I’ve not yet decided whether the proposed workplace superannuation scheme is overall good or bad.

It is certainly true we do need to lift NZ’s saving rates. The demographics for future superannuation and health costs are incredibly scary, and people should not rely on the state to be able to maintain what we have today.

One of the biggest negatives of the Cullen Fund is that it has conned people into thinking it means superannuation levels and ages can stay the same for when my generation retires. Hence, people have stopped saving at the very time they should be saving more. The Cullen Fund will only cover around 14% of future superannuation.

The proposal will mean more compliance costs for employers, but doing collections through PAYE might minimise that. The proposal by economist Rosanna Wozniak that one could do a trade off by cutting the corporate tax rate, in exchange for employer contributions is an interesting one. However often corporate tax is a withholing tax only, so it effectively mean more costs for business owners. If one cuts company and personal tax rates then one might be talking, plus people would actually have more money to save!

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