17 May 2007
Budget 2007: Making the Kiwi Fly
“The Budget enhancements to Kiwisaver will ensure it is a flying success,” CTU president Ross Wilson said today.
“The introduction of a 4% employer contribution to workplace savings over the next 4 years means New Zealand workers can start to catch up with their Australian colleagues where a 9% employer contribution is required.”
“And the $20 direct credit from the Government to workers for their savings makes it really worthwhile for workers to sign up to KiwiSaver and employer schemes.”
“This establishes a robust second tier for superannuation in addition to the entitlement to NZ Superannuation payments. “
“It is a huge boost for the income levels of workers in retirement.”
“The CTU will be working hard to promote collective bargaining so that wages are lifted for low income workers to make it easier for them to save. Although there are very significant incentives now with KiwiSaver, that is not much help if a worker cannot afford to start saving.”
“For state sector workers, the Budget will not improve or expand the new state sector savings scheme but government employers will be making employer contributions for KiwiSaver in line with the Budget announcements.”
“Employers should welcome the Kiwisaver enhancements as the Government is using a tax credit to fund most of the employer contribution, in addition to the 3% reduction in the headline tax rate also announced today,” Ross Wilson said.