21 May 2015

Axing Kiwisaver Kick Start Payment a Terrible Signal

Financial Services Council (FSC) Reaction to Dropping Kiwisaver $1000 Kick Start Incentive

This is a terrible signal for younger New Zealanders starting out saving for the first home and a comfortable retirement using Kiwisaver against the background of an aging population.

This is how the FSC CEO Peter Neilson reacted to the abolition of the $1000 Kiwisaver kick start payment costing $500m over the next four years to help the Government deliver a wafer thin surplus for 2015/2016.

This is like a parent raiding their own child’s piggy bank to pay for a round of drinks already promised down at the pub.

Raiding the piggy banks of the next generation is not the smartest move when the population is ageing. It is a pity, that the Government’s failure to manage its own finances, will hold back some younger New Zealander’s from better managing their own future finances.

The Government in an earlier budget had already cut back on the Government’s top up payment that incentivises Kiwisavers to save more. The savings from this move would have been better applied to reducing the bias against Kiwisaver investments compared to the treatment for rental property.

FSC is the industry body for Kiwisaver providers and personal insurance providers.

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