Two year old report underpins Labour's policy

Labour took a couple of big policy leaps this week, not only - as expected – proposing compulsory KiwiSaver but also lifting the pension age.

Friday, October 28th 2011, 7:40AM 2 Comments

The party's policy is designed to mesh with two other already released planks - a capital gains tax, and a return to a quasi-award industrial system.

But the savings policy is based on the belief that New Zealanders are interested in savings and retirement issues to an extent not seen for a generation.

In brief: KiwiSaver will be compulsory for all employees. The current employee contribution National is raising to 3% of gross income will be dropped back to 2%, but people will have the option of keeping it at 3%, or the previous levels of 4% or 8%.

Employer contributions will be gradually raised from 3% to 7% over nine years.

The age of NZ Super will be raised from 65 to 67, over 12 years form 2020.

In developing its policy, the party is setting a great deal of store on a Mercer report on New Zealand superannuation and savings policies, Securing Retirement Incomes, released just over two years ago.

Although not included with the formal policy launch yesterday, the party's Economic Development spokesman David Parker was delivering copies around Parliament's press gallery yesterday evening.

Not all of the conclusions in that report is to Labour's liking, but the analysis of the problem, and the ways in which increased savings could boost New Zealand's capital pool, are the aspects being highlighted by Parker.

The Mercer report also recommends new long-term savings products and government regulatory and other changes to encourage them: products such as annuities and long term indexed bonds.

Annuities did not get a mention yesterday, but party finance spokesman David Cunliffe said long term index linked bonds is something the party will be talking more about later in the election campaign.

The party is still to announce all of its economic policy.

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Comments from our readers

On 28 October 2011 at 10:31 pm whoseSaver? said:

The age of NZ Super will be raised from 65 to 150 (after die), and changed the name as "DiedSaver". Employer Pay = Employee Pay, all the same: if all "DiedSaver" paid by Employer, Employer can reduce Employees' wages or do not increase Employee's wages, or only increase very little year. You are the boss, what ever, you set up your policy!!!

On 31 October 2011 at 11:46 am Barry Milner said:

whoSaver is obviously from the John Mitchell school of clear thinking and communication. WHAT?