2. CHARLES CHAUVEL (Labour) Link to this
to the Minister of Finance
Has he received any recent reports highlighting the need for the KiwiSaver scheme?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
Yes. Statistics New Zealand last week reported that in the year to March, savings from all sectors fell to a total of $1.3 billion, well under 1 percent of GDP. This is the lowest level in 14 years. This followed a report from the World Economic Forum earlier this month that showed that New Zealand ranked 108th out of 131 countries for our national savings rate. This underscores why the Government has made KiwiSaver such a significant priority.
Hon Dr MICHAEL CULLEN Link to this
At the last numbers, well over a quarter of a million New Zealanders—closing in on 300,000 New Zealanders—are already enrolled in the scheme. But still the members opposite will not come clean on whether they support KiwiSaver or whether, indeed, they support cutting New Zealand superannuation, as they did last week. The next test will come very soon, when the House will be voting on the legislation for the enhancements to KiwiSaver announced in Budget 2007.
R Doug WoolertonCan the Minister confirm that had the retirement savings scheme been introduced in the late 1990s, as was proposed by New Zealand First, the New Zealand economy would now be reaping the benefits from the accumulation of 10 years’ worth of savings; and on that basis would he agree that KiwiSaver is better late than never?
Hon Dr MICHAEL CULLEN Link to this
I agree that if we had moved earlier on these matters, then it would be doing so. Indeed, I would go back to 1974 or 1975, when the third Labour Government introduced a savings scheme that was abolished, initially illegally, by the incoming National Government. Had that scheme proceeded at that point, New Zealand would have been in a far stronger economic position now than it is, and with a much stronger financial services sector, in particular.
Has the Minister received any international reports on the links between savings and wealth creation?
Hon Dr MICHAEL CULLEN Link to this
Yes. I have seen a report from Boston Consulting Group that found that personal wealth grew faster in Australia than in any other developed country in the 5 years to the end of 2006, due largely to the very large savings base accumulated through Australia’s superannuation scheme. That emphasises the importance of KiwiSaver’s proceeding in its current form and for Kiwis to get behind KiwiSaver and to ensure that it is highly successful.