What the PM said on Savings Initiatives
The following is what Prime Minister Helen Clark told Parliament about the government's savings initiatives.
Wednesday, February 2nd 2005, 6:34AM
New Savings Initiatives
The government is developing new savings initiatives, both to help New Zealanders build up their assets and security, and to reduce our national reliance on the savings of others.
Since 2001 our saving rate has exceeded that of Australia, the United Kingdom, and the United States, but it remains below the OECD median.
Asset ownership is important for enabling people to participate fully in society. Assets provide families with greater security, control, and independence.
The more evenly assets are spread in a community, the more social cohesion there is at a national level, the more all New Zealanders can benefit from economic growth.
Savings are also needed to finance better living standards in retirement.
With the New Zealand Superannuation Fund established by this government, all New Zealanders have the certainty that a basic pension will be available to them when they retire.
But New Zealand Superannuation alone cannot provide the standard of living to which most retirees aspire.
For that, New Zealanders must add to New Zealand Superannuation with their own savings, but, for many, developing the habit of putting money aside now for the future is not easy.
There are many pressing demands on limited incomes. Yet the international and domestic evidence suggests that our failure to save adequately is not just because people don’t have a lot of money.
Many people lack confidence in making decisions about how to save. That means they put off the difficult decisions and fall back on non-saving habits.
Establishing a saving habit will be the single biggest factor in lifting the saving rate.
That’s why this government will take active steps to help people establish that habit.
We believe New Zealanders will save more if they have confidence in the saving vehicle chosen, and when they are aware of the differences it will make to their life chances.
Our first step last year saw us establish a new superannuation scheme for public servants, providing for employer and employee contributions.
Forty six per cent of those eligible to join that scheme have done so already. As awareness improves, I am confident those numbers will increase.
But it is not only our own employees who deserve some assistance to establish retirement savings.
The comprehensive report from the workplace savings group last year offers a viable way ahead for retirement savings.
Proposals have also been put to government for encouraging tertiary education savings.
This year we will be announcing further initiatives to encourage more families to participate in workplace savings schemes. That will help build a more broadly based ownership society in which more New Zealanders can enjoy the security of their own home, afford higher education for their children, and have a good standard of living in retirement.
Traditionally New Zealanders’ principal assets have been their homes. Yet the thorough dismantling of state support for first home ownership by the last National Government took away tools developed over the previous half century to help families acquire homes.
Our government is concerned at falling rates of home ownership. The mortgage insurance pilot introduced in September 2003, was this government’s first step back into this area of policy.
How to encourage savings which could lead to home ownership is under consideration now.
But home ownership is not the only investment families may want to make.
Establishing savings to reduce the need to borrow for tertiary education or training is also likely to be an objective for many families.
This government believes new initiatives are needed in these areas. We are developing policy to encourage a co-ordinated lifetime approach to savings.
We know that the building blocks for a confident and secure nation are confident and secure families. An ownership society, in which every family has a stake and sees a future, makes our country strong.
This is an extract from the Prime Minister's Statement to Parliament
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