Speech notes for launch of KiwiSaver publicity campaign, Holiday Inn, Featherston St, WellingtonKiwiSaver is a landmark in New Zealand’s economic and social legislation and I welcome this campaign to introduce it to working New Zealand.
One standout feature of KiwiSaver’s design is its simplicity. It makes it easy to join, easy to administer, easy to take with you when you change jobs…and, because of the government’s contribution, KiwiSaver makes it easy to building the savings you need when you retire.
So because KiwiSaver is a simple scheme for savers, it’s an easy message to communicate, and I believe this campaign will be more successful as a result.
One of the biggest problems we have with getting people to save is getting people interested. Most of us know by now that we need to have some financial assets put aside when we retire if we want to enjoy a standard of living comparable to our working life. But we put off the job of saving because we tell ourselves we have higher priorities. Retirement seems a long, long way in the future – until one day suddenly it isn’t. (Although, in my case, there are quite a few years to go yet…).
As a result, not enough of us are saving – especially in the groups who need help the most. A survey of household savings in 2001 showed only a low proportion of kiwis in low and middle earning range (of $15,000-$50,000 then) had any financial assets at all – just 15% of individuals and 17% of couples in that earning bracket.
The way to get people engaged is to get them started in a regular programme of saving.
And the campaign around KiwiSaver will build the interest and help to engage the interest of kiwis at work in getting started.
When not enough of us are saving there are real effects on individuals directly, through a lower standard of living in retirement. And it has real effects on the wider economy, which in turn affects the wellbeing of all New Zealanders.
When we are spending more than we save – as much as $1.15 for every dollar we earned last year, according to one measure – inflationary pressures are higher, interest rates are higher, which puts pressure on our exchange rate and our exporters.
So anything that helps to increase saving helps us all.
Not everyone will sign up to KiwiSaver on day one, when the scheme starts on the first of July. I would be surprised if people didn’t look at their current commitments and wonder where they are going to find 4% or 8% of their gross salary.
But we know that around 700,000 kiwis change jobs every year, and they will be automatically enrolled then (with the option to opt out within 8 weeks). Most often, people expect their salaries to increase as they change jobs, so there will be more room to put something aside.
Others might decide to join as they pay off hire purchase liabilities and so on, instead of taking on more debt.
Others will join the scheme as they receive their normal wage increases.
I’ve been encouraged since the budget that many employers and most unions are making positive noises about supporting working people into KiwiSaver.
The Stock Exchange welcomed the scheme immediately, and major employers are indicating KiwiSaver works for them – employers like innovative international kiwi company Gallagher Animal Management Systems, and our biggest tourism company, Tourism Holdings.
And last week Air New Zealand announced it would contribute the full 4% of the matching employer contribution from next April, three years earlier than required. That’s very heartening and I am confident more employers will see KiwiSaver as a smart way to encourage greater loyalty and to recruit and retain skilled staff.
And it’s not just a simple, effective scheme for big employers; it’s a low cost, off the shelf super scheme for smaller employers as well. I was reminded of this last week when I visited an innovative irrigation technology company on the Kapiti Coast. One of the owners told me, ‘”I want the very best for my employees. If it encourages them to be better off, then I am all for it.” That’s a great attitude.
I was interested to read comments from members of the public who were shown previews of the publicity campaign. They made comments such as, “They make it easy – one less thing to worry about-…and – No matter what the day throws at you – your KiwiSaver will be safely ticking over”.
If we foster those attitudes, we will overcome one of the big hurdles in the way of lifting our saving – the motivation to get going, and the feeling that it’s too hard.
It remains for me to congratulate everyone involved in the campaign, from IRD and Saatchis Wellington especially.
When they were given the brief to go out and design this campaign, they thought they were working with the original design of KiwiSaver. I can only imagine how stressed they must have been on budget night, when they realised KiwiSaver was being very significantly boosted – but still starting on the same date. With a bit of work in the edit suites, they have come through with the campaign on schedule, and I would like to thank everyone who got that work done quickly.
The advertising campaign begins tonight during the six o’clock news on TV One. There’ll be newspaper ads from mid June, with tie-ins to radio and online advertising.
This is a big campaign. It’s big because this is a very big and very important initiative. It affects every single New Zealander, because it affects our economic and social future. And it affects every working New Zealand because we all have decisions to make about how we will save for our retirement.
In decades to come as retirees use their KiwiSavings, I am sure television nostalgia programmes will look back to this day, to the day it all began, and they will play the first KiwiSaver tv commercial.
So we are making history here, and I welcome the beginning of history tonight, with the launch of this campaign.