May 29, 2008
Nats’ Kiwisaver policy could cost average worker $190k - EPMU
Policy that allowed business to take Kiwisaver contributions from wages could cost the average worker $190,000 in wages and lost interest over their working life says the Engineering, Printing and Manufacturing Union.
The warning comes after revelations in today’s Dominion Post that employer lobby groups are pushing National to adopt just such a policy.
EPMU national secretary Andrew Little says such a change to Kiwisaver would put Kiwi workers even further behind their Australian counterparts.
“For months National has been complaining about the wage gap with Australia and business has been complaining about skills shortages but if they think the answer is to take workers’ super payments out of their wages then they are kidding themselves.
“Australian workers get a nine percent employer contribution on their super as well as getting higher wages and yet employer representatives here are balking at a gradually introduced four percent contribution even though they get a tax credit for it. That kind of arrogance would be funny if it wasn’t such a deliberate attack on ordinary working New Zealanders.
“If an average worker has their employer contribution deducted from their wages they’ll be left a hundred and ninety thousand dollars out of pocket at the end of their working life. Business reps might not think that’s a lot but to most New Zealanders it’s serious money.
“National needs to come clean on its plans for Kiwisaver right now because too many Kiwis have too much at stake to be left in the dark over this.”
The EPMU has campaigned politically and industrially for employer contributions to Kiwisaver since the scheme was introduced.
The graph below shows income and interest for the average worker ($45,000 per annum) of Kiwisaver contributions at 1%, 2% and 4% provided across a 40 year projected working life and based on an annual real return of 3% interest and average real wage rises of 2% per annum.