CTU MEDIA RELEASE
09 October 2008
National’s KiwiSaver cuts double what is reported
“Further reading of National’s economic management plan shows alongside National’s plans to cut employer contributions
to 2 per cent and abolish the employer tax credit, it will also cut the government contribution (member tax credit) to 2
per cent, leaving many workers earning under $52,000 much worse off.”
“While somebody on an income of over $52,000 would still attract the full current $1,040 government contribution,
because National have reduced the minimum contribution rate to 2 per cent, they have also said they will cut the
government contribution to this minimum rate also.”
“So a worker on $30,000 a year contributing 4% to KiwiSaver will lose $440 a year from the member tax credits, plus the
employer contribution would be reduced to 2 per cent – which sees them losing another $600 a year. These workers would
be worse off by $20 a week.”
“In addition, National are misrepresenting the union position on KiwiSaver. Unions did not want a 2+2 option that
removes employer tax credits. That will make it much harder to persuade employers to contribute more than 2% and will
also mean that some employers will put pressure on workers to fund the employer contribution out of a wage increase.”
“Unions also support a 4 per cent supported option for workers who choose it, and recognise that hundreds of thousands
already have, and will be hugely disadvantaged if National implements their changes.”
ENDS