Kiwisaver private unemployment insurance

Press Release Wellington People's Centre

4 June 2007

Whilst the government promotes its Kiwisaver scheme to the young as a scheme to save for their retirement, they omit to advise New Zealander's of the schemes real intent.

We all know that Kiwisaver is to provide for our retirement and to help us into our first home, but how many people have read the clause that means people can call on Kiwisaver when they are in financial hardship due to unemployment or sickness?

Kay Brereton from the Wellington People's Centre warns that Kiwisaver is really about privatising the welfare system. We are being told to save for our retirement because there may not be a national superannuation scheme in the future, but many people may not have kiwisaver funds at retirement either.

The new purpose that the amendment bill will insert into the Social Security Act requires people to call upon their own resources before calling on the welfare system; Kiwisaver will be one of these resources.

What this will mean is that each time a person who has opted into Kiwisaver loses their job or becomes sick they will have to call on their Kiwisaver fund before qualifying for a benefit. The combination of this calling on the funds and the fact that Kiwisaver is not Government guaranteed, means a lot of New Zealanders will still have nothing at retirement as well as having less during their working lives.

Saving for a rainy day is all well and good, but the government has a responsibility to be transparent about its true intent. This is, at best, a move away from universal Superannuation, to income and asset tested superannuation; but actually goes beyond this, to private welfare insurance.

Attractive as this scheme may be, packaged with tax breaks and Government contributions; it is really another hit by the Labour Government on welfare provision for the disadvantaged and vulnerable.

ENDS

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