Tracy Watkins reported yesterday that National’s weakening of the employer contribution to Kiwisaver may take a different path to the one we envisaged. Rather than limiting employer contributions to a lower level Watkins reports businesses want to be able to dock or cut wages to compensate for the Kiwisaver contributions they make. This is currently illegal.
Now, an employer is already compensated by a tax credit on the first $20 a week they contribute to a worker’s Kiwisaver and tax deductibility on contributions in excess of that. So, hopefully, National wouldn’t allow wages to be lowered by the whole amount of contributions, only the part not covered by the Government.
So, time for some Notional Party Policy:
– Employers will be allowed to dock wages by the amount they pay into their employee’s Kiwisaver, less Government compensation.
What’s the effect of this? The worker loses out because their wages are lower.
Someone on the average wage would lose $48,000 over a working life, and the benefit would go entirely to businesses, who will no longer have to contribute anything all their â€˜contributions’ being covered by the Government or the worker.
Stories like this stress how important it is for National to come clean on its plans for Kiwisaver. There are hundreds of thousands of Kiwis trying to save for their retirements here, and they deserve some security.