[The Wrap] Nats' KiwiSaver policy nuts
One way to undermine KiwiSaver is to keep tinkering with it and make changes. And that is exactly what National leader Judith Collins is promoting.
Sunday, August 2nd 2020, 4:54PM
During the week it announced, a so-called Covid-19 recovery programme which would let the newly-unemployed draw down $20,000 from their KiwiSaver accounts to start a new business.
The BusinessStart scheme would also provide tax credits worth up to $10,000 that people who had lost their jobs since March could invest in their venture.
There's one word to sum this policy up with. Nuts.
KiwiSaver was established as a retirement savings scheme with members' money locked in until they are 65. (Unless they qualify for a hardship benefit or use it for a first-home purchase).
National leader Judith Collins said KiwiSaver was money members had “put aside for a rainy day”. Wrong. She doesn't understand the purpose behind the scheme.
Allowing people to withdraw $20,000 to establish a new business is totally the opposite of what the scheme is about.
Considering the high failure rate of SMEs National's policy would likely leave people worse off in retirement.
And it would probably get worse as people setting up the new businesses are highly unlikely to be contributing to their KiwiSaver.
This ill-thought out policy reaffirms my long-held view that National are not a party that does much positive in the savings world.
If you think back over the years all the innovations come from Labour governments. On this list are KiwiSaver, NZ Superannuation Fund (I know some people don't like the so-called Cullen fund), PIE tax rates and more.
National's positive contribution to financial services over the years is rather meagre.
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