of members who stand in front of the people of this country and tell us how important growing our export businesses are, but then it will not stand up in front of the people of this country and tell them that real export figures are going backwards.

I just do not know what is left for this Government to do that is meaningful to address the Government’s own growing debt. It is spiralling out of control. The Government tells us it is fiscally responsible and it has admonished this side of the House for being apparently irresponsible itself. But in its own books—its own books, which it obviously does not open very often—its debt continues to spiral out of control. Those members dare not stand there and tell New Zealanders that our debt is $19,000, or nearly $20,000, per person—they cannot stand there and tell us that that is fiscally sound. Even in the time of Muldoon’s Think Big projects, the per-person debt was half of that. These masters of fiscal management have overseen a growth in debt from next to nothing to $80 billion. They should not accuse this side of the House of distorting the truth. Someone is going to have to deal with this unsustainable debt, and it will not be that Government.

Business commentators have already described this Budget as piecemeal and reactive. If there is a plan behind this Budget, if there is foresight and meaningful consideration given to the future of this country, then the Prime Minister and his team have hidden that vision so incredibly well. Commentators went on to say that this Budget will do nothing to unite the business sector—that is, the National Government’s Budget has nothing to unite the business sector.

Regarding the KiwiSaver legislation itself, the National Government has just shown us how callous it is. The logic that it uses is that the $1,000 contribution is too costly an incentive. It is ignoring the tax that it took off its rich mates some time ago. It is ignoring the money that it may have saved from its welfare cuts in the 1990s.

New Zealand First asked, as a formal process in this House, for the Government to hold off—do not pass this bill; do not make it a retrospective piece of legislation. If the $1,000 contribution has no effect, which is the argument behind this bill, then why the urgency? Why not give our children a chance? Even the meanest estimate from the Government in the last couple of days, during which it has tried to convince New Zealanders that they will be giving only that up, is $25,000 per person at retirement. A more reasonable estimate—and I speak to the Minister who questioned my numbers; I did adjust for tax and I did use reasonable numbers—is that the lost income for our retirees is between $117,000 and $145,000 per person at retirement, based solely on the $1,000 contribution alone. That is just an unbelievable loss to our future generations.

With at least 500,000 New Zealanders—but many would argue it could be 1 million New Zealanders—still to sign up, the multiplication is basic. I will leave it for the backbench members over there to do the maths themselves, but New Zealand First asked this Government to consider halving the kick-start contribution to $500 dollars. The $500 seemed like a compromise. The savings, even at $1,000, are so minuscule as to be redundant—they truly are. But $500 we asked for. Let us be reasonable. Do not take it away so that many of our children now are missing out because of the miserly and ill-conceived processes of this Government.

The debate has been far-reaching and, I think, quite in-depth, and we have spoken about the fairness. From one morning to one afternoon we now have a disparity in entitlement between a child who applied in the morning of the day of the Budget and a child who applied in the evening. It just does not make sense. There was no warning. There is no fairness. It is simply a retrospective piece of legislation, and I think we all know—I think we have all seen—that that retrospective legislation is bad, basically. It often does more harm than the good that we think it will do.

I did not speak about it myself, but I will take this opportunity now to speak of certainty—certainty for New Zealanders in their savings. That is a key element of any successful savings fund. The New Zealanders who wish to use it must have certainty, but to cut away at it eight times continually over the years—whether you like it or not, certainty is so important in order for New Zealanders to have faith in a savings scheme that they can believe in, that they can use, and that will supplement their retirement income into the future. This Government has taken that certainty away in so many ways with this Budget, with this bill being just another example of that.

I ask this Government not to be so miserly—let us not take it all away; let us give New Zealanders some time—but, no. I do not think that at any stage in this debate there was any real engagement. Certainly no one was listening, as no one on that side of the House seems to be listening now. It is a presumed outcome. Those members are being lazy, they are not engaging, and they are using their majority to simply pass poor legislation through under urgency, with no engagement and no discussion with the people of New Zealand.

No one on that side of the House has listened to logic. No one has listened to reasonable requests based on compassion. New Zealand First cannot support this bill.

It is an absolute pleasure to rise in support of this bill in its third reading. A speaker on our side remarked earlier on today that it was almost like a parallel universe. What we see with this magnificent Budget introduced by this National-led Government is that this National-led Government is supporting those in most need, with the first increases to real benefits in 43 years—43 years. In that time there have been two Labour administrations, neither of which did the same thing. In terms of this this bill, what Labour is doing instead is advocating for middle-class welfare. So we have National supporting those most in need by doing something real, and Labour seeking to hand out money to people who, by and large, do not need it. That is a wonderful, wonderful thing to see, and I commend our leadership for its vision. I am fully supportive of this bill.

I just wanted to respond to a couple of things that the Greens speaker Mr Shaw had to say. He basically said that the primary incentive for people to be in KiwiSaver is the $1,000 the Government is giving. He basically said that people join KiwiSaver for that reason alone. That is not saving; it is simply Government expenditure. What we are doing is saying that instead of spending it that way, we will reprioritise it to those who need it most. That is helping the people who are in the most need. That is making the best, positive difference to New Zealand.

Mr Shaw asked what was going to incentivise saving. Well, that is easy. It is called growing the economy and creating more jobs and higher paying jobs, and what we have been seeing over the term of this Government is average wages rising faster than inflation. So if you want to help people to save, Mr Shaw, get in behind our Business Growth Agenda. That way you will do something that is positive and will work. I commend this bill to the House.

Just to respond to the point about growing the economy and that being the way to increase savings, I would like to draw the member Brett Hudson’s attention to this little graph from the Parliamentary Library. [Interruption] Oh, facts! We have facts in the debate—goodness! It shows that in the 1980s, household savings were just around $700 per household in New Zealand. Then, after this Government’s reforms in the 1990s, they went down to a point of almost negative $1,500, I think, while you were so busy in your paradigm, growing the economy.

Then we just managed to get above zero again after the introduction of KiwiSaver. Although I have some issues with some of the impact of KiwiSaver on inequality, the fact that it has improved average household savings is irrefutable. We have evidence from the Inland Revenue Department that tells us that the highly successful recognition for KiwiSaver is the $1,000 kick-start payment—92 percent recognition. It is the most successful part of the programme.

The projected increase in KiwiSaver membership is approximately 300,000 over the next 4 years. There would be fiscal savings to be made from cutting that kick-start; however, quoting the Inland Revenue Department from its 2011 regulatory impact statement: “this could damage KiwiSaver’s attractiveness to new members. There is a strong psychological boost attached with such an early initial increase in a member’s funds, and, on balance, the potential damage to public perception and to the initial attractiveness of KiwiSaver outweighs the diminishing value of fiscal savings made by reducing or removing the iconic kick-start payment.” That is the advice. But, of course, we do not have the advice being presented. And the members on that side of the House do not have the advice, because the regulatory impact statement did not ask those questions. The officials were not given the opportunity to provide that advice to the Government, because this legislation happened at the last minute to try to get closer to that ever-elusive surplus.

The only questions that were actually asked, and the only advice given to this House on the impacts of this bill, were on what it would do to the Government’s bottom line, because, actually, it just cares about the public relations exercise. That is what this is about. This is not about the current account deficit. This is not about the distribution of wealth in this country. This is not even about people’s savings or anything to do with our society and the well-being of people. This is a public relations exercise.

I want to remind the members on that side of the House that if an economy is not working for everyone, it is not working. What you are putting at risk is something that has helped get our households back—some of them, at least—into savings. This country has a massive issue with income inequality. You say that you care about that and that is why you are increasing benefit rates, and that is well, well overdue. But this country also has a very significant problem with wealth inequality. The top 1 percent in this country own 51.8 percent of the net wealth—that is as of the last time we had those figures. The bottom 20 percent have zero or little wealth, and many of them are in debt.

That is partially why this $1,000 contribution is so critically important. It is not peripheral. This is not about the middle class, because that $1,000 contribution was the one thing that everyone could get, even if they were on a low income and unable to contribute from out of their wages to the scheme because they wanted to ensure that their children could eat. I understand that you want to feed your kids before you put money in the savings for your retirement. I totally understand that. That is what this $1,000 represents. This legislation is the ripping away of that. That is not about a redistribution of wealth or consideration for the well-being of our society, as was suggested from that side of the House. It is the exact opposite. I really do take objection to the way that this has just been pushed through under urgency.

Order! I apologise to the member. I omitted to give her a warning bell, but her time has expired.

It is a very sad day for Parliament to be passing legislation that puts us back in terms of changing the social and financial security of older New Zealanders in the future—people who are just children or young people now. It has been a really bad day for the Government, actually. It started off particularly badly when Todd McClay, when reading his speech notes for the second reading, said that he was speaking on behalf of the Minister of Finance. This legislation is so rushed that the Hon Todd McClay did not even know it was in his name. I think that is a first for this Parliament. It kept going downhill after that. The Hon Gerry Brownlee suddenly had a rush of blood to the head, and he told David Bennett that he had had a rush of blood to the head and was going to take the next call. David Bennett had a rush of blood to his face. The tension was extraordinary as Gerry Brownlee took David Bennett’s call. They could have been advised to take some of his other calls later in the debate. I think it would have helped the National Party’s credibility.

In 2008 John Key made a very serious and consistent promise to the New Zealand public, and that was that there would not be significant changes to the KiwiSaver scheme despite National voting against it when it was originally introduced in 2006. That broken promise is now matched by the other broken promises about no new taxes or delivering a surplus. I do not know how new National Party members feel about going out—I am sure they had every honest intention—when it turns out that they have lied to people. How do they justify that? How do they say: “That’s OK. I will just go back to my electorate and forget what I said.”? People remember. I think that members of Parliament should have a conscience about what they committed to. If there is some genuine reason for them not being able to deliver a promise or, heaven forbid, breaking it, they must have the courage of their convictions to go back to their constituency, or to the people around where they live if they are a list MP, and explain that to them.

I do not think that one National backbencher will do that. They are just voting fodder. They are just being used as voting fodder. None of them seems to have had the courage to question or stand up to the people who made the decision. My understanding is that a very small number of Cabinet members made these decisions around this legislation, and that is a very bad place for us to be.

I just want to conclude by saying that helping the most vulnerable people in our society is a good thing, but it does not ever need to be, and it should not ever be at the cost of young savers just a couple of rungs up the ladder. That is what this KiwiSaver legislation does and that is why I am very proud to have my name on the Noes side and to be voting against this bill.

I have listened diligently and studiously to all the arguments from the Opposition, and the reality, if you go back to first principles, is that this is a piece of legislation that is really about helping families in need. This is about delivering $790 million of assistance to the people who really need it in New Zealand. That is why I believe that this bill is an appropriate thing to do. I commend the bill to the House.

I want to make one final contribution in this debate and one point in my final remarks on that. That is to the members opposite who have talked about the need to target assistance to those most in need. The point that I will make to them is this: the people most likely to be in KiwiSaver now are the people who are on middle and higher incomes. They are the ones who are most likely to have already benefited from the $1,000 kick-start. The people who are now most likely to miss out on the $1,000 kick-start are those on lower incomes who have not already signed in. A child from a middle-class family who has been signed up is going to get a better deal than someone who is on a minimum wage now and wants to sign up tomorrow. That is wrong. That is the unfairness.

The point that Mr Hipkins makes is absolutely right. The beneficiaries, or the winners, of this current policy are the middle and upper-class high-income earners. The people we really want to help are those beneficiaries who are not participating in this scheme. That is why, given a choice, we prefer to dedicate a $790 million package, $25 a week for each family with children on a benefit, rather than just an opportunity to take $1,000 from the taxpayer to put in their bank account to accumulate over a number of years without any contribution of savings at all. That is the choice.

I am pleased to stand and support this bill because it demonstrates that we on this side are fiscally responsible, whereas on the other side they have given no alternative. All other things being equal, where are they going to find that $500 million that we have found? There are only two choices. They either borrow it or they tax. That is what they would have to do. They would have to borrow that $500 million or they would have to increase the taxes of middle New Zealand, and that is why I do not support their proposal. That is why I commend this bill to the House.

I raise a point of order, Mr Speaker. I request under Standing Order 144 that a personal vote be held. Our reasons in New Zealand First for doing so are twofold: one, this is the most controversial piece of legislation that is being passed under urgency in the House at this time; and secondly, we continue to hear reports of MPs being seen off the premises, who we believe should be here.

No. All our members are on site. Thank you very much.

💬 Hon Members: How do we know?

Because we have evidence of that. Thank you very much.

💬 Ron Mark: Mr Speaker—

Well, I think we are in danger of getting outside a normal approach, but I will hear from Ron Mark as long as it is relevant. I will warn the member that if there is a question of evidence of members whose votes he knows have been cast being off the premises, the appropriate way of doing that is to raise it with the whip of the party. If there is a question of people’s votes being recorded incorrectly by a whip, then the initial thing that the member should do is to raise that with the whip or the person who is casting the vote. It is just not appropriate to raise it with me.

I understand that. I would simply make a request in accordance with Standing Order 144, which states: “A personal vote may be held after a party vote if a member requests one …”, and it goes on, as you know, “and the Speaker considers that the decision on the party vote is so close”, and the rest is up to you. But it actually says that a personal vote may be held following a party vote if a member requests one. I am so requesting.

I have been around here long enough to remember this coming up, and I may well have been involved in it myself. There is a ruling of Speaker Kidd, which is 69/6 and it reads: “The fact that the House may, on a party vote, divide rather closely might well be a pattern on every vote throughout a session.”, and I think that obviously there is a possibility of that applying at the moment. “It is clearly not intended by the Standing Orders that there should be a personal vote more often than not. Closeness on a party vote is not enough, of itself, for a personal vote unless there is something that might make a material difference. This might arise, for example, out of some elements of confusion.”

I would just add to that that I have sat through the majority of the third reading on this bill. I have heard nothing from, for example, a minor party, or any member that has indicated to me that a member’s intention was to vote in any way other than the way the votes have been cast by the whip. As I indicated to the member earlier, if it is his understanding that members are not present who should be present, that is something that should be taken up with the whips, who are the persons responsible for that.

I raise a point of order, Mr Speaker. I fully accept the ruling that you have made and that there will not be a personal vote on this. I wonder whether you might take up with the Speaker, when he is available, and with the other presiding officers, a wider issue, which is that the vote system that we have at the moment certainly relies on a degree of honesty. I keep very clear records, the National Party keeps very clear records, and I am sure all of the parties keep very clear records of who is in the building and who is not. I have also read the Speakers’ rulings and most of those relating to personal votes predate MMP, when votes along party lines were not as common as they are now. In fact they are now the default, and the other way, personal votes, are very rare. I wonder whether this may be something that presiding officers would now like to consider and come back to the House on—whether there are any circumstances under which the House may consider, if you like, an audit of whether in fact parties are voting with the numbers that they should.

Although it is an honesty system and members are all trusted on it, there does need to be, now and then, some check on that. As a whip, I fully accept that from time to time the Government may wish to check that I am doing what I say I am doing, and we may wish to do that. There is actually very limited provision, it would appear, under Speakers’ rulings and the Standing Orders for that to happen at the moment. That may be something that the Speaker and the other presiding officers or perhaps even the Standing Orders Committee may wish to consider given that now we are well into MMP and this is a new issue that has not really ever been tested.

With all due respect to Mr Hipkins’ view, we are 20 years into MMP. There has not been a case where a whip has been proven to have misled the House—

💬 Hon Annette King: We’ve never tested it.

Well, I do not know what happens in the New Zealand First caucus; I have got no idea.

The ASSISTANT SPEAKER (Hon Trevor Mallard): I just warn the Hon Annette King not to interject again.

What I can tell you is that Standing Order 144 is very specific about the role the Speaker has in determining whether or not there should be a personal vote, and the points advanced by Mr Mark are not called on in the test that you have to apply.

James Shaw, do you still want to make a comment?

Yes, Mr Speaker. You referred to Speaker Kidd’s earlier ruling about some element of confusion. If Mr Mark has been hearing stories that there are MPs off campus and the Government whip is saying that they are not, then that to me seems like an element of confusion.

I do not think I need any more assistance. The rules in the House have been very clear. A whip’s assurances, having been given, are taken for people who are casting votes, and that will continue to be the case. I will tell members that from my personal experience, without naming the particular member, I have myself, on occasions, gone down to a local tavern and hauled out someone who I knew did not have leave. People are very, very careful when casting votes to make sure that they are properly cast.