Key accepts there is a savings problem

National has signalled a major shift in the party’s approach to savings and to KiwiSaver in particular.

Friday, September 15th 2006, 3:35AM

by Rob Hosking

Party finance spokesman John Key told a KiwiSaver conference this week that National would keep KiwiSaver but not necessarily in its present form.

On savings, Key - in a move from his previous non-committal stance – says: "I accept there is a savings problem in New Zealand."

He notes evidence that suggests overall New Zealanders are saving enough, but draws the distinction between national savings and individuals’ savings.

"There is a lack of understanding from New Zealanders about what it would be like to live on just New Zealand Superannuation when they retire."

New Zealand Superannuation is predicated on people owning their own home and having other savings, he says.

And on KiwiSaver he says, "the architecture is good but the content is crap."

And he singles out the recent decision to allow people to use their savings to pay off their mortgage.

"That lets people add more and more debt."

Key did not endorse compulsory savings, although, notably, he did not rule them out either.

But he did give something of a nod to the Australian model.

Key says New Zealand needs policies which get New Zealanders "thinking like Australians – seeing their assets as their house, their car, and their financial savings.

"And at the moment they don’t think like that."

Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.

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