CTU MEDIA RELEASE

08 October 2008

Axing KiwiSaver to pay for tax cuts is not a serious economic plan

“The National Party tax policy does nothing to address New Zealand’s low wage problem and significantly discourages long term savings. Axing KiwiSaver to pay for tax cuts is not a serious economic plan,” CTU Economist Peter Conway said.

“The National Party proposes to take money out of research and development, slash the popular KiwiSaver scheme, and exclude hundreds of thousands of families from their plan in order to deliver another $10 a week next year.”

“And it is hard to believe that the National party would take an axe to KiwiSaver when as a country we need to lift savings.”

“The real issue for workers is how to lift wages. This policy does not commit to lift the minimum wage or improve wage bargaining opportunities.”

“The language of their announcement is pitched at those on the average wage. But over two-thirds of workers earn less than this.”

“We have supported 2+2 arrangements as a starting point but under the current scheme, this attracts the full value of member tax credits and employer tax credits. Under the National Party proposal there would be enormous pressure on workers to pay for the employer contribution by forgoing a wage increase. And for those who joined expecting a 4 per cent employer contribution, this is a major reduction.”

“John Key’s language around belt tightening in the public service will also send a chill down the spine of every public servant in the country. National gutted public services in the 1990s, and they look set to do so again.”

ENDS

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