Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


KiwiSaver contributions to increase from 1 April

Hon Bill English
Minister of Finance

Hon Peter Dunne
Minister of Revenue

27 March 2013

KiwiSaver contributions to increase from 1 April

Two important changes to increase KiwiSaver contributions take effect from 1 April, which will help to encourage a higher level of private savings among New Zealanders, Finance Minister Bill English and Revenue Minister Peter Dunne say.

From next Monday, the minimum employee contribution rate will rise from 2 per cent to 3 per cent. At the same time, compulsory employer contributions will also rise from 2 per cent to 3 per cent.

“They were among a number of changes announced in Budget 2011 to encourage higher levels of private savings, to make the KiwiSaver scheme more financially sustainable and to build a larger pool of local capital,” Mr English says.

“At the same time, they will reduce the need for the Government to borrow money to invest in KiwiSaver.”

Those Budget 2011 measures also included:

• Maintaining the $1,000 kick-start payment when new members join KiwiSaver.

• From 1 April 2012, removing the tax-free status of employer contributions, which from that date were taxed at the employee’s marginal tax rate.

• For the year to 30 June 2013 and beyond, the KiwiSaver member tax credit rate was halved from $1 to 50c for every dollar contributed by members, up to $521 a year.

“New Zealanders are already starting to save more and these KiwiSaver changes are expected to help raise national savings further,” Mr English says. “They will also reduce the amount the Government is borrowing, largely from overseas investors, to fund private savings.”

KiwiSaver membership and total funds invested continue to grow strongly.

Almost 2.1 million New Zealanders have accumulated $15.4 billion in KiwiSaver funds. They are forecast to grow further to around $25 billion by 2015, and to almost $60 billion by 2021.

Mr Dunne says the changes will ensure that KiwiSaver remains an attractive savings option that is financially sustainable into the future.

“KiwiSaver continues to be a popular savings options for a growing number of New Zealanders,” he says. “It is part of the Government’s wider programme to encourage genuine savings and reduce the need for extra government borrowing and debt.

“We believe that most people will find 3 per cent contributions affordable, and the employer contributions will continue to offer an attractive rate of return for the money employees put in themselves.

“We felt it was important to give workers and employers two years to plan for the increased contribution rates.”

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

PARLIAMENT TODAY:

Gordon Campbell: On D-Day For Dairy At The TPP

While New Zealand may feel flattered at being called “the Saudi Arabia of milk” it would be more accurate to regard us as the suicide bombers of free trade. More>>

ALSO:

Leaked Letter: Severe Restrictions on State Owned Enterprises

Even an SOE that exists to fulfil a public function neglected by the market or which is a natural monopoly would nevertheless be forced to act "on the basis of commercial considerations" and would be prohibited from discriminating in favour of local businesses in purchases and sales. Foreign companies would be given standing to sue SOEs in domestic courts for perceived departures from the strictures of the TPP... More>>

ALSO:

"Gutted" Safety Bill: Time To Listen To Workplace Victims’ Families

Labour has listened to the families of whose loved ones have been killed at work and calls on other political parties to back its proposals to make workplaces safer and prevent unnecessary deaths on the job. More>>

ALSO:

Regulators: Govt To ‘Crowd-Source’ Regulatory Advice

A wide-ranging set of reforms is to be implemented to shake up the way New Zealand government agencies develop, write and implement regulations. More>>

ALSO:

Board Appointments: Some Minister Appoint Less The 3 In 10 Women

“It’s 2015 not 1915: Ministers who appoint less than 3 in 10 women to their boards must do better, they have no excuse but to do better,” said Dr Blue. More>>

Gordon Campbell: On The 1990s Retro Proposals For Our Health System

As we learned yesterday, the reviews propose that the democratically elected representation on DHBs should be reduced, such that community wishes will be able to be over-ridden by political appointees. In today’s revelations, the reviews also propose a return to the destructive competitive health model of the 1990s. More>>

ALSO:

Post-Cab Press Conference: Foreign Buyers Register, TPP And Serco

At a press conference today in Wellington, John Key discussed the foreign buyers register as well as the TPP and Serco. Key was questioned on whether a stamp tax might be used as a tool to deal with foreign buyers. More>>

ALSO:

Lyndon Hood Satire: Serco To Outsource Prison To Public Sector

In response to high-profile failings, multinational omnicorporation Serco will introduce public management in its prison system. Serco's New Zealand manager, speaking on condition of anonymity, has announced plans for managers from the Department of Corrections to run the Mt Eden Correctional Facility. More>>

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news