KiwiSaver

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.

Australian mutual, eo, has established a New Zealand arm and already registered a KiwiSaver scheme.Eo financial services New Zealand chief executive Kevin Beasley says Eosaver is already the employer-chosen KiwiSaver scheme for many employees of recruitment and employment services companies in New Zealand.

He says eo is building on a foundation of more than 10 years experience in superannuation, managing more than $1 billion in savings for over 350,000 members of Australian superannuation funds including RecruitmentSuper and Accountants Super.

Kevin Beasley says eo provides competitive fees, a range of investment options designed to suit most people and does not pay commissions to third parties for referrals.

Eo provides support to participating employers with no employer fees, and provides member benefits including no hidden charges or trailing commissions related to the scheme.

“Saving for retirement has been our core business for many years and we use our knowledge and skills to keep things easy. We don’t think saving for retirement has to be complicated or difficult to understand, and we work hard to ensure eosaver members are provided with clear, easy to understand information, that keeps them informed, and helps them make the right choices for their financial future.”

Don’t Dismantle KiwiSaver To Pay For Tax Cuts For High Income Earners
—

“KiwiSaver is good news for many workers, and the government and employer
contributions shouldn’t be scrapped to help National pay for tax cuts that
deliver the biggest benefits to those on high incomes,” CTU secretary Carol
Beaumont said yesterday.

“The main income issue for low and middle income workers is the need for
better wages, and strengthening collective bargaining so that low wages can be
addressed at an industry level by workers and employers. CTU unions are
actively working on that while the National Party is significantly silent.”

“There is strong interest in KiwiSaver from workers, and unions are working
hard to make sure their members know about their entitlements and get the best
opportunities to benefit from Kiwisaver.”

“Yes there are problems for those on low wages, and the CTU has consistently
argued for easier access for low-income workers into KiwiSaver, and will still
argue for a 2% minimum contribution option.”

“The introduction of a 4% employer contribution to workplace savings phased
in over the next 4 years means New Zealand workers can start to catch up with
their Australian colleagues where a 9% employer contribution is required.
This is excellent news for many workers, and we hope it stays.”