Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

Increase KiwiSaver rates, but not this way – academic

Increase KiwiSaver rates, but not this way – academic


A Massey University KiwiSaver expert believes Labour’s proposal to introduce a variable contribution rate to compulsory KiwiSaver will have negative impacts for small businesses and those on low incomes.

Dr Claire Matthews says she “would love to see KiwiSaver rates increase – but not this way”.

“The spectre of the government meddling with KiwiSaver is not welcome,” she says. “It’s the realisation of the fears of many Kiwis, especially those who have not signed up to the scheme.

“Using KiwiSaver as a form of monetary policy is really straying away from the purpose for which it was created.”

Dr Matthews also warns that compliance costs related to constantly changing contribution rates will be particularly onerous for small businesses.

“Each time the KiwiSaver contribution rate changes, businesses will need to update their payroll systems to deduct the appropriate amount requiring additional, non-productive compliance activities.”

She also says there will be a disproportionate impact on people on low incomes and those trying to save.

“Even five dollars per week can be a significant sum for someone on a low income. And, as usual, the focus is on achieving lower rates for mortgage holders with no thought given to those with bank deposits earning lower interest income. I also question David Parker’s claim that lower interest rates would mean lower credit card rates. Credit card interest rates tend to be very inelastic.”

Meanwhile, Dr Matthews says, those on higher incomes are likely to be contributing more to their KiwiSaver plans than the minimum. “For these people, an increase in the minimum contribution rate will have no effect, thus diluting the impact of the policy on the wider economy.”

Dr Matthews also sees complications arising from tying up retirement savings and monetary policy.

“Although increasing the contribution rate to KiwiSaver is desirable, like any other change to the KiwiSaver scheme it should be done for reasons related to retirement income policies.

“While not wanting to discuss the wider issues associated with Labour’s policy on monetary policy, there has to be concern over giving multiple goals to the Reserve Bank, especially when there is potential for competing goals.”

Ends

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Fallout From The Barclay Tape

This is hardly a case of cleaning out your desk and being turfed out onto the pavement.

As others have pointed out, the disgraced Clutha-Southland MP will remain on the public payroll for three months until the election, and for three months afterwards. More>>

 

Ombudsman: Canterbury Schools Reorganisation Mishandled

An investigation into the Canterbury schools reorganisation after the February 2011 earthquakes has found significant gaps and flaws in the Ministry’s engagement and communications with schools and communities. More>>

ALSO:

Law Commission: Contempt Report "Protects Right To Fair Trial"

The proposed Act limits what news media representatives and bloggers can report on court proceedings, but it also makes clearer than the current law where the line is between contempt and freedom of expression. More>>

ALSO:

Gordon Campbell: On Our Refugee Intake (And Uber’s Woes)

On figures released this week, there are currently 65.6 million people worldwide who have been displaced from their homes by war, famine or other external causes… More>>

ALSO:

IGIS Report: GCSB Support For Groser WTO Bid Not Illegal

“The inquiry has found that the GCSB did not act unlawfully or improperly in providing assistance to the New Zealand government campaign”, Ms Gwyn said. More>>

ALSO:

PM's Press Conference: Pike And Houses

There were questions on Pike River mine re-entry after new video from inside the drift was released over the weekend. English maintained a human effort would not be feasible irrespective of any future coalition demands from NZ First. He said the government would continue to work with families on non-manned re-entry. More>>

ALSO:

Flogging A Dead Horse: NZ First Seeks New s59 Referendum

10 years on from the so called “anti-smacking” law - NZ First calls for a binding referendum. NZ First MP Tracey Martin told TVNZ’s Q+A programme that the law change has had a “chilling effect” on NZ parents including herself. More>>

ALSO:

Always Interesting: Internet Party Has New Leader

The Internet Party has a new leader: Suzie Dawson... She currently resides in Moscow, Russia, where she has applied for temporary asylum due to severe persecution she reports being subjected to by those whose corruption she worked to expose.More>>

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages

Opening the Election
 
 
 
  • PublicAddress
  • Pundit
  • Kiwiblog