Labour: average worker $100k Kiwisaver cut

Andrew Little and the Labour party is claiming that the National Government “will reduce the average worker’s retirement savings by $100,000 over their working life”. They don’t seem to have thought this attack through very well and offer no solutions.

The claimed loss is due to reduced Government handouts for Kiwisaver. What the Government has been doing since Helen Clark and Michael Cullen were in power is tax workers, and then give some workers some of that back in a subsidy that the was tied up until they reached retirement age (currently 65).

New analysis shows National’s constant cuts to KiwiSaver will reduce the average worker’s retirement savings by $100,000 over their working life, Leader of the Opposition Andrew Little says

“The former Labour Government launched KiwiSaver nine years ago today to boost the country’s savings and ensure all New Zealanders have a nest egg in their retirement.

“National has gutted KiwiSaver.

They haven’t taken any money off workers or their Kiwisaver accounts.

Since coming to office it has made five separate cuts to the scheme:

• Taxed employer contributions

• Halved the maximum Member Tax Credit from $1042 to $521

• Halved the Member Tax Credit rate from $1 for every dollar saved to 50c

• Reduced employee/employer contributions from 4 per cent to 3 per cent

• Abolished the kick-start payment

So everyone in Kiwisaver is still getting handouts, they have just been reduced. In part this is because the uptake of Kiwisaver was well ahead of predictions and the cost to the Government was much greater than expected.

“Analysis by the Parliamentary Library (attached) shows a worker on the average wage joining the scheme today will have total contributions of $3500 after their first year. That would have been $6700 without these cuts.

According to that under the original terms of Kiwisaver they would have been given back $3200 in the first year. That would be tied up until their retirement.

“After their first year, the average worker misses out on $2,200 a year in contributions. That adds up to $100,000 the average worker will miss out on if they retire after 45 years’ work. That’s a big slice of their nest egg.

And it amounts to a big slice of taxpayer money when totalled up over all those getting Kiwisaver subsidies.

This press release from Little is only criticism of National, it doesn’t offer any alternative policy from Labour.

There is a post on this at The Standard – National costs you $100,000 from your retirement fund. Wayne comments:

Lets assume the calculations are correct. It is obviously true that if the taxpayer subsidy for each Kiwisaver account is reduced, the final amount saved in each account will be less.

I recall the reason why the changes were made, which was primarily because the uptake rate was much higher then anticipated by Treasury in part due to the size of the taxpayer subsidy. It also meant the cost to the govt finances was much higher then Treasury estimated, and at a time when we were in the middle of the GFC. This meant money being extracted from the economy and put into long term savings at the very time when current consumption was the need, or in other words the requirement was economic stimulus.

So Labour has now done the calculations of the impact of the changes for an account that lasts 49 years, fair enough. But it does raise the obvious question, will Labour restore all the subsidies for KiwiSaver, at a cost to govt expenditure of probably around $500 million, maybe more?

Ropata responded:

Is that what you tell yourself when cheering on the theft of billions from hard working kiwis?

FFS you RWNJs are short sighted idiots and have fucked over NZ time and time again

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10465138

Theft of billions? All workers are taxed. Those who can afford Kiwisaver deductions get handouts from the Government – they get some taxpayer’s money back.

Ropata:

It’s funny how all the Nat Party policies have a short term benefit to the wealthiest 1% and a long term cost to the long suffering NZ taxpayer.

Kiwisaver handouts benefit probably the wealthiest 50% the most. Reducing the subsidies reduces that.

National must answer for their regressive policies that have worsened inequality in New Zealand and thrown thousands into poverty. that is the “real question” IM(NS)HO

Kiwisaver subsidies have nothing to do with the poverty issue, except that money that could potentially be spent on the poorest is benefiting middle and upper income earners – and Little and Ropata are complaining that this has been reduced!

Andrew Little:

“Figures released this week show growing inequality under this Government. National’s KiwSaver cuts are making inequality worse by making it harder for middle New Zealand to save.”

Kiwisaver does nothing to address the poorest – including those who are already retired and ineligible, those not working and ineligible, and the poorest workers who can’t afford to tie some of their earnings up for decades in Kiwisaver.

This is a poorly thought through attack by Little that offers no solutions.

 

 

Leave a comment

33 Comments

  1. Corkie

     /  3rd July 2016

    Never joined Kiwi Saver. Even got into a rip-roarer with a bank teller who tried signing me up. I couldn’t get through her obtuse skull Kiwi Saver would become a political football begging to be tampered with……guess I was right.

    That said, if you are of the generation coming after the baby boomers, you had better have something in the cookie jar for your retirement because super is on its way to becoming a quaint relic of a failed egalitarian experiment.

    Reply
    • Blazer

       /  3rd July 2016

      Nat Super was the biggest political bribe of all time.Muldoon and the National Party responsible…..of course!

      Reply
      • Gezza

         /  3rd July 2016

        Nice to see you two have the dots in common at least.

        Reply
      • Corky

         /  3rd July 2016

        What Nat super.

        Reply
        • Blazer

           /  3rd July 2016

          National Superannuation.

          Reply
          • Corky

             /  3rd July 2016

            Oh. Rob Is responsible for the super? Do you mean Rob was responsible for scrapping Labours super scheme?

            Reply
            • Blazer

               /  3rd July 2016

              he was…that scheme would have been a colossal billion dollar bonus now if Piggy the so called financial genius had left it alone.

  2. Iceberg

     /  3rd July 2016

    “offers no solutions”

    The last time anybody voted for Labour solutions was in 2005. It was just after the War and butter was rationed.

    Reply
    • Gezza

       /  3rd July 2016

      And we were allowed to eat butter if that’s what we preferred.

      Reply
      • John Schmidt

         /  3rd July 2016

        Butter, you lucky bastard in my house in 2005 under Labour the only butter we could afford was water and gelatine colored with crushed buttercup flowers.

        Reply
        • Gezza

           /  3rd July 2016

          It was the various “gates”, the “anti-smacking” bill, the light bulbs & the shower heads that put me off them in the end I think John. I was doing all right. I was concerned about the number of unmarried kids having babies, I knew a couple who had more than one, they’d failed at school and decided to make that their career because being a mum was important & they got told that. One of them was from a wealthy family. She moved away to Auckland because they didn’t approve. They’ve got less wealthy helping her out all the time. Luckily because they have as much as they can to do with her kids they’re so far doing ok.

          I think National’s doing the right thing on that score.

          Reply
          • Blazer

             /  3rd July 2016

            well do you ever wonder why this govt doesn’t bring back belting kids…peanut!

            Reply
            • Gezza

               /  3rd July 2016

              No. But I don’t think a smack on the hand for a little one when nothing else will work & it needs to be dealt with quickly does any harm. I hate to think of people doing that getting reported and visited by the police. Our society seems to be getting more violent to me.

              Has the change they stopped people beating and killing their kids?

            • Blazer

               /  3rd July 2016

              yes it has stopped people beating their kids.

            • Gezza

               /  3rd July 2016

              Not very many did that and the ones who did are still doing it aren’t they? And the kids are beating each other. Now there’s head-kicking involved. And there are reports that even teachers are getting hit by kids. What’s that all about?

            • Blazer

               /  3rd July 2016

              stop being a wanker Gezza..wheres PZ to educate you.

            • Gezza

               /  3rd July 2016

              Abusing is losing e hoa. Everyone can see that.

        • Blazer

           /  3rd July 2016

          the germanics are known for not having a sense of humour…you confirm it.

          Reply
  3. The scare campaign continues…. good old Labour can always be counted on under A Little leader to go with the negative…. Sad really

    Reply
    • Blazer

       /  3rd July 2016

      National have fine tuned negative politics,going back to the dancing cossacks and every election since…Iwi or Kiwi….anyone!

      Reply
  4. Alan Wilkinson

     /  3rd July 2016

    Kiwisaver is just another excuse to make the Government responsible for your life. Welcomed by clueless who don’t have one and a guarantee they will live and retire poor.

    Reply
    • Blazer

       /  3rd July 2016

      Very harsh Al…everyone is not a sophisticated ,informed citizen.Society has a responsibility to care for every one of our people.

      Reply
      • patupaiarehe

         /  3rd July 2016

        Really Alan? I struggle to understand your logic on this one. How exactly does a small percentage of my earnings being invested in a retirement fund make the government responsible for my life?

        Reply
        • Alan Wilkinson

           /  3rd July 2016

          It gives you the delusion you don’t have to do anything more for yourself and your family.

          Reply
      • Gezza

         /  3rd July 2016

        I’ve had to work & save for what I’ve got. I started off on so little I was amazed they could pay anybody that little and have the government then take a third of it. Then mum asked for board seeing I was working o_O . Most of my life we’ve had to live off one salary. It wasn’t a massive amount. I never went to university so that’s why sometimes I might sound a bit thick. But not all that thick.

        Reply
        • Alan Wilkinson

           /  3rd July 2016

          You don’t sound at all thick, Gezza. University is no guarantee of anything more than average intelligence and three years of learning. You can be highly intelligent and have a lifetime of learning without it.

          Reply
          • Gezza

             /  3rd July 2016

            Thanks Alan. I appreciate that. I’ve done a lot of self-development, worked in different areas, acquired new skills & built on the talents I’ve had. It got me into situations where I became more useful & valuable so my income increased. I worked a lot of 60-70 hour weeks. A lot of it unpaid.

            I’ve worked with a few university graduates in my time and some of them were university educated and very intelligent. Others were university educated and as dumb as shit. We’ve talked about this. I think you might have met some of the latter. If not it was a similar situation.

            Reply
            • Alan Wilkinson

               /  3rd July 2016

              Yes, I judge people as I find them, not according to status or bits of paper, or even as they were yesterday. And there are all forms of skills and intelligence. I try to appreciate and enjoy them all – Kitty and Nelly being cases in point!

            • Gezza

               /  3rd July 2016

              Oh yes! Pair of shockers. I love them.

        • Patricia Midwinter

           /  3rd July 2016

          No, not all that thick Gezza. You seem pretty intelligent to me. You’re a good guy 🙂

          Reply
      • Conspiratoor

         /  3rd July 2016

        What about those who don’t consider themselves to be a part of society blazer? Do I need to care for them as well?

        Reply
        • Blazer

           /  4th July 2016

          if you are talking about non conformists,yes we do.What is non conforming today…may become…passe.

          Reply
        • Gezza

           /  4th July 2016

          I think that’s a good question that needs to be asked and properly discussed without people just dismissing it. It depends which groups of society we’re talking about to.
          Gangs are one group I can think of and I can’t stand them.

          Reply

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