“We want nothing but good for KiwiSaver, but we don’t want to see the existing schemes smashed in the process,” Asfonz Chairman John Melville says.
The existing workplace savings schemes represent people who have been doing what the government wants the rest of the country to do, he says, and it would be counter-productive, as well as unfair, for any new incentive measures to not include those schemes.
ASFONZ also hopes that whatever emerges out of the Budget on Thursday will have some sort of bipartisan support.
“Whatever they do I would hope it is something National will be able to pick up on and stick with. We’ve got to have something that will not be changed by future governments.”
Ministers have never confirmed New Zealand First Leader Winston Peters’ comments that some sort of tax break linked to savings would be in the Budget, but the lack of any sort of denial – particularly heightened expectations about Finance Minister Michael Cullen’s 2005 Budget nearly cost Labour that year’s election – has spoken volumes.
Investment Savings and Insurance chief executive Vance Arkinstall points out tax breaks for savings have been a difficult practical issue in the past, partly because New Zealand has abolished the need for most taxpayers to lodge tax returns – something which saves the government more than $30 million a year.
“But with KiwiSaver the whole thing is managed by the IRD. There would not be any need for people to file tax returns to get their tax break,” Arkinstall says.
One other senior industry figure suggests the Budget should not be half-hearted about savings.
“KiwiSaver is a great step forward,” AXA New Zealand chief executive Ralph Stewart says. “If it is a foil for compulsion, and you could see it that way, then could we just get there quickly? They should be taking two or three steps in that direction.”
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