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Kiwisaver breaks half a million

Written By: - Date published: 4:37 pm, March 25th, 2008 - 17 comments
Categories: election 2008, wages - Tags: ,

Congratulations to Kiwisaver’s 500,000th member, baby Remy Van Cruysen, whose parents, Jules and Megan, signed him up today. By the time Remy is an adult he will have a nest-egg worth $49,000 in today’s money.

Kiwisaver has been enormously popular. People have signed up at twice the expected rate 500,000 have joined in less than eight months, Treasury projected only 270,000 for the while first year. The combination of contributions from members and the Government have already seen the savings in Kiwisaver accounts top $1 billion, and that will accelerate as people continue to join up and employer contributions kick in from April 1.

The only fly in the ointment is that National still refuses to tell us whether they would change Kiwisavers’ rules. National has said it would keep the scheme but is mute on whether it would retain employer contributions and the current level of government contributions. These are vital parts of Kiwisaver’s attraction and people need to know whether they will continue when planning for their retirement.

With one in six working age New Zealanders already Kiwisavers and more joining every day, it is time for National to grow up and stop playing political games with kiwis’ futures.

17 comments on “Kiwisaver breaks half a million ”

  1. higherstandard 1

    sp

    I think you can assme that the nat’s won’t tinker with Kiwisaver. You might even be surprised that Key said in a recent interview that of the current Labour Caucus that he thought Michael Cullen would probably be remembered most positively in a hitorical perspective because of Kiwisaver.

  2. Dan 2

    The lack of any policies from the Nats speaks volumes. NZers deserve an opposition. The National party have had nine years in opposition, yet have no clear point of difference on anything! In other words, Labour leads the way, and the Nats follow.
    The only question mark are their unspoken agendas, and they will show as we near election day.
    Well done Michael Cullen. You have transformed savings perceptions.

  3. Draco TB 3

    In other words, Labour leads the way, and the Nats follow.

    That’s been true ever since WWII. National has put in place very few policies in relation to Labour and quite often they’ve been disastrous rather than beneficial. National is the arch-conservative party – it keeps what’s working and doesn’t like to change things.

  4. Up next on National TV we continue the series of DOG WISTLE POLITICS!!!

  5. Phil 5

    Draco, you’re forgetting the Fiscal Responsibility Act, probably the single most important piece of legislation (of a budgetary nature) in New Zealands history.

  6. John 6

    Hey Higher

    What evidence do you have that the Nats won’t make any changes to Kiwisaver? They certainly haven’t made any statements to that effect. In fact, when pushed they have been pretty cagey in their responses.

    Slippery John saying nice things about Michael Cullen is not a guarantee of the continuation of the $1,000 initial government contribution or the employer contribution or the tax aspects of the Kiwisaver plan.

    Nice words without a clear policy leaves a lot of wiggle room for Slippery John and his buddies.

  7. Murray 7

    I joined Kiwisaver for one reason and one reason only, free money.
    Accepting it makes me feel like a Labour supporter but I’ll get over it.

  8. All Tory voters should on principle refuse to accept the Government KiwiSaver handout. Or have they no morals?
    Personally, I won’t join up soon. I simply can’t afford it what with rising mortgages and CPI inflation, and having to pay for other people’s lifestyles such as Working For Families. Somebody has to pay those bills and unfortunately, it’s me.

  9. lprent 9

    “…the Fiscal Responsibility Act, probably the single most important piece of legislation (of a budgetary nature) in New Zealands history.”

    I’d agree. One of the most effective acts in the last 30 years (in terms of impact) because it shifted the underlying basis of government accounting towards an accrual accounting base.

    It is a pity that political parties are not required to cost their policies on the same basis.

  10. Vic 10

    Uroskin, are you actually saving for retirement like a good Tory would? It’s not like we’ve got full Super to fall back on these days. Sounds almost like you’re refusing to on principle, but then you say you can’t afford it. Even if you could have it both ways, NZ’s fiscal and economic policies and our economy are obviously going to change quite a bit before you draw on any savings – maybe you should reprioritise to give yourself the flexibility to save now, given that all the factors you’ve mentioned are likely to fluctuate over your lifetime? It’s free money. Why cut off your nose?

  11. Hey Steve
    It’s great to see some genuinely positive coverage of what was supposed to be a positive thing. I am saddened by how cynical the media coverage of the event was. As a parent I want Remy to be in a better position I was and thats why we are doing it. It wasn’t about trying to get free money from the government or even a shameless Labour publicity stunt (as is often inferred by the comments about my politics – of course I am a Labour supporter – if I wasn’t why would I show up to a photo shoot with the PM). Anyway, Thank you!

  12. Uroskin 12

    Vic: Yes, I joined a private super savings scheme about 10 years ago – when it didn’t attract Government subsidy or a tax deduction – but had to stop contributing as other spending started to take priority, such as paying an amazing 5% real interest rate on my mortgage (interest rate minus inflation rate) this must be about the highest rate in the world!
    If only the Government would reward my earlier frugality and foresight by making past private pension contributions eligible for the Kiwisaver handouts, but I’m not holding my breath.
    besides paying off your mortgage should be your first priority, we don’t all want to be renters, sub-prime defaulters or be forced into a mortgagee sale.

  13. Steve Pierson 13

    Cheers, Jules.

    I listened to the whole recording on scoop and thought it was great – both Clark and Cullen seemed to be having a good time, and it’s a shame we don’t see more of them in that relaxed context.

    Yeah, and annoying how they make a big deal over you being a former member of Labour, especially as your partner isn’t. Not like you’re party activists, and as Cullen pointed out, Remy is just one of 500,000 New Zealanders who have joined – can’t all be Labour members.

  14. Vic 14

    Well – yeah. I haven’t even got to the point of having a deposit to put on a house. I’m going the Kiwisaver route on this and hoping I find a moderate earner to shack up with later cause there’s no way I could do a mortgauge alone, now or probably ever. Are you saying though, that you wish the government would be more generous in its allocation of cash and add in a bit of retrospective funding for private schemes? Are you sure you’re not harbouring a bit of lefty predisposition in there somewhere?

  15. Uroskin 15

    Vic: I just wish there was a level-playing field in tax treatments of savings and investments. I mean, why do I have to pay tax on my private pension plan and any other saving accounts while the Government gives KiwiSaver subsidies? Saving through paying off your house is more tax effective in many cases (compared to other savings mechanisms) as there is no capital gains tax, and rental investments are basically tax subsidised vehicles for the middle classes since any “losses” are tax-deductible, but renting people can’t claim their rent payments against their tax.
    I’d be quite happy if part of my current tax was ring-fenced in a personal pension plan instead of having to fork out another 4 or 8% of my gross income (despite the Government bribe). If the aim was to encourage saving more there should be more imaginative schemes. As it is now Kiwisaver is a taxpayer subsidy to people without mortgages, jobs or a life.

  16. Steve Pierson 16

    uroskin. to get the govt subsidies etc, super plans have to meet a set of criteria, the one I can remember straight off is no withdrawals (except the mortgage exception) until 65. If your plan converts itself to a Kiwisaver approved plan it will get the rewards.

  17. Matthew Pilott 17

    uroskin, are you saying that contributing 4% of your income will deny anyone a life? I thought it was a mortgage that did that, not kiwisaver..

    Actually, your last comment makes no sense at all – people with mortgages maybe, but I can’t see it as a subsidy for people without jobs – they’re usually more concerned with getting a job than saving for a retirement you know…

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