I don’t want this post to be taken as overly critical; it’s just meant to offer some constructive advice. John Armstrong’s piece in the Herald today is good. It’s great to see a senior political commentator acknowledging that politics is a competition of ideologies, rather than merely a game or competition of personalities, but it’s terrifying to see such a lack of either policy knowledge or maths skills from a person in such an important position.
“National’s commitment [to Kiwisaver] has to be questioned.. More so after it was rumbled by the Council of Trade Unions, which found in the fine print that Government contributions would be reduced for those earning between $26,000 and $52,000 and who have been paying 4 per cent of their salary into the scheme.”
That’s wrong on two points:
1) Every Kiwisaver with an income below $52K would lose government contributions, not only those between $26K and $52K.
2) The CTU did not read any fine print. There is no fine print. In fact, National makes no mention of the fact that under National many Kiwisavers would get less money from government contributions than they currently do. But it is obvious to someone who knows the policy and The Standard posted on it two hours after the tax package came out.
Here’s how it works: the Government matches your contributions of 4% of your income Kiwisaver up to $20 a week. That means that a Kiwisaver with an income of $26K ($500 a week) is contributing $20 a week. They and everyone on a higher income (= contributing more) gets the full $20 a week. Everyone below gets 4% of their weekly income (eg. someone with an annual income of $13K, $250 a week, gets $10 a week). National would only match 2% contirubtions. That person on $26K would only be contributing $10 a week and lose $10 a week in matching government contributions. The person on $13K would contribute $5 a week and lose $5. And people on incomes up to $52K would lose out. In the current system, they are getting $20 a week; at 2% they’re contributing less than $20 a week and so lose government contributions. Any Kiwisaver with an income below $52K would lose thousands in over the years (not including the employer contributions they would also lose).
I would have thought professional political commentators would knows how Kiwisaver works and would have picked up on the implications of going from 4% to 2% for government contributions immediately. So, it’s worrying that it’s still news to Armstrong, and presumably other professional political commentators, days after the policy came out. Many government policies have these wrinkles which entail maths at a slightly complicated than every day level and have serious ramifications for Kiwis. Media outlets need to ensure their commentators, or at least their researchers, are able to understand them so that Kiwis get the information they need.