The Standard line: Kiwisaver

Steve Pierson
16 years ago
Categories: economy, election 2008, kiwisaver, national, tax, The Standard line

So, you’re talking with someone about politics and they say something really dumb and wrong and you know it’s wrong but you don’t have the arguments and facts at your fingertips to make a decisive point. That’s where our election series, The Standard line, comes in. The info you need in bite-size form. Today: Kiwisaver

Points

-National says 4% is too much to save and more people would join their 2% scheme but sign-up to Kiwsaver at 4% savings has been twice what was expected, 830,000, and people on middle incomes, $20,000-$40,000, are actually over-represented among Kiwisavers.

-The huge numbers of Kiwisavers is not just the rich signing up their kids. 55% of Kiwisavers only have income from wages or salary. Another 31% earn part of their income from wages and salary.

– Under National’s plan, Kiwisavers would lose 2-4% of their gross income in lost contributions from their employer and the Government.

– Every Kiwisaver, no matter their income, would lose more money from lost Kiwisaver contributions than they would get from larger tax cuts from National.

-A typical family on an income of $65,000 with both parents in Kiwisaver stands to lose $50 a week from National’s tax and Kiwisaver policy.

– National’s plan would halve the size of your Kiwisaver nestegg. It adds up to hundreds of thousands of dollars for young people.

– The money National would save by slashing Kiwisaver would be spent on giving tax cuts for the rich. Slashing Kiwisaver would save $3 billion, National’s tax cut plan would cost about $4 billion more than Labour’s, about half that money would go to people on incomes over $80,000. That constitutes a big shift in wealth from ordinary Kiwis to the rich.

– As a country, we need to save more, otherwise we have to borrow from overseas to grow our economy. So, far Kiwisaver has created a $1 billion savings pool, and that is growing exponentially. Rather than saving for growth, National would slash savings and give the money to the most wealthy to spend. In the long-run, that’s bad news for New Zealand.