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:

Mt Eden Prison: Serco Inquiry Extended

A two month delay to the Government investigation into prison fight clubs shows the extent of problems within the Serco circus, says Labour’s Corrections spokesperson Kelvin Davis. More>>

ALSO:

Health And Safety: Late Addition Of National Security Provisions A Concern

The New Zealand Law Society has expressed its significant concerns at the last-minute addition to the Health and Safety Reform Bill of provisions for a closed material procedure for court proceedings where national security is involved. More>>

ALSO:

Rugby And Beer: World Cup Alcohol Bill Passes

ACT MP David Seymour’s Sale and Supply of Alcohol (Extended licensing hours during Rugby World Cup) Bill completed its third reading by 99 to 21... More>>

ALSO:

Gordon Campbell: On The Flag Campaign

So far, the public has treated the government’s flag campaign with something between disinterest and disdain. Most New Zealanders have instinctively seen through the marketing hype involved. More>>

Change For 2017: Local Govt To Decide On Easter Sunday Trading

The Government is to enable local communities, through councils, to decide whether retailers can open on Easter Sunday, Workplace Relations and Safety Minister Michael Woodhouse announced. More>>

ALSO:

(And Targets Worse Than Australia's): Foresters Abandoning Emissions Trading Scheme

The Government’s gutting of the Emissions Trading Scheme has caused foresters to leave and emissions to rise, says Labour’s Climate Change spokesperson Megan Woods. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news