Scoop has an Ethical Paywall
Licence needed for work use Learn More

Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

Changes to KiwiSaver unfortunate

Media Release

17 May 2007

Changes to KiwiSaver unfortunate

The Retirement Policy & Research Centre at The University of Auckland raises concerns about the latest changes to KiwiSaver, announced in the 2007 Budget.

Susan St John, co-director of the Centre said that the very large tax-funded contributions to KiwiSaver will:

1. see huge shifts from other forms of saving to KiwiSaver.

2. not address the problem with the Current Account Deficit – in fact it may worsen the present position.

3. will widen the gap between the poor and the rich in old age – gaps measured by pay during the working life will be amplified by contributionrelated benefits in retirement.

4. impose huge compliance costs.

5. increase consumer spending in early retirement and so detract from savings goals.

6. encourage housing as an investment by the complex first home-owner provisions, although the detail of who is eligible is no clearer than before.

7. enhance overseas investment not investment in New Zealand.

8. cause a diversion into PIE and similar schemes with the reduction of the PIE rate to 30% with significant tax losses. The advantages accrue to the better off, especially those on 39%.

9. destroy any political consensus on retirement policy and put New Zealand back to the instability we had before the 1993 Accord.

Susan St John said “the high international regard in which New Zealand’s simple, equitable and non-distortionary retirement income policies are held has been seriously undermined."


ENDS

Advertisement - scroll to continue reading

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 
 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured News Channels


 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.