Thursday, 27 October 2011

Labour kick employers in the guts with Kiwisaver.

Interesting that Labour's policy released today that advocates making Kiwsaver compulsory and raises the employer contribution to 7% from 2% and keeps employee contributions the same is about saving.

"The KiwiSaver change "for all workers" would take effect from 2014.

Employee contributions remain at 2 per cent, "because we know families are finding it hard to make ends meet right now, let alone save".

However, employer contributions would increase by 0.5 per cent a year from 3 per cent in 2014 to 7 per cent by 2022.

"Making KiwiSaver universal will make it simpler for Kiwis to save and build a retirement nest egg", "Universal KiwiSaver also reduces our reliance on foreign lending. It builds up our own pool of savings which can be invested in New Zealand businesses and create jobs for Kiwis."

To make the policy more affordable for the Government, Mr Goff said Labour would phase in the $1000 kick start for all new members at $200 a year". NZ Herald

The $1000 every kiwisaver will get via a State handout will be borrowed from China and gather interest. The employee contributes a tiny amount and the employer gets socked the most.

The merits of saving via kiwisaver have yet to be shown. So far it has been a gigantic failure in terms of saving and returns.

The big kick in the guts though is for employers who will struggle to make this contribution and to kick our business in the guts at a time of severe recession is just plain idiotic.

The taxpayer is a net loser from this policy.

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