Next week thousands upon thousands of New Zealanders will wake up to a cut in their take-home pay because of policy decisions by the National/United Future government.
From 1 April 2013 the minimum KiwiSaver contribution is increasing from 2% to 3%, while the Student Loan compulsory repayment jumps a whopping 20% to 12 cents in every dollar earned over the repayment threshold.
Just a second. A Labour MP is complaining that KiwiSaver contributions are going from 2% to 3%?
Under Labour the minimum contributions were 4%, and they complained bitterly when national reduced it to 2%.
Now Labour stands for a gradual move to universal, employment-based KiwiSaver contributions over time, because that will grow the economy and secure savers in retirement.
And while KiwiSaver is currently voluntary, meaning those who can’t afford a drop in the take home pay don’t have to join, Labour propose to make it compulsory to force every worked to take a drop in their take home pay (to use DC’s rhetoric).
There are valid arguments for and against compulsory KiwiSaver, but it is a bit rich to criticise a KiwiSaver contribution increase as being a cut to take home pay, when your policy is to make it compulsory!
But with unemployment today at record levels, and with so many families only just getting by, it’s crucial that changes which hit people in the pocket are well-signalled and well-understood before they take effect.
Umm, the policy was announced well over 12 months ago. And if you are unemployed you are not contributing a portion of your salary to KiwiSaver.
Unless Labour is proposing that KiwiSaver not just be made compulsory for employees, but also for beneficiaries?