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. 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
“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.
“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.
“Axing the start-up payment alone resulted in new KiwiSaver sign-ups plummeting.
“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.
“For many people, KiwiSaver is their largest financial asset outside their home – if they’re lucky enough to own one. Having less savings in their scheme means people will be forced to work for longer and will have less to retire on,” Andrew Little says.