I was very pleased to hear Mr Sam Lotu-Iiga say that we are a Government that listens. Well, I say that we should listen to the 91 percent of people who tell the pollsters that they are National supporters, that they will be voting in the referendum, and that they will be voting “No”. I say that if the National Government does not listen to those people, then it does not listen at its peril.
Hon Clayton Cosgrove: Point of order—
The CHAIRPERSON (Eric Roy): I do not think the member needs to tell me. When we began this debate, I prefaced it quite clearly with what the rules of the debate would be—that the debate should be relevant to the Government’s current spending plans as contained in the Estimates of Appropriations. I think the member has strayed well beyond that.
JOHN BOSCAWEN: Thank you, Mr Chair. I actually intend to continue. It was interesting that Mr Cosgrove should have a point of order—
The CHAIRPERSON (Eric Roy): The member cannot refer to a point of order once I have ruled on it. We just need to keep these things tidy.
JOHN BOSCAWEN: I was going to congratulate Mr Cosgrove and the Labour Party, because earlier this afternoon we heard from David Shearer. He said that the Labour Party was a bold party, and that it was a party of reform. He said that most major reforms had taken place under a Labour Government. I do not totally agree with that, but I certainly support what the Labour Government did in reforms from 1984 to 1990. In particular, I support the reform of introducing KiwiSaver.
I will address my comments on this discussion to pages 213 and 214 of the Estimates. Those pages relate to savings and the contribution to Government superannuation, or the Cullen fund, as Mr Cosgrove called it. The Finance and Expenditure Committee, of which I am a member, questioned Mr English at length on the issue of savings, and I found it very interesting that Mr English said the Government had made a commitment to reduce its contribution to KiwiSaver from 4c in the dollar to 2c in the dollar. The reason Mr English gave for reducing that contribution was that the Government should not have been borrowing large sums to fund New Zealanders’ savings. The Government should not have been borrowing large sums of money to fund New Zealanders’ savings. Well, I say there is a far more important reason to reduce that subsidy, because that subsidy is a subsidy from the have-nots to the haves. It is a subsidy by way of tax from people who cannot afford to save but who are still required to pay taxes. Those people cannot afford to contribute what was 4 percent, and is now 2 percent, to KiwiSaver. Previously we had a massive subsidy to save from those who could not afford to save. But I give full credit to the Labour Government for introducing KiwiSaver; it has laid the foundation. But the subsidies were far too generous. They have been reduced. But the foundation has been laid of over a million people who have joined that scheme.
I also find it interesting that Mr English, in his evidence to the select committee, went on to say that New Zealanders should increase their savings by reducing consumption. They should increase their savings by reducing consumption. I say to Mr English that a very simple way to increase savings in this country is to look at the experience overseas. We have to look no further than our near neighbour Australia, which has a compulsory savings scheme that stands at 9c in the dollar for every dollar earned that is paid into a savings scheme. The scheme is compulsory. It was interesting to hear from Mr Ralph Norris, when he was speaking at a function on Monday night. He told me that he was previously opposed to compulsory savings. Having been the chief executive of the Commonwealth Bank of Australia for the last 4 years, he talked about flexibility. He has seen so many people retire from the Commonwealth Bank in the last 4 years, and he talked about the flexibility with which they left. So I say to Mr English and the National Government that they can reduce that subsidy further. They can reduce it from 2c to zero cents. They can cut it out. The Government can cut out the subsidy from taxpayers who cannot afford to save, who are subsidising taxpayers who can afford to save. In my view, we should cut that subsidy to zero and we should make KiwiSaver compulsory.
That is an issue that I intend to talk about into the short, medium, and possibly long-term future. I see Mr David Carter looking at me, but I need to convince him and his Cabinet colleagues that we need to go down the route that was taken in Australia. We can also look at Singapore, which has had compulsory savings since 1952. Those savings laid the foundation for the redevelopment of Singapore following the Second World War.
Mr Cosgrove talked about cuts in the contributions to the New Zealand Superannuation Fund, dubbed the Cullen fund. Some members on the Finance and Expenditure Committee have said to National members that now is the wrong time to cut those contributions—now is the wrong time; the market is at an all-time low.