Hon Dr Michael Cullen
Deputy Prime Minister, Attorney-General, Minister of Finance, Minister for Tertiary Education, Leader of the House

1 July 2007 Speech Notes

Embargoed until: 1pm

Saving for our future - 1 July Labour Leader’s Rally

Speech notes for 1 July Rally, Croatian Centre, 161 McLeod Rd, Henderson, Auckland

Today is an historic day.

Today is a landmark day.

And today is a proud day for the Labour-led government.

20 hours free early childhood education, low cost doctors visits for all New Zealanders and more security in retirement are landmark achievements, enshrining core Labour values.

And they have been achieved because we have managed the economy in a Labour way - prudently, fairly and with care for the future of our country.

This is a government that has committed itself to making sure New Zealanders have security in our social services.

This is a government that has committed itself to a sustainable New Zealand. Sustainability means providing for the needs of today as well as providing for the needs of the future.

KiwiSaver represents these core values.

It provides for our future because it means more New Zealanders will have a substantial pool of their own savings to call on when they retire. More New Zealanders will share in the wealth we create.

We don’t want New Zealanders who work hard all their lives to then find there is only just enough to get by when they retire. You should enjoy a comparable standard of living when you retire as you enjoy when you are working.

But if we look at low and middle income homes - those earning between 15-thousand and 50 thousand dollars a year, then only about one in six have any savings of their own, other than their house.

The government has done the hard yards with New Zealand Superannuation, to make sure families are not left destitute in their retirement. We overturned the cuts of the National led government and we bolstered it further.

We created the New Zealand Superannuation Fund which by the time of the election after next will be approaching $30 billion as long as we make sure National can't get its sticky hands on it because we are committed to the safety net of NZ Super, unlike those in Opposition.

But we can aim higher than that. We’re matching your savings to the tune of up to $20 a week. Your employer will phase in matching of your savings too.

And we'll help them do so with a tax credit of up to $20 per week. That's on top of your $1000 kick start.

We are helping more families enjoy greater security in retirement.

Take a typical family like Meg and Jack, each earning $37,500 a year before tax and each contributing four percent of their income.

After five years of saving they will have a first home deposit of $35,500.

If they join KiwiSaver when they are thirty, then when they are 65 they will have savings of $390,000 in today's money.

That's worth an extra income of $20,000 a year in their retirement, on top of their New Zealand Superannuation – effectively doubling their standard of living.

From today more New Zealanders will have the chance to own their own homes.

From today more New Zealanders will have the chance to build a pool of savings for their retirement.

KiwiSaver is not just good for individuals and families.

It is good for New Zealand too.

We Kiwis on average have been spending more than we earn. We have been spending as much as $1.15 for every dollar we earn.

That is putting pressure on inflation.

There are worse problems for a Minister of Finance to have than an economy that is growing too fast.

There are worse problems than an economy with record low levels of unemployment.

There are worse problems than an economy where families feel their incomes are rising so fast, and so securely, they are comfortable taking on more debt.

If that’s the worst criticism of economic management under this government, then we also have to look at the gains we have made - gains like low cost doctors visits, gains like low cost prescription medicine, and gains like free early childhood education.

But we should be prudent and address those pressures. We should take the pressure off inflation, off interest rates, off the exchange rate and off exporters.

The best way we can do that is to save more.

KiwiSaver gives everyone an incentive to save.

What is the alternative?

The Opposition finance spokesman says we are spending too much and we should tighten up - it’s hard to have low cost primary health care and free early childhood education if you are cutting spending.

So the Opposition leader says we should increase spending. And he says we should also cut taxes.

You can only do both by going into debt.

We are used to the National party trying to bribe us with our own money. Mr Key goes one step further - he’s trying to bribe us with our children’s money. They of course are the only people he is courageous enough to say no to – they don't vote.

Under National inflation would be higher, interest rates would be higher. Our exporters would suffer more.

Unemployment would rise.

That is the bleak alternative to the landmark social and economic policies of this government.

So today is a crossroads for New Zealand.

This government started out repairing the damage wrought in the nineties.

We have laid the foundations for strong and steady economic growth and we have made sure all New Zealanders have the chance to participate in the gains.

And now we are delivering those gains. All New Zealanders have a place at this table.

We always have choices.

We can choose to squander our gains today or to invest for our future.

We can choose to invest in people, or we can choose only to reward privilege.

We can choose to build or we can choose to burn.

This government is investing in our future.

We are building.

We are investing in people.

We are investing in our future health care, through lower cost primary health care.

We are investing in our future through our children having a chance at a good start early in their lives.

We are investing in our retirement through KiwiSaver.

None of these would have been possible if the government had slashed and burned as our critics urged.

None would have been possible if we had collapsed in front of critics’ calls to blow the surpluses in previous budgets.

None would have been possible unless we had a Labour vision for how good New Zealand can be.

So I celebrate this day.

This is a day made possible by a Labour vision for New Zealand.

And it is a future made possible by a Labour-led government.

ENDS

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