National’s refusal to say what it stands for is becoming so ridiculous we have resorted to the Cold War art of Kremlinology. Today, we look at Kiwisaver.
National has had a tortured relationship with Kiwisaver. When it was first introduced in 2005 John Key described it as a “terribly designed system” and spent the next year deriding the scheme as a “glorified Christmas Club” that “won’t work” because it is “fundamentally flawed.”
By the time Michael Cullen released Kiwisaver Mark II in last year’s Budget Key had changed his tune, attacking the new turbo-charged version but describing the old version with fondness: “we think, um, the first mark I version of it worked very, you know, was probably gonna be successful and not too bad.”
Then came the unedifying spectacle of Bill English at the Kiwisaver conference in March refusing to give National’s policy on the scheme. In a media scrum afterwards, he let slip that National would keep the Government matching contributions but refused to comment on the employer contributions.
National does not like Kiwisaver and the employer contributions in particular. So, it was plausible when National’s employment spokesperson, Kate Wilkinson, said National was against compulsory employer contributions. But that was quickly retracted by Key (and we learned National spokespeople are not involved in policy development in their portfolios) to be replaced by a slightly less empty void: National would keep compulsory employer contributions in a “pretty similar” form.
The conclusion must be that National is planning to weaken the employer contribution, probably by stopping contributions at 2% from April next year, rather than growing them to 4% by 2011. This will not save the Government anything, it will still be covering $20 a week of employer of contributions but it will mean that for employees earning less than $52,000 a year employers will pay nothing. Kiwisavers’ nest eggs will be smaller but businesses will get away with contributing nothing.