08 December 2008
CTU welcomes softening of KiwiSaver stance by government
The Council of Trade Unions says that the Government’s consideration of changes to their KiwiSaver stance will soften the blow for low income workers, but fundamental problems still remain.
John Key said today that Cabinet have considered changes to National’s KiwiSaver policy, and the CTU looks forward to seeing further details.
“The CTU raised the whole issue of KiwiSaver with the Government post-election,” CTU Economist Peter Conway said. “In particular we focussed on the disadvantage to low income workers who would get a cut in member tax credits whereas workers over $52,000 contributing at 4% would still be getting at least $20 a week tax credit.”
“The Prime Minister advised us that they were prepared to have another look at that issue and had already identified it as a possible anomaly.”
“The CTU has always supported a 2+2 option but not on the basis of removing the requirement for employers to match up to 4 per cent and the removal of employer tax credits.”
“The CTU has raised many other points of concern about KiwiSaver including the damaging impact on low income workers of the removal of employer tax credits which effectively subsidised employer contributions. This made it less likely that the employer would attempt to offset their KiwiSaver contributions against a wage increase.”
The CTU has commissioned actuarial advice that shows that under the National Party KiwiSaver policy pre-election a 30 year old on $50,000 today would save by age 65 years $199,099 under National Party proposals compared with $341,550 under the current KiwiSaver scheme, Peter Conway said.