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

 

PARLIAMENT TODAY:

Royals: The Prince Of Wales And Duchess Of Cornwall To Visit

Prime Minister John Key welcomes today’s announcement that the Prince of Wales and The Duchess of Cornwall will visit New Zealand in November. This will be the second joint visit for Their Royal Highnesses to New Zealand. More>>

ALSO:

Tracey Martin Replaced: Ron Mark Is New New Zealand First Deputy Leader

Clayton Mitchell was the successful candidate for the Associate Whip position. Winston Peters was re-elected as Leader by the Caucus. Ron Mark was elected as the Deputy Leader with effect from 10am, Friday, 3rd July. More>>

ALSO:

Rebuild Rebrand: "Regenerate Christchurch" To Replace CERA

The regeneration of Christchurch will be the city’s focus for the next five years as local leadership progressively takes control of the rebuild, Canterbury Earthquake Recovery Minister Gerry Brownlee says. More>>

ALSO:

Nauru: Scholars Urge Minister To Act On Deteriorating Democracy

“Since the 2013 election in Nauru, there has been a series of disturbing developments on the islands that indicate a severe deterioration in the state of its parliamentary democracy and in the rule of law,” say the scholars. More>>

ALSO:

Foreign Affairs: NZ Begins Presidency Of UN Security Council

Prime Minister John Key has welcomed the start of New Zealand’s month-long Presidency of the United Nations Security Council in New York. More>>

ALSO:

Labour: Cash For Charter Schools, Mould For State Schools

“Recently released financial statements show the Whangarei charter school He Puna Marama received $3.9 million in government funding to the end of last year. Yet their audited accounts show they only spent $1.4 million on education, leaving almost $2.5 million over two years unaccounted for." More>>

ALSO:

Kiwirail Plans Shift From Electric: National Urged Not To Take Backwards Step

The National Government shouldn’t drag New Zealand backwards by replacing its climate friendly electric trains with carbon-polluting diesel trains, the Green Party said today. More>>

ALSO:

Capital Connection:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news