Kiwislaver: unfair, unstable, and unsustainable

KiwiSaver ‘will lead to asset testing’ – New Zealand’s source for business, stock market & currency news on Stuff.co.nz

The Centre for Independent Studies has released an analysis of Kiwislaver which argues that the Government subsidies that the government tacked on at the last minute makes the scheme “unfair, unstable, and unsustainable”.

“People save in many ways, not just by putting money in the bank. Yet it is now more rewarding for people to join KiwiSaver than it is to pay off debt or a mortgage, or to invest in business or an education. This is a major distortion, which could make New Zealand worse off,” Mr Rennie said

As has been mentioned before by bloggers and commentators we now have overlap between NZ Super and Kiwislaver and NZSF.

“With KiwiSaver and NZ Super combined, it is possible for a young person on the average wage to retire on a higher income than they enjoy during their working life.

“It is a complete overload to have a subsidised saving scheme on top of an age pension that is the highest in the OECD.”

And the cost is substantial. NZ Super currently costs $8 billion a year, while KiwiSaver and NZSF will add a further $4 billion by 2016, according to the 2007 Review of Retirement Income Policy.

To make matters worse for the government check out the graphic below.

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