All Kiwis to have a nest egg under Labour

A Labour government will ensure all New Zealanders have a long-term nest egg and help them grow their KiwiSaver pool by an average of $150,000, Labour Leader David Cunliffe says.

“Today I am outlining how Labour’s universal KiwiSaver policy will address New Zealand’s chronically low saving rates.

“Under a Labour government all employees aged between 18 and 65 – with the exception of students, beneficiaries and the self-employed – will be automatically enrolled in KiwiSaver. The opt-out provision will be removed.

“Labour will retain the $1000 kick-start and government contribution of up to $521 a year. We will also increase the employer and employee minimum contribution rates gradually by 0.25 per cent a year over six years; rising from the current 3 per cent each to 4.5 per cent in 2021.

“Labour will use variable KiwiSaver contributions as a way to control inflation rather than just relying on interest rates so people will pay more into their savings rather than in higher mortgage interest rates.

“These changes mean a 30-year-old on an average income of $50,000 who joined KiwiSaver before universality will have over $150,000 or around 40 per cent more in KiwiSaver when they retire. Three-quarters of this increase will come from higher employer contributions and larger returns on investments.

“This process will bring around half a million more New Zealanders into KiwiSaver. Most of those are low income earners who are missing out on getting their fair share of government contributions. These workers will have higher incomes after Labour raises the minimum wage and the ramp up of their employee contribution will be slower.

“Universal KiwiSaver is a no-brainer. It will not only make the lives of all retired Kiwis better, it will increase our savings pool so our companies can access capital to grow their businesses. This means New Zealand will borrow less from offshore and keep our profits in Kiwi hands,” David Cunliffe says.

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