‘Imitation’ Or ‘Perfect Solution’ – Labour’s KiwiSaver Policy

Lillian
Hanly Political Reporter

Labour
has been “ankle tapped” by National on KiwiSaver according
to the managing director of Simplicity, but the wife of Sir
Michael Cullen, who got the scheme going, says the party’s
found the “perfect solution.”

It comes as Nicola
Willis calls the policy a “watered-down version” of National’s.

Labour
announced
on Sunday it would up employer contributions to 6
percent, in line with National’s proposal, but wouldn’t make
employee contributions compulsory to ease the pressure
during a cost of living crisis.

Anne Collins, wife of
Sir Michael and lifetime Labour member, said she was
“absolutely delighted” with the result, after “a lot of”
discussion about KiwiSaver during party
conferences.

“This is just a perfect solution because
it’s such a very, very successful policy,” she told RNZ, but
noted the current government had “repressed our wages”,
referencing public sector job cuts and keeping minimum wage
below keeping up with inflation.

“So people’s wages
are not where they should be.

“It’s making it hard for
people to save for their future, which is so
important.”

This policy was a solution because Labour
would “love to have made it mandatory”, she said, but the
party realised making payments at a time when people were
struggling was “too ideological.”

“It’s just not
practical enough. And Michael was always very pragmatic. I
mean, he has great ideals, but he wanted things that would
work for people.”

She still wasn’t sold on total
compulsion, and described Sir Michael as incentivising the
scheme when he brought it in.

“Everyone got given
$1000, and then they got a good tax rebate, and the
employers got a good tax rebate. So there was a lot of
incentive, not just straight compulsion.”

Collins
said Labour’s policy would re-incentivise people after a
range of cuts and changes to the scheme because they will
see their employer’s contribution growing, their own fund
growing, and be encouraged to get in and “help it when they
can.”

She said Sir Michael would be “disgusted” with
what’s happened to wages and to working people in New
Zealand at the moment.

“He would want everything to be
done to help them.”

But Simplicity KiwiSaver managing
director Sam Stubbs, said National had “ankle-tapped” Labour
on its own policy.

“This is the policy that Michael
Cullen invented, and I would say that National at this stage
seem to have a slightly more comprehensive set of policies
for Kiwis rather than Labour do.”

Stubbs said he was
pleased with most of what Labour was proposing, but that he
was expecting the party to do more.

“I was actually
sort of personally disappointed that their policy wasn’t
everything that National have promised and a little bit
more.”

He said KiwiSaver was Labour policy, and the
history of National has been “nothing other than chipping
away at it.”

“But now, to be honest with you, National
sort of ankle tapped Labour on the KiwiSaver
policy.”

He described moving toward compulsion as
“good”, along with employer only contributions, and getting
rid of total remuneration contracts where employer KiwiSaver
contributions are included in the salary rather than an
additional sum.

But he said the overall amount Labour
wants Kiwis to save for their future was “not going to be
nearly enough.” And the “real disappointment” he added was a
lack of policy for children.

“They need to seriously
look at kids. We should be having KiwiSaver accounts at
birth.”

Both New Zealand First and National are
proposing compulsory contributions for all workers, but have
also both announced policies that would automatically enrol
babies and children.

Labour’s plan offers more
flexibility – Edmonds

Labour’s finance spokesperson
Barbara Edmonds told Morning Report that Labour’s
policy gave employees more flexibility.

“Things are
really tough, and this gives them a little bit more
flexibility to ensure that as their employer is contributing
to their KiwiSaver, they can also match that or put in more
or less depending on their life circumstances.”

Asked
whether it means people will end up with smaller balances if
they pause their contributions, Edmonds said some people
currently were not contributing anything at
all.

“KiwiSaver is now 21 years old. We are looking at
the changes to ensure that people can still afford to
contribute to it, because the alternative is, with the
National Party, if it’s up at 6 percent an employee may have
a reduction of 12 percent from their take-home
pay.”

While the government halved the government
contribution last year, Edmonds said Labour would not be
returning it to what it was.

“Unemployment is now
higher. We have more people having to withdraw from their
KiwiSaver in order to pay for everyday costs. We have youth
unemployment at a 30-year high. We did not have those levels
when we were in government.”

On Sunday, Labour leader
Chris Hipkins explained automatic enrolment wasn’t something
Labour was currently considering.

“Right now we have
to make different choices, and we made different
choices.”

National’s Nicola Willis said the policy was
just a “watered-down” version of her own party’s announced
in June.

“While imitation is a sincere form of
flattery, their attempt falls short. It’s less ambitious
than National’s and won’t help Kiwis saving for their future
anywhere near as much.”

New Zealand First used the
same line in June about National’s policy, having already proposed
automatic enrolment in May.

“Imitation is the most
sincere form of flattery. It is New Zealand First’s policy,
both with respect to the start up. We say $1000 per child
birth, they’re saying $1500,” Winston Peters said at the
time.

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