The Labour Party's latest monetary policy, increasing
KiwiSaver contributions to control inflation, has gained
support from Former Reserve Bank Governor Don Brash.
Labour deputy leader David Parker last week unveiled his
party's "upgrade" of monetary policy, proposing that New
Zealanders be forced to save more through higher KiwiSaver
contributions to control inflation, rather than the Reserve
Bank lifting interest rates.
Dr Brash told TVNZ's Q+A show he saw "some merit" in the
"Labour has recognised that there's a need for another
instrument to get some pressure off the exchange rate and I
think it's a sensible thing to do. Will it work? I'm not
But Dr Brash said he did not support Labour's proposal to
make KiwiSaver compulsory.
"I don't favour compulsory saving for retirement - there is
very little evidence that it's increased savings in
Australia, KiwiSaver has not increased our savings rate here
Labour Leader David Cunliffe told Q+A the move to a
compulsory savings rate of 9 per cent would be slow and
"The movement into compulsory KiwiSaver and the gradual
increase in the contribution rate will be very gradual, very
slow, half a percent to one percent a year. We do not want to
see people's real incomes going backwards."
He said KiwiSaver would not be guaranteed by the Government.
"But people will have the choice to put them in very low or
very moderate risk investments, and because this is broad
based across the economy and there will be a large number of
institutions involved, we think that risk will be extremely
He said the new monetary tool would benefit all New
"Lower income New Zealanders will benefit from having lower
rents. Those who have their own homes will have lower
mortgages, they'll also have higher wages starting with an
immediate increase in the minimum wage to $15 and then a
second increase during our first year in government.
"Many will find themselves at least on the living wage across
the state sector."