Survey Supports NZ Institute’s Savings Proposals
11 May 2005
Survey Reveals Strong & Broad-based Support for the New Zealand Institute’s Savings Proposals
One month ago, the New Zealand Institute released a report proposing policy solutions designed to lift New Zealand’s national savings and to assist many more New Zealanders to build an asset ownership stake.
The report proposed the creation of individual savings accounts – ‘Kiwi Savings Accounts’ – for all New Zealanders. These proposals include the creation of endowed individual savings accounts for all New Zealanders at birth, a 2% across the board personal tax cut to finance these individual accounts – enabling people to save without cutting into current consumption, as well as a matched savings scheme in which the government will match the first $1000 of voluntary savings. Withdrawals can be made to finance tertiary education costs, a first home deposit, and retirement.
These proposals have been the subject of considerable public discussion and debate, with a particular focus on the immediate political reaction.
But to find out what New Zealanders thought about these proposals, the New Zealand Institute commissioned UMR Research to ask a representative sample of 750 New Zealanders a series of questions about our proposals.
Dr David Skilling, chief executive of the New Zealand Institute, notes that “the survey results clearly reveal strong and broad-based support for policy initiatives to raise savings and asset ownership in general – and for the Institute’s proposed policy solutions in particular”.
The survey found that 64% of people support policies to encourage savings – including 40% of people who strongly support policies to encourage savings – while only 15% of people oppose such policies. A further 20% of people are neutral. These results show that there is a substantial public appetite for policies that promote savings and asset ownership.
And there is strong support for the New Zealand Institute’s specific proposals. 61% of people support or strongly support the Kiwi Savings Account proposal, with a further 21% neutral, while just 17% of people oppose the Institute’s proposed policy solutions.
Support was consistently strong across the three elements of the proposal; the kids’ savings account, the 2% tax cut, and the matched savings proposals. For each of these elements, roughly two thirds of respondents supported or strongly supported the proposal – with less than 20% of people opposing the proposals.
The kids’ savings accounts proposal received slightly more support than the other proposals, although the difference in support is not statistically significant.
And when we asked people to select their most preferred element of the proposal, people were evenly split with about a third of respondents favouring each of the kids’ savings account, the tax cuts, and the matched savings schemes. There was no clear favourite element, with different elements of the proposal appealing to different people.
There was also very strong support for the proposed withdrawal criteria from these accounts. 75% of people support the idea of withdrawing for the costs of education or repaying a student loan, and 83% support withdrawing for a deposit on a first home. This overwhelming support suggests that people welcome policies that address the substantial challenges around student loan debt and first home ownership.
Much of the immediate political reaction to the Institute’s proposals focused on the fiscal cost (estimated to be over $3 billion a year). But the cost is much less of an issue for the survey respondents. 56% of people continued to support or strongly support the Institute’s proposals even with information on the expected fiscal cost, a further 23% were neutral, and only 19% opposed the proposals. The fact that opposition increased only slightly suggests that many New Zealanders think that the proposed fiscal commitment is a worthwhile investment.
The support for the New Zealand Institute’s proposals is broad-based, and is consistently strong across geographic areas, incomes, and the political spectrum. There is strong support for these savings policies from both the left and the right – just as is the case internationally, with political parties of both the left and the right championing the creation of an ownership society.
So overall, about two thirds of New Zealanders support or strongly support the Institute’s proposals, with less than 20% opposing the proposals. And there is a broad-based constituency for bold policies that promote savings and asset ownership.
Dr Skilling said that he was greatly encouraged by these survey results. “Far from savings policy being politically risky, these results strongly suggest that there is considerable public support for policies to promote savings and asset ownership – and with the New Zealand Institute’s proposals in particular. The clear message to take from these results is that politicians ought to take advantage of the current window of opportunity with a healthy economy and a strong fiscal position and take bold action to promote savings and asset ownership”.
Note to editors:
This survey of 750 people aged 18 and over was conducted between April 28 and May 2. The survey results have a margin of error of +/-3.6%. A summary of the survey results is attached, and more detailed results are available on request.
The report detailing the proposed policy solutions is available from www.nzinstitute.org
For information please contact:
Karine Fox, Communications Director, the New Zealand Institute, Ph: (09) 309 6230, Mob: (021) 185 0691, Email: email@example.com, Web site: www.nzinstitute.org