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Don't tinker with KiwiSaver in Budget: WSNZ

The Government has a golden opportunity in this year's Budget on 19 May to continue to build trust in New Zealand's financial markets by not tinkering with KiwiSaver benefits.

Friday, May 6th 2011, 8:36AM 1 Comment

That's the view of Workplace Savings NZ, the voice of workplace savings.

Chairman David Ireland says the industry considers it highly likely that KiwiSaver incentives are at the top of the list of the government's savings targets in the upcoming Budget, and another casualty might be the first home deposit subsidy from Housing New Zealand.

Given the current economic climate, he accepts the need for the government to look carefully at the full range of its spending priorities. 

However, he feels a government decision that resists any temptation to make major inroads into KiwiSaver benefits would signal to both savers and the business community that they can have confidence in the sustainability of our savings framework. 

There are currently 1.65 million New Zealanders who are using KiwiSaver as a preferred savings vehicle, with over $8 billion locked away. 

According to Ireland "Both savers and the industry need to have confidence in the sustainability of current and any future savings initiatives if that savings success story is to continue."

Ireland says that whilst the Savings Working Group came up with a range of possible options for Kiwisaver, there has been minimal consultation with the industry about the effectiveness and impact of those options.

"We hope the lack of consultation is an indicator the Government will stick with its existing policy, and not make a short term decision, in light of current economic pressures, that will have negative long term consequences on workplace savings."

It would also show the government continues to have regard for its long term objectives, whatever way the economic winds are blowing at any given time.

"Actions speak louder than words: all the talk about the need to increase the level of New Zealand's savings to address the pressures caused by an ageing population would count for nothing if the lifeblood for KiwiSaver is cut off. 

"Damaging trust and confidence now may have a permanent impact on how New Zealanders save for their retirement," he says.

Budget to include KiwiSaver changes »

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Comments from our readers

On 13 May 2011 at 1:13 pm Noel said:
How many billion dollars of unpaid student loans are owed to the government???? What are they doing to get it paid back????? Instead of kicking in the guts those that are trying to do something towards saving for retirement why don't they chase the student loan debt or is it in the too hard basket. (It would just about rebuild Christchurch). One easy way to start getting repayments started will be to STOP renewing passports to those students that are not repaying debt. Old story no interest on debt no interest to repay.
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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 ▼3.09 3.25 3.39
ANZ Special - ▼2.49 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online 2.95 1.99 2.35 2.45
Heretaunga Building Society 4.99 3.50 3.40 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.45 2.65 2.79
Kainga Ora 4.43 2.93 3.07 3.24
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
Lender Flt 1yr 2yr 3yr
SBS Bank 4.54 3.05 2.99 2.99
SBS Bank Special - 2.55 2.49 2.49
The Co-operative Bank - First Home Special - - - -
The Co-operative Bank - Owner Occ 4.40 ▼2.49 2.69 2.79
The Co-operative Bank - Standard 4.40 ▼2.99 3.19 3.29
TSB Bank 5.34 3.29 3.45 3.59
TSB Special 4.54 2.49 2.65 2.79
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.09 3.29 3.39
Westpac - Offset 4.59 - - -
Westpac Special - 2.49 2.69 2.79
Median 4.55 2.94 2.99 2.80

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