Compulsory KiwiSaver inevitable: Superann provider

Prime Minister John Key has ruled out making KiwiSaver compulsory, but a superannuation provider says it is inevitable the scheme will eventually go that way.

Under the current scheme, people are automatically enrolled when they start a new job and are given the choice to opt out.

Mr Key said the Government is considering an option in which those who have not moved jobs since the scheme started would also be automatically enrolled, but that the scheme would not be made compulsory.

However, Tower Investments chief executive Sam Stubbs said he believed eventually KiwiSaver would move in that direction.

"I think ultimately we will get to some form of compulsion," Mr Stubbs told Radio New Zealand.

"It's not too critical whether it's compulsory now or not, but the fact that you are encouraging people to save for their retirement is the most important thing."

Mr Stubbs said compulsory savings would be necessary if New Zealand wanted to move into the same realm as countries like Sweden, Denmanrk and Singapore.

"They are small countries, they have small populations, but they have very large savings pools and in order to....get very large savings pools you're probably going to have to have some element of compulsion," he said.

"I think most Kiwis would agree that it's a pretty reasonable ask to say that if you're working and receiving a wage you should be putting away something for your old age."

Mr Stubbs said he thought businesses would also welcome a compulsory scheme.

"Business in this country would want to be running their businesses in a country that has a large pool of money available for investment. KiwiSaver, right now, is getting nine out of 10 every savings dollars in New Zealand and the size of that pool could be very significant for business long term."

 

 

Making KiwiSaver compulsary

I understand the need for savings. However Kiwisaver is a crock. As a small business owner I resent having to fund staff savings when government are happy to change the rules so they have to contribute less.

If government wanted you to save, they'd simply give all savers in NZ a ceiling limit of up to $200K that will see no tax on the interest on these savings. That's what I see as being the real goal of Kiwisaver - that Govt has another pocket of funds it can scrape for tax and dip into.

Years ago Roger Douglas had an idea where as each child in NZ was born, Govt would give that child a "kitty" of $20K ( I think it was ), to be invested in any of the trading banks, tax free, so the interest could compound. Then if the child reached 21 without any criminal convictions, they get a fantastic nest egg - $480,000 - what a start in life!

Some farsightedness from Government could make this country far, far better off, but they need to bring in policies that make sense, not keep seeking other ways to bleed dry those tax payers who do actually pay their taxes.

[Abridged]

ODT/directory - Local Businesses

CompanyLocationBusiness Type
everedi rentalsDunedinVehicle Rentals
Dunedin Rugby Football ClubDunedinSporting Organisations
Mornington Play CentreDunedinChildcare & Kindergartens
Central Home SupportAlexandraCommunity Groups