KiwiSaver policy under scrutiny

In its latest Pension Commentary, the centre’s researchers say that Labour has followed a long tradition in New Zealand politics of making announcements on retirement savings issues without public discussion or supporting evidence.

Labour has said that it would increase KiwiSaver contributions, make KiwiSaver “universal” – with a number of exemptions for beneficiaries, those on limited incomes and the self-employed, stagger the payment of the $1000 kickstart and ask the Reserve Bank to implement a “variable contribution rate” to be used as a tool of monetary policy.

Susan St John, Michael Littlewood and Claire Dale write: “New Zealanders deserve a full debate on all issues associated with the financial implications of an ageing population. KiwiSaver must be part of that debate, but cannot be seen as independent of the whole retirement income framework.”

They say Labour is wrong to refer to its scheme as “universal”. “The Labour Party’s KiwiSaver will be ‘compulsory’ in the same way and to a similar extent that Australia’s Superannuation Guarantee scheme is compulsory. With universal NZS, all who qualify receive the same taxable amount, but the lump-sum at age 65 from KiwiSaver will reflect the distribution of paid work, with high earners the major beneficiaries.”