FSC urges Hipkins to take another look

The Financial Services Council hopes with a new prime minister and deputy, the government will review KiwiSaver and defer the New Zealand Income Insurance Scheme.

Thursday, January 26th 2023, 6:00AM

by Andrea Malcolm

FSC chief executive, Richard Klipin says he welcomes incoming Prime Minister Chris Hipkins and Deputy Prime Minister Carmel Sepuloni’s commitment to focussing on the cost of living and inflation.

“While there are a number of policy areas to focus on, the FSC and its members believe deferring the New Zealand Income Insurance Scheme, an expensive and complex policy which adds costs for businesses and employees alike during a cost-of-living crisis, should be near the top of the list.”

Last year FSC research found that only 18% of New Zealanders have appropriate levels of income protection. Klipin says while the FSC supports the vision as New Zealanders are under-insured and there is a need for a safety net, the policy development has been rushed with a lack of sector engagement. He adds that the scope has crept from the original proposal to include income issues that are not related to protection, thus driving more costs.

“Deferring the implementation would allow for more time to get the details right and protect workers and employers from additional costs at this difficult time,” says Klipin.

The FSC also believes KiwiSaver is an area where quick progress can be made.

“After 15 years of KiwiSaver the time is right to review, refine, and improve the scheme to ensure it can deliver more adequacy in retirement for New Zealanders.

Klipin says four areas for improvement are participation, contribution, access and risk settings.

“The FSC is focused on helping Kiwis grow their financial confidence and wellbeing, and we welcome further opportunities to collaborate with the government on these crucial policy areas,” he says.

Prime Minister Chris Hipkins has reiterated that, during this term, he will keep to the promise made by former prime minister Jacinda Ardern about not introducing a capital gains tax.

He says NZ Super will not change.

In his first post-cabinet press conference he left the door open to considering these issues in later terms. However, he says any changes in these areas will come with a lot of warning.

"I'm not announcing tax policy today," he said.

"We will honour the commitments we made in 2020."

Tags: FSC