What is the Kaspanz view on Labours Kiwi Saver and monetary policy proposal?
One has to applaud new policy of some substance, and this approach by Labour is different, novel, and possibly strategic. There has been a volume of commentary by a range of pundits and media commentators. The key issues appear to be
· Kiwi Saver membership should be compulsory
· Mandatory contributions should rise to 9%, 50% worker and 50% employer.
· A new monetary policy instrument called a variable savings rate, by which the Reserve Bank would be empowered to sequester wage and salary incomes by increasing mandatory contributions to fight inflation
Kaspanz is wary of policy which mixes up savings or retirement income, and other issues, and this Labour Party initiative suggests a dollar each way approach, and there is an old saying, if you remain in the middle of the roadway, you get run over. The idea mixes up peoples own retirement savings, with the Governments monetary policy, differences which almost certainly clash, and raise the spectre of Government t interference
It also threatens the cornerstone of New Zealand’s retirement structure, New Zealand Superannuation. Making Kiwi Saver compulsory undermines the simple and universal New Zealand Superannuation model, which needs ring fencing, and everything else including the Kiwi Saver scheme built around it.
Kaspanz conclusion in essence is negative, but some bonus points for Labour adopting a different approach, and a significant one!
Posted by Alec Waugh: Chairman Kaspanz