Labour promises compulsory KiwiSaver

Labour has pledged to make KiwiSaver compulsory, lift the retirement age and restart contributions to the NZ Superannuation Fund.

Thursday, October 27th 2011, 4:30PM 4 Comments

by Niko Kloeten

If elected it will make KiwiSaver universal and compulsory for all wage and salary earners, with employer contributions gradually increasing by 0.5% a year from 3% in 2014 to 7% in 2022.

However, employee contributions will remain at 2% because “many families are struggling with the rising cost of living and will find it hard to save more right now,” according to Labour leader Phil Goff.

“Universal KiwiSaver also reduces our reliance on foreign borrowing and builds up our own pool of savings to invest in Kiwi businesses and create jobs,” Goff said.

“We will be able to own our own future, and grow our economy – not someone else’s.”

The party will phase in the $1000 kick-start for all members at $200 a year for the first five years to reduce the up-front cost to the taxpayer of introducing so many new members at once.

Labour has also promised to increase the age of eligibility for NZ Super from 65 to 67, in contrast to National which says it won’t increase the pension age.

However, Labour’s policy won’t kick in until 2020, after which the age of eligibility will increase by two months a year for the next 12 years.

“By 2050, the number of people aged 65 and over will double to 1.35 million. Our bill for superannuation will also double so it’s vital we plan for our rapidly ageing population now,” Goff said.

“We believe it’s important to tell Kiwis the truth. As our population ages, the cost of superannuation will double and the cost of medical care will rocket upwards.

“Already one in three people aged between 65 and 69 are still in the workforce today and this proportion is projected to increase rapidly.”

Labour will also restart contributions to the NZ Super Fund - which were frozen by National - starting with $750 million in 2012/13, ramping up to around $2.4 billion a year by 2016.

Niko Kloeten can be contacted at niko@goodreturns.co.nz

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Comments from our readers

On 28 October 2011 at 6:03 pm Debbie said:

Here we go again... Labours plans based on charging employers more.... Next higher taxes for the middle to high income earners. Higher government spending and re-employ more government workers. Does Labour have anyone who understands finances yet? Take a moment to think how the country would have been situated if Laboutr had been in power for the last three years???? They left the countries books in a mess... Labour start to think about NZ's future. How are you going to dealt with our debt? What are you going to put in place for Natural disasaters?? Do you have the ability to manage such events???

On 31 October 2011 at 8:30 am Mike King said:

This space is NOT for political polemics, surely.

On 31 October 2011 at 3:26 pm Amused said:

Mike, politics aside Debbie's comments are actually right on the money as far as Labour's warped ideology on financial matters are concerned. The country will indeed be in a sorry state if they are allowed near the Treasury benches again come November.

On 2 November 2011 at 5:34 pm Mike King said:

Amused, you don't sound very (amused)!
Whether I agree with Debbie or not (in some respects I do, in others, not so much), I still think Debbie sounds FRANTIC, and WORRIED they might win (not a snow-ball's chance). Given the impossibility of Labour being able to implement any of their programmes, then why waste the energy slamming them about in this blog site?