Harawira: Kiwi Saver Bill - First Reading
Kiwi Saver Bill - First Reading
Hone Harawira, Member of Parliament for Te Tai Tokerau Thursday 2 March 2006 Kia ora Mr Speaker, a, tena tatou katoa Good Idea - Bad Execution
Mr Speaker it looks like here we go again.
This Kiwisaver Bill is a good idea, unfortunately designed by people who are divorced from the reality of those who it is supposed to support, particularly the whanau of the working poor and the families of beneficiaries.
And now it comes before us for consideration Mr Speaker - bit of a joke really - whose individual tax bills are bigger than the annual income of half the people in Aotearoa.
Mr Speaker, let me first say that Government is to be commended for its efforts to set up a workplace scheme to encourage people to sign up to long-term retirement savings plans, with the offer of a $1000 Government sweetener to get things rolling.
And the ability to use Kiwi-savings as a home deposit is also a positive step in encouraging workers to save for their own homes.
The Maori Party supports the thinking behind this Bill because it aims to help whanau to become financially secure and self reliant into the future.
But while the Government in its fumbling, flip-flop, sort of way is trying to encourage people to save, this Bill will sadly not address the issues faced by low-income families.
Rights of the Poor
Yesterday Mr Speaker I quoted Nelson Mandela who said 'A political movement must keep in touch with reality and the prevailing conditions'. Mandela also said in referring to poverty that "It should never be that the anger of the poor should be the finger of accusation pointed at all of us because we failed to respond to the cries of the people for food, for shelter, for the dignity of the individual".
The rights to food, shelter and human dignity are determined by a people's access to those rights. In this country, that access is determined by the income, or the wages that people get. And its that low level of income that we need to focus on in consideration of this Bill. Savings Threshold
The Bill sets at 4% as the threshold for getting into the Kiwisaver scheme.
That is a real problem for those on low incomes, and particularly for low-income working families, and we note here that for a young family with the breadwinner on a minimum wage, that will mean a drop in wages which they simply cannot afford. We note that at 4%, the bill also makes it impossible for beneficiaries to join the scheme, and given that unemployment for Maori is three times higher than for the general population, Maori will be doubly penalised.
And we would suggest that the initial $1,000 "sweetener" will soon lose its glow.
In terms of the home deposit, there are also issues that need to be addressed.
One of those is that the home deposit is only available after three years
- a long wait for families whose living conditions are not likely to be the best anyway.
Another is that there is no scope to increase the $1000 government commitment based on family size, which means inequitable delivery to young low-income families.
Furthermore, the fact that only 3000 households per year can qualify for the Kiwisaver home deposit, limits the potential to lift people out of poverty.
With the continuing rise in house prices, it is unrealistic for a family on a weekly income of $290, to service a $200,000 mortgage.
And when Westpac can get 'fail safe' mortgages from government, while ordinary kiwi workers have to bust their backsides to pay every cent or get booted out of their homes, you really do have to query where Government's priorities lie.
The Council of Trade Unions also points out that while house prices have rocketed up over 50% in the last three years, wages have sputtered along to a pathetic 8% over the same time.
Old Age Never Comes
Mr Speaker, one of the key concerns we have with this Bill, is that quite simply, it discriminates against Maori.
The facts are that Maori just do not live past 65. What that means is that while Maori, like everyone else, will be encouraged to join the Kiwisaver scheme, less than 4% of Maori will actually live long enough to derive any benefits.
That Mr Speaker, is simple discrimination.
Mr Speaker, if this House is really serious about helping the Kiwisaver, we need to get a clear picture on who this Kiwisaver might actually be. The Social Report 2005 noted that well-being for Mäori and Pacific peoples in health, economic standard of living and education is poor, particularly in areas like Northland, Gisborne and the West Coast. Yet the Report also criticises the action taken to reduce inequalities as being uneven and inconsistent.
Mr Speaker, this House needs to be aware that the UN Rapporteur, Professor Rodolfo Stavenhagen, in his visit here last year, was critical of the lack of quality data to identify disparities for Mäori.
And as Maori Party co-leader Tariana Turia told this House last night, if you do not have the right data, you can not properly target your social policy.
In terms of that data, what we do know is this: * Wage levels for Maori and Pasifika are considerably lower than for Pakeha * Maori and Pasifika have difficulties with housing affordability and overcrowding * Polynesians also figure highly in unemployment statistics * Meaning that Maori and Pasifika will struggle to participate in the Kiwisaver scheme
General Concerns The Maori Party also has a number of other concerns with this Bill. We are concerned:
1. that yet again society's 'under-class' will be bypassed, because as with Working for Families package, the Kiwisaver scheme will exclude beneficiary families.
2. that this bill won't change the child poverty that ravages this country, because a poor child born today into poor housing will have already passed their most formative years before this Bill has any impact on society.
3. that, given the fact that there are more than 250,000 children in Aotearoa living below the poverty line, this policy has no child impact analysis at all.
4. that the government will not guarantee the Kiwisaver schemes, and that again the risk will be taken by the poor worker
5. that low-income families may get sucked into what might look like a worthwhile scheme when in fact limited finances might best be spent on food, mortgages, and the kids.
6. that the record of managed funds suggests that Kiwisaver returns may disappoint those being asked to invest their hard-earned money. \
7. that the number of low-income families relying on food banks is still rising.
8. that the commitment from employers may be too high an expectation for small businesses. Suggestions
Folks if we really want to lift the game in Aotearoa, this Bill won't do it in its current form. But the Maori Party is nothing if not helpful, and we've got a few suggestions that we would like to put forward:
1. Raise the minimum wage to make the scheme more feasible - $12.50 is a good start.
2. Introduce legislation to limit the capability of loan sharks to terrorise communities of the poor, and to reduce the easy access to credit for low income earners.
3. Re-introduce savings schemes to encourage children to learn to save, and introduce budgeting education to schools.
4. Give those with a lower life expectancy the entitlement at an earlier age.
Support In closing Mr Speaker, the Maori Party supports the thinking behind this Bill because it aims to help whanau to become financially secure and self-reliant into the future. But we will not be supporting it at this first reading, because the negatives far outweigh the positives. And we will be doing our best in the select committee stage to bring these concerns to the table, based on our commitment to represent our constituents to our best ability.
Kia ora tatou katoa