KiwiSaver has been only “modestly successful” at getting poorer people to save for their retirement, a new Treasury report says, warning that the scheme “may in fact reduce national savings”.
The working paper on the initial impact of the scheme on retirement savings argues that, because of the subsidies going to those who would have adequately saved anyway, the government may be paying out $13,000 a year for every person at whom KiwiSaver is aimed.
That does not surprise me. Those better off and already saving are the ones most likely to take advantage of 2:1 and 3:1 subsidies for saving.
The Treasury report said as many as 93 per cent of those in KiwiSaver were outside the target group, so the vast majority of the public cost of the savings scheme leaked away from those who may be poor in retirement.
A brave Labour Party would perhaps say we do not believe in middle class welfare where huge tax subsidies go to those who don’t need it, and we’ll restrict savings subsidies to low income NZers only.