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Kiwisaver Scheme Fails to Address Savings Problem

19 March 2005

For Immediate Release

Kiwisaver Scheme Fails to Address Savings Problem

The KiwiSaver Scheme announced by the Government today fails to address the real savings problem, says Spicers Wealth Management’s Chief Economic Adviser Rozanna Wozniak.

“Although the KiwiSaver Scheme is described as primarily a retirement savings package, it would be more accurately called a first home buyer’s scheme with a retirement savings option tagged on.”

“There is no incentive for existing home owners to join. Why would you join just to get the initial $1000 joining bonus in 20 or 25 years time?”

Rozanna Wozniak says it is middle-income New Zealanders who ought to be saving more and are better placed to do so to achieve the Government’s aim of boosting savings.”

“Dr Cullen needed to be decisive to change the behaviour of this group, but KiwiSaver will not do this.”

In the Budget today, Dr Cullen said KiwiSaver would start in April 2007 and automatically enroll in a savings scheme all those aged 18 and over who are starting a new job. Members will chose from an approved list. Most other people between the ages of 18 and 65 (including beneficiaries), and employees under the age of 18, can also choose to join.

ENDS

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