2. CHARLES CHAUVEL (Labour) Link to this
to the Minister of Finance
What recent reports, if any, has he received on the economic impact of increasing savings in New Zealand?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
I continue to receive a large number of such reports. These include reports from the Reserve Bank, from a US funds manager, Bill Buechler, and from a former Australian Prime Minister, Paul Keating, all of which have stressed the importance of increasing savings. Also, a substantial report from Treasury late last week makes the point that homeownership is not enough, and that New Zealanders also need to increase other forms of savings.
Hon Dr MICHAEL CULLEN Link to this
From 1 July this year this Government’s KiwiSaver plan will make it easier for New Zealanders to save for their retirement. It is a scheme that has been widely praised both in New Zealand and overseas, and I appreciate the widespread support from the House for this proposal. It is a pity that that support did not include that of the National Party, whose only aim was to cut taxes for the most well-off, rather than to increase the savings of those on moderate incomes.
R Doug WoolertonDid the Minister note in that report from a former Australian Prime Minister, Paul Keating, that policies to force people to save are unpopular, that poll-driven donkeys get nothing done, and that showing leadership in a bigger-picture view is what is required to deal with our looming superannuation crisis?
Hon Dr MICHAEL CULLEN Link to this
Yes. Mr Keating said that leaders get things done and that poll-reading donkeys get nothing done. I think that is a very reasonable comment to make in these circumstances. Australia, of course, went down the compulsory contribution route as a result of a trade-off in the early 1980s around inflation. My own view remains that compulsion for employees does not need to be a part of KiwiSaver in the future.