CTU media release
5 May 2011
Is Government committed to KiwiSaver or Not?
The CTU believes the Government has to clarify its commitment to KiwiSaver. Previously this Government cut the level of matching employer contributions and government subsidy from 4 percent back to 2 percent and now there is an implied threat that the Budget will cut the scheme even further.
CTU Economist Bill Rosenberg said that the member tax credit is a vital part of the scheme which has encouraged people to put their savings into Kiwisaver.
The CTU policy on workplace superannuation is to phase in a compulsory 6 percent employer contribution over four years, with a compulsory 2 percent employee contribution and 2 percent government contribution at that point. There should also be government contributions for people who are out of the workforce for extended periods, such as parents looking after children, who are currently disadvantaged in their retirement saving.
The Government last year gave $14.3 billion worth of tax cuts over four years mainly to those on high incomes and now it appears poised to cut the level of support to help New Zealanders save. “These are wrong priorities which have created a structural problem for balancing the government’s books, while sending a poor message about people’s savings habits.”