KiwiSaver ‘tinkering’ wont save economy – Goff

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Tue, 18 Oct 2011 6:04p.m.

By Rebecca Wright

The National Government has decided it wants to make KiwiSaver compulsory - almost.

It says it will automatically enroll all workers not already in a KiwiSaver scheme and then it will be up to the workers to opt out if they really want to.

It is what is called "soft compulsion", but it will not be introduced until the economy improves.

There are 1.8 million Kiwis currently enrolled in KiwiSaver but today Bill English had a message for the rest of the workforce:

“We believe there's merit in a one off KiwiSaver auto enrolment exercise.”

That exercise will mean around 550,000 employees will be automatically enrolled in the savings scheme - and given the option to opt out again.

The Government expects around 55 percent of the newly enrolled would stay in scheme, meaning 275,000 new members to KiwiSaver at a cost to the Government of $550 million over four years.

That is because of the $1000 kick start and yearly tax credit every member gets.

Mr English says the scheme will not kick in until the Government’s books are back in the black.

“We'll go ahead with this subject to reaching surplus and that's currently in the 2014/15 year,” says Mr English.

The Government has ruled out compulsion.

“Many New Zealanders have already opted out of KiwiSaver for valid reasons; for opting out of saving for their retirement right now, paying off their mortgage, [or to become] members of other schemes.”

Reception to the idea was mixed among those who will be affected.

Labour says National's plan lacks any substance.

“They're tinkering around the edges - this won't do it. This hasn't stopped the downgrade and the ratings agencies wouldn't be impressed by it,” says Labour leader Phil Goff.

It also failed to excite economist Shamubeel Eaqub.

“This is very much an incremental policy. I didn't see anything particularly new in there…it’s not going to change KiwiSaver. It’s not really going to change national savings. We do need to see something much more substantive than this.”

Just do not expect to see it before the election.

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Comments

19 Oct 2011 06:50a.m.

Jester wrote:

Clarke you numpty. Instead of skim reading one document and sounding off, I suggest you investigate the subject you are commenting on. The bunker convention was one of four recommended to 170 IMO member states in 2001. From 2001 onwards Labour could have ratified those recommended conventions but didn't.

18 Oct 2011 09:47p.m.

Clarke wrote:

lol Anne, Labour planned to sign the Bunker accord in 2009... National were asisstant chair of the committee... then before the 2008 election National met with Mining and Oil representatives. The one reason the tax payer is paying for the Rena cleanup is because the energy giants were given concessions by National to setup operations here. One of those is a maximum payout on oil spills from offshore platforms of $200,000. Rena could cost the tax payer millions more... because even though Maurice Williamson was assistant chair of the sub committee National let the legislation slide. Because it was started by labour, just as they walked away from the underground mining report... because it was done by labour. Under John Key corporate Giants like the oil companies are allowed to get away with destroying New Zealand... for free. Remember though that one of Nationals biggest supporters is Big Oil and Mining. If you want to see the perfect example of corporate corruption in New Zealand then it has to be the fact that instead of signing the bunker accord to protect the tax payer in 2009 as labour intended and Williamson was aware... they let it slide and now the tax payer is paying the majority of the cleanup cost. http://www.parliament.nz/NR/rdonlyres/C901FD34-146E-43A8-A8CD-3EE643C293CB/94261/DBSCH_SCR_4183_6372.pdf The link is a copy of labours conclusions and their intentions to sign the accord in 2009 after the general election.

18 Oct 2011 09:09p.m.

Te Rina wrote:

Well said Anne. Wasn't National opposed to Kiwisaver when it was brought in? And now they see it as the way to save our economy the only way to save our economy is to vote them out.

18 Oct 2011 08:16p.m.

Geoff wrote:

10 points Anne..!!

18 Oct 2011 07:15p.m.

anne wrote:

English had a meeting with mood's the rating agency,in those talks the savings record was a focus,so that is why we have a knee-jerk reaction of english,but savings are not until 2014-2015,this won't save a further downgrade,english and the nats denigrated two saver policies,kiwi-saver and the cullen fund, mainly because they were labour policies,nothing to do what is best for nz as a whole,the outcome, number 3 downgrade expected under english and the nats,incompetent handling of the economy,if they were in business they would be sacked.