by Rob Hosking
The cumbersome rules involved in running such schemes are seen as one of the reasons the number of employees in work-based savings programmes has more than halved since 1990.
The rules, particularly around the issuing of prospectuses, are “fiendishly complex,” says AMP New Zealand chief executive Ross Kent.
“They start with the presumption that employees are going to be duped by their bosses. Now if an employer is prepared make contributions so a saving scheme I think we can at least assume they are not trying to rip anyone off.”
The government has attempted to include changes to the rules in the latest Business Law Reform Bill. However, this change has been held up by New Zealand First.
Business Law Reform Bills are a relatively recent Parliamentary innovation, and the idea behind them is that minor, “tidy-up” law changes relating to business can be dealt with quickly.
However they are supposed to be non-controversial changes only, and they require the support of all parties in Parliament.
New Zealand First MP Dail Jones – who was a National MP during the Muldoon era – has criticised the whole concept of business law reform bills and has said his party will no longer support them.
“The Business Law Reform process has failed previously and delayed legislation to the detriment of the business community and society generally.,” he said.
There is also speculation that New Zealand First has opposed the bill as a way of getting at Commerce Minister Lianne Dalziel. Ms Dalziel has been a particular target of New Zealand First because of one of her other portfolios – Immigration.
However, it now appears New Zealand First may be about to allow the bill after all.
“We are confident we will be able to resolve this matter shortly,” a spokeswoman for Dalziel says.
The government’s [push to improve savings has placed particular emphasis on employment based schemes. In the state sector the last primary teachers’ pay round included establishment of a superannuation scheme, and this is to be gradually extended to cover all state sector employees.
Tax changes to remove the current disincentives for employees are also set to be passed later this year.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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