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National: Seven KiwiSaver cuts in seven years

National’s campaign of KiwiSaver cuts has reached seven in seven years as it dismantles KiwiSaver block by block, Labour Leader Andrew Little says.

“KiwiSaver is critical to establishing a savings culture in New Zealand but National has taken a jenga-style approach, removing block after block and undermining its foundations.

“After being the only party to vote against KiwiSaver at its final reading, National has made seven stealth cuts to the scheme, reducing its effectiveness, lowering savers’ confidence in it and making it less attractive for people to enter it.

“New Zealand’s savings rate is far too low. KiwiSaver has seen a big improvement in that rate. Cutting it off at the knees makes no sense.

The seven cuts are:

  • Capping compulsory employer contributions at 2 percent in April 2009.
  • Cutting the member fee subsidy of $40 a year in April 2009.
  • Taking away the mortgage diversion option in April 2009.
  • Abolishing employer tax credit in April 2009.
  • Halving member tax credit from $1,042 to $521 a year in July 2011.
  • Taxing the employer contribution in April 2012.
  • Cutting the kickstart of $1,000 in May 2015.

“KiwiSaver was set up by Michael Cullen to ensure Kiwis had a nest egg for retirement and businesses had a large source of local investment capital. Both are absolutely critical to the long-term success of our country and economy.

“KiwiSaver isn’t just good for savers, it’s good for New Zealand.

“National’s latest cut – to the $1000 kickstart – will mean 500,000 people will miss out. National is taking KiwiSaver apart piece by piece,” Andrew Little says.