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KiwiSaver airborne

Wednesday 30th August 2006

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KiwiSaver, the government's cornerstone savings policy has officially taken to the air.

Parliament passed the KiwiSaver Bill tonight by 71 to 48 votes with just the National Party voting against it.

Finance Minister Michael Cullen says the scheme is "an important milestone towards helping hundreds of thousands of New Zealanders secure their financial future."

"I am proud of KiwiSaver. It is a landmark policy which will make a real difference to the retirement dreams of thousands of New Zealanders."

"The National Party was the only party to vote against KiwiSaver. It is sad to see National so divided over the issue of saving that they voted against KiwiSaver despite a number of its members indicating they might change their minds and support the legislation at the third reading.

The workplace-based saving scheme will start on July 1 next year. The scheme will be voluntary, and those who enrol will get a $1000 start-up grant from the Government and help with a deposit to buy a home.

Employer contributions will be tax exempt and some of the savings can be used for mortgage payments.

National's finance spokesman, John Key, said he knew people had "savings issues" which needed to be addressed but he did not think Kiwisaver was going to work.

Key has criticised late changes to the bill saying letting people use their savings for mortgage repayments had changed it into a cheque account, and people would increase their mortgages when they had paid some of it off.

He has also described the late change to the bill making employer contributions tax exempt was a desperate attempt to generate some good news for the Government.

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