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National’s KiwiSaver cuts double what is reported


09 October 2008

National’s KiwiSaver cuts double what is reported

“Further reading of National’s economic management plan shows alongside National’s plans to cut employer contributions to 2 per cent and abolish the employer tax credit, it will also cut the government contribution (member tax credit) to 2 per cent, leaving many workers earning under $52,000 much worse off.”

“While somebody on an income of over $52,000 would still attract the full current $1,040 government contribution, because National have reduced the minimum contribution rate to 2 per cent, they have also said they will cut the government contribution to this minimum rate also.”

“So a worker on $30,000 a year contributing 4% to KiwiSaver will lose $440 a year from the member tax credits, plus the employer contribution would be reduced to 2 per cent – which sees them losing another $600 a year. These workers would be worse off by $20 a week.”

“In addition, National are misrepresenting the union position on KiwiSaver. Unions did not want a 2+2 option that removes employer tax credits. That will make it much harder to persuade employers to contribute more than 2% and will also mean that some employers will put pressure on workers to fund the employer contribution out of a wage increase.”

“Unions also support a 4 per cent supported option for workers who choose it, and recognise that hundreds of thousands already have, and will be hugely disadvantaged if National implements their changes.”


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