Bill English MP
National Party Finance Spokesman

8 October 2008

Economic plan: Enduring, affordable KiwiSaver

National Party Finance spokesman Bill English says changes announced to the KiwiSaver scheme are designed to ensure it is fair and affordable for New Zealand now and in the years ahead.

“National’s KiwiSaver package strikes the right balance between savings and supporting economic activity in today’s environment.

“National will ensure that KiwiSaver is accessible, and contains incentives, to enrol and retain as many New Zealanders as possible.

“The bulk of the scheme will therefore remain unchanged.

“Under National, KiwiSaver members will keep their current KiwiSaver entitlements.

“New Zealanders who join KiwiSaver in the future will continue to receive significant contributions from the government and matching contributions from their employers.

“Beyond these assurances, National is planning three changes to KiwiSaver.”

National will.

1. Reduce the minimum contributions demanded of employees. From April next year, the minimum contribution rate for employees in KiwiSaver will be 2% of gross salary. Employers will also be required to make minimum contributions of 2% of gross salary, for each of their employees who are KiwiSaver members.

2. Discontinue the tax credit that is currently paid to employers whose staff are enrolled in KiwiSaver.

3. Repeal recent legislation which effectively discriminates against some employees who can’t afford to join KiwiSaver.

“These three changes are needed to ensure KiwiSaver is fair and affordable for New Zealand workers, employers, and taxpayers, and that it endures.

“The super-sized KiwiSaver scheme Michael Cullen announced in 2007 is unsuited to the economic conditions New Zealanders currently find themselves in.

“It sets the hurdle for entry to KiwiSaver too high in tougher times.”

ENDS

Kiwisaver_Policy_Paper.pdf

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