The managing director of one the newest Kiwisaver schemes says the Government's decision to remove the $1000 kickstart incentive to join a scheme has disadvantaged many members of the Islamic community.
Brian Henry said that for years, KiwiSaver generally had excluded the Islamic community because they had high ethical requirements for any investment.
The Amanah KiwiSaver Plan was launched in January this year by Ethnic Affairs Minister Sam Lotu Iiga.
Promotion of the scheme at mosques had been going only for a couple of months. It had 400 signed up members in that time and had $1.5 million in investments which were Sharia compliant and had been approved by a committee of Islamic leaders and scholars.
Mr Henry has written to Prime Minister John Key protesting at the changes - which have already been passed into law under urgency.
" Under [Islamic] ethical rules they do no invest in money lending, interest-based products (known as usury to Christian); alcohol, gambling, machines of war, pornography, tobacco and no pork," the letter said.
He said the launch of the scheme was a proud moment for the Islamic community and they were dismayed to have lost the $1000 kickstart before the offer had time to be understood by the many who sought a high level of ethics in relation to where they invested their money.
"They have - by your Budget decision - been penalised just when, for the first time, they had the opportunity to stand beside their fellow Kiwi citizens and provide for their future retirement."
Mr Henry, who has represented Winston Peters and Shane Jones in the past, said he still had a full-time law practice.
He did not make any money from the scheme but he saw a social need that needed to be filled.
The chairman of the scheme's advisory board was former Race Relations Conciliator Gregory Fortuin who was also acting in a voluntary capacity.
Amanah Ethical is the trade name of a company that runs the KiwiSaver scheme and a unit trust, Amanah New Zealand, which is also Sharia compliant.