KiwiSaver will increase our household savings, which have fallen to critically low levels.
Excerpt from Dr Michael Cullen’s speech notes for address to EMA Northern CEO Breakfast
If we save more, we consume less. Saving builds the wealth of New Zealanders and helps build the pool of assets needed for business investment. Ask Australians.
I spent some time over the Tasman last week, and they have no doubt about the value of savings. Australia’s compulsory scheme has produced a trillion dollar deep pool of savings – and it is the reason Australian private equity firms can come over here and invest in our economy.
It will grow the pool of capital available for New Zealand businesses. The size of our current account deficit – around nine percent of GDP – shows we have been reliant on overseas savers rather than our own for a large proportion of the capital our businesses need.
KiwiSaver helps small and medium businesses by making more kiwi capital available to help grow your business.
It will also take some of the pressure off monetary policy. Saving more, instead of spending more, will help to ease inflationary pressure, ease interest rates and ease the exchange rate.
It helps employers to attract and retain high quality staff in a competitive international environment at a reduced cost.
Until now, most small and medium New Zealand businesses had no realistic option for providing a workplace-based employee superannuation scheme – let alone one that was portable.
So if you have a business that is dependent on the skills and talents of your staff, you were at a disadvantage in attracting and retaining those staff against employers capable of providing a more attractive scheme.
KiwiSaver makes a simple and affordable workplace savings scheme available to every business.
I am encouraged by the warm response the expanded KiwiSaver has already received in many quarters – from the NZX, and from innovative companies like Gallagher Animal Management Systems and Tourism Holdings.