PM, Goff clash over Budget changes

John Key and Phil Goff clashed in Parliament yesterday over whether the changes in tomorrow's Budget to KiwiSaver, Working for Families and student loans amounted to broken promises by National.

"If there are any changes to them, New Zealanders will be able to vote on that - it is called election day," the Prime Minister said in response to questions from the Opposition leader.

Mr Key also rejected Mr Goff's suggestion changing the rules of KiwiSaver eroded trust and confidence in the savings scheme.

"The No 1 way to gain trust is to have a series of policies, go out to the public and campaign on them," Mr Key said.

"Governments change their positions. Good governments in transparent times take it to the people."

The Government recently adopted the position that the Government's contribution to KiwiSaver of up to $20 a week - or $1040 a year - was borrowed and therefore did not contribute to greater national savings.

Mr Goff questioned why it was classed as "borrowing" to put money into KiwiSaver but not when it came to the $2.5 billion-a-year tax cuts passed by National.

Mr Key last week foreshadowed changes that will see the Government's contribution fall and the starting rate for savers and their employers rise from its present 2%. National had cut it to 2% from 4%.

Mr Key said he realised people did not change from the rate at which they started, whether it was 2% or 4%.

"What we know is that people live to their means."

KiwiSaver worked "because the money comes out of your pay packet and, once that happens, people don't give too much thought to it. They just carry on living to what they have and take home every week."

Finance Minister Bill English hinted his Budget would not be big on setting new incentives to save.

"I don't think there is any magic formula out there ahead of us."

- Audrey Young

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