Michael Cullen’s changes to Kiwi Saver may turn out to be one of the bigger transfers of wealth from poor New Zealanders to well off New Zealanders we have seen. If National had done what he did, I am sure Dr Cullen would have condemned them.
Fran O’Sullivan covers this well in her column. Well paid employees who have money to spare will do really well. Their 4% Kiwisaver contribution will be matched by Government and employers at a ratio between 1:1 and 2:1 – both massively generous.
But poor (Labour voting) workers who can not afford to have a 4%+ reduction in take home pay, will get nothing at all. And in Australia they have had their tax drop by over 50%.
Also those poor workers who can not afford to save, will potentially also be hit by higher interest rates. You see I am not convinced Kiwi Saver will not have some initial inflationary impact. As employers get whacked with compulsory contributions, many will seek to recover these costs by putting prices up. I don’t think interest rates will be dropping at the next review.
We should also look at how much Dr Cullen will personally get from Kiwi Saver. I mean Labour always claim National cuts tax just so they personally benefit. Well how well do Labour MPs do from Kiwi Saver.
Helen Clark benefits by $15,480 an annum once fully implemented
Michael Cullen benefits by around $11,500
Cabinet Ministers benefit by $10,020
Backbench MPs by $5,940
Their retirements are just looking better and better.