Kiwisaver has once again become a political football through
Labour's monetary policy released on Tuesday, Milford Asset
Management managing director Anthony Quirk says.
It was imperative to provide certainty to individuals who
were contributing to long-term retirement savings and
Labour's policy did not provide that.
Instead, it provided the potential for the Government to
interfere in the required level of contributions based on
short-term economic conditions.
Labour finance spokesman David Parker released, as part of
the monetary policy upgrade announcement, a plan to allow the
Reserve Bank to ask for KiwiSaver contributions to be
increased or decreased to stimulate or dampen down domestic
consumption, and inflation, instead of just using interest
The proposal had a mixed reaction with traditional Labour
supporters, such as trade unions, not making any reaction to
Contacted yesterday, Council of Trade Unions economist Bill
Rosenberg said the CTU supported a compulsory KiwiSaver
scheme and had proposed a 6% employer contribution, 2%
employer contribution, topped up by 2% from the Government.
There needed to be a provision for low-paid workers - such as
an increase in the minimum wage when it was brought in - and
continuing government contributions when people were out of
work, such as looking after dependants.
''There does need to be provision for low-paid workers, such
as an exemption and/or progressive application of any
increase in the employee contribution for monetary
purposes,'' Dr Rosenberg said.
Mr Quirke said National had ''tinkered'' with KiwiSaver, but
the general thrust of the Labour-initiated scheme, which
started in 2007, had remained intact and had been incredibly
There were now more than 2.3 million New Zealanders in
KiwiSaver, compared with Treasury projections there would be
680,000 by mid-2014.
The Government's contributions, which helped kick-start the
scheme, had decreased over time to be just 20% of total
contributions to KiwiSaver in the year ending June 2013, he
Individuals had signalled their support for KiwiSaver and a
need to save as they made up more than 50% of contributions
for the same period with employer contributions providing the
''The momentum in KiwiSaver is clear and will continue as
long as successive governments don't make too many changes to
what has become a very popular scheme.
''While the section of the community who have opted out of
KiwiSaver is in the minority, Labour's policy may vindicate
in those people's minds their decision not to join KiwiSaver
as they do not want the State to have any influence over
However, that seemed a forlorn hope in an election year but
there was no doubt a political accord between the major
parties on KiwiSaver, and superannuation policy in general -
including the age for a New Zealand superannuation
entitlement - would provide the greatest certainty for
long-term savers and retirees, Mr Quirke said.
At a glance
• KiwiSaver becoming a political
• More than 2.3 million members of KiwiSaver
• CTU wants protection for lower-paid workers
• Warning rents could go up under Labour Party