Govt makes a mockery of KiwiSaver promise: Labour

Thursday 26th May 2011 2 Comments

The Government is making a mockery of its promise to seek an election day mandate on KiwiSaver changes, the Labour Party says.

Following last week's budget, Parliament passed legislation under urgency that would cut annual government contributions from $1042.86 to $521.43 starting in July this year, though the payment would be paid in 2012.

While the Government halved its payments, employee and employer contributions would increase from 2 percent to 3 percent.

Prime Minister John Key said KiwiSaver cuts would not impact New Zealanders until after the election and people would be able to vote on the changes.

But Labour finance spokesman David Cunliffe said the Government lied about seeking a mandate as it has passed legislation that effects people starting July.

"The Government has already budgeted on a 50 percent reduction in its contribution before it goes to the electorate for a mandate."

Key maintained that the changes would not kick in until after the election and a new government could reverse the changes.

"In July there is a new formula, but effectively what happens is that's not paid until an annual basis," he told reporters.

"So if there was change of government on November 26, and the incoming government decided they could afford to and wanted to make a change it could do so."

Comments from our readers

On 26 May 2011 at 9:51 am Keith Wallace said:

Does Labour intend to reverse the changes made by the Nats? Sadly just when NZ gets a good retirement savings scheme going and people are on board the Goverment has made two major changes since the scheme was introduced, both of them reducing the benefits to savers. It would be better to just leave well alone and give some certainty to savers over the long term. This Government has also suspended contributions to the Cullen Fund - what a short sighted strategy - if they had kept contributing throughout the Global Financial meltdown in 2008 just imagine what the fund would be like now following the substantial recovery of Capital markets- when will they ever learn??

On 27 May 2011 at 10:49 am Joe said:

In response to Keith. Labour have said that they will not reverse the changes that National have proposed to Kiwisaver or the recent GST hike, which isn't supprising. They spend all their time in the media rubishing Nationals policy then state they'll keep them if they got into power. I guess they need to pay for their huge spending plans somehow..