Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


KiwiSavers back lower KiwiSaver fund tax rates

KiwiSavers back lower KiwiSaver fund tax rates paid for by abolishing the
$521 annual tax credit

A Horizon Poll commissioned by the Financial Services Council shows KiwiSavers support removing the annual $521 members tax credit (MTC) to fund lower KiwiSaver fund tax rates.

$288,000 benefit from lowering tax on savings interest:

These proposed changes would mean someone on an average income, if they moved from a conservative to a balanced fund, could cut their KiwiSaver contributions over 40 years by $164,000 and reduce the impact of tax on their KiwiSaver earnings by $288,000.

In October 2013, Horizon asked 2850 New Zealand adults “If KiwiSaver were to become compulsory, the current tax credit would no longer be needed to encourage people to join.

The saving to the Government could be used to cut taxes on KiwiSaver investments to increase retirement incomes with lower contributions. How strongly would you support or oppose this?”

FSC Chief Executive Peter Neilson said “More than 49% of KiwiSavers supported such a change while 11.5% opposed it. Even the 8% of KiwiSavers who only contribute just enough each year, $1042 to get the $521 annual tax credit, were more supportive (48.8%) than opposed (24.5%)”.

The current effective tax rates on KiwiSaver funds are the highest we could find on retirement savings anywhere in the world compared to investments in rental property. KiwiSavers see the long term benefits from cutting KiwiSaver fund tax rates.

When tax removes 54.7% of your retirement nest egg after 40 years of saving compared with only 7.9% on rental property, KiwiSavers know something needs to be done.

Under the current KiwiSaver fund tax rates most New Zealanders earning between the minimum and the average wage cannot afford to save for a comfortable retirement at about 2 times NZ Super, currently $282 for each of a couple after tax.

All political parties need to lay out their plans to make KiwiSaver fund tax rates fairer he concluded.

ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Season Ends: Is Whitebaiting Sustainable?

The whitebait fry - considered a delicacy by many - are the juveniles of five species of galaxiid, four of which are considered threatened or declining. The SMC asked freshwater experts for their views on the sustainability of the whitebait fishery and whether we're doing enough to monitor the five species of galaxiid that make up whitebait. More>>

ALSO:

Crown Accounts: Smaller-Than-Expected Four-Month Deficit

The New Zealand government's accounts recorded a smaller-than-forecast deficit in the first four months of the fiscal year on a higher-than-expected inflow of corporate and goods and services tax. More>>

ALSO:

On For Christmas: KiwiRail Ferries Back In Full Operation After Quake

KiwiRail’s Interislander ferries are back in full operation for the first time since the Kaikoura earthquake, with the railspan that allows rail wagons to be loaded on the Aratere now restored. More>>

ALSO:

Comerce Commission Investigation: Prosecutions Over Steel Mesh Labelling

Steel & Tube Holdings, along with two other companies, will be prosecuted by the Commerce Commission following the regulator's investigation into seismic steel mesh, while Fletcher Building's steel division has been given a warning. More>>

ALSO:

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Women's Affairs: Government Accepts Recommendations On Pay Equity

The Government will update the Equal Pay Act and amend the Employment Relations Act to implement recommendations of the Joint Working Group on Pay Equity. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news