KiwiSaver plan 'not the answer'

The policy, part of an announcement by the party’s finance spokesman, David Parker, this week, called for the Reserve Bank to be given an additional tool:  Instead of relying solely on the official cash rate, the party proposes to give the Reserve Bank the ability to alter compulsory KiwiSaver contribution rates as a way to alter consumer behaviour and slow inflation.

Claire Matthews, of Massey University, said KiwiSaver contribution rates should increase, but not in the way Labour is proposing.

“The spectre of the government meddling with KiwiSaver is not welcome,” she says. “It’s the realisation of the fears of many Kiwis, especially those who have not signed up to the scheme.

“Using KiwiSaver as a form of monetary policy is really straying away from the purpose for which it was created.”