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 Anne Tolley’s
Callous Folly

Years ago, I remember someone in the Heath Ministry telling me off the record that regulatory oversight in this country largely consisted in ‘waiting for something to turn green or fall off somebody’ before the authorities would swing into action...

Last week’s conflict between Social Development Minister Anne Tolley and District Court judge Carolyn Henwood illustrated quite a few of the flaws in the system. More>>

 

Members’ Bills: Greens' Domestic Violence And Loans Bills Pulled From Ballot

Jan Logie’s Domestic Violence-Victims' Protection Bill introduces workplace protections for victims of domestic violence, including allowing victims to request paid domestic violence leave for up to 10 days... Gareth Hughes’ Bill allows Kiwis with student loans to defer their student loan repayments into a first home savings scheme. More>>

ALSO:

IPCA: Police Did Not 'Deliberately' Use Pepper Spray On 10-Year-Old

"When spraying the man, the officer did not properly consider the necessity of using pepper spray in a confined space, the likelihood that it would affect the other innocent passengers or the fact that he was using a more powerful spray." More>>

ALSO:

Donor Bill Passes: Full Income Compensation For Live Organ Donors

Unanimous cross-party support for the Compensation for Live Organ Donors Bill represents a critical step in reducing the burgeoning waiting list for kidney donations, according to Kidney Health New Zealand chief executive Max Reid. More>>

ALSO:

Earthquake Response: Emergency Legislation Prepared

Three new Bills have been drafted in the wake of the magnitude 7.8 earthquake on November 14 to ensure the government can enable affected communities to respond quickly and efficiently. More>>

ALSO:

Housing MPs: New Building(s) For Parliament

A new building will be erected on Parliament grounds to house Members of Parliament and their staff who currently work in leased accommodation in Bowen House. The plan has cross-Party support, apart from NZ First, said Parliament’s Speaker, Rt Hon David Carter. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news