Media Release

Wednesday 18th July 2007

DSC Call for Government to Come Clean About Kiwisaver

Growing concerns about Kiwisaver make it imperative that government stop giving a one-sided view of the scheme and spell out to the public the pitfalls involved, according to Democrats for Social Credit health spokesman, David Tranter.

The Kiwisaver for Kids scheme being promoted on the West Coast highlights the misinformation being bandied about by people who appear to have little understanding of Kiwisaver. For example, Westland District mayor Maureen Pugh was quoted in the media promoting it in schools, using the Fisher Funds company, and urging parents , “….to give their kids a government-guaranteed advantage in life”. (West Coast Times, 11 July). There is, of course, no such guarantee, Mr. Tranter said.

Michael Cullen’s reported comment on the West Coast scheme that he, “… welcomed the news it may soon attract some very young converts”, (West Coast Times, 13 July) glosses over the snags in Kiwisaver and contrasts sharply with the view of Andrew Gawith of the respected Gareth Morgan investments firm who recently stated; “The Westland Kiwisaver scheme is not a fully registered Kiwisaver provider and therefore should not be touting for business the way it is – the Securities Commission should be taking action. Encouraging kids to open an account to collect the $1,000 kick start grant is simply teaching kids to accept a bribe – yet another example of insidious corruption in my view. Fees may well eat away the value of small account balances – certainly I can’t see how any provider will make enough money from very small account balances to cover the cost of administering them. Smells like a bit of cross subsidising will be occurring”.

Gareth Morgan’s own comments on his website further emphasise the nature of the investment jungle adults and children alike are being urged to join.

Mr. Morgan states, “I do wish the Minister of Finance had cleaned up this industry before putting in place a regime that is going to herd the unsuspecting into a raft of long-term products that are not in their interest”.

Democrats for Social Credit call upon government to stop using Kiwisaver as a vote-catching bribe and to emphasise to the public that there is no guarantee and that it is subject to all the risks associated with any stockmarket investment, Mr. Tranter said.

ENDS

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