Compulsory super would cost 800,000 votes’: NZ Opposition

Bill English, finance spokesperson for the opposition New Zealand National Party, has quashed the hopes of many product manufacturers by ruling out the possibility of upgrading the coming ‘opt out’ workplace retirement savings scheme, KiwiSaver, into a compulsory system.

English told delegates at the SuperFunds Conference held in Wellington last week that there was no political will in either the National Party or the incumbent Labour Party to convert KiwiSaver to a full-blown compulsory superannuation scheme. He said experience has shown that New Zealanders don’t want compulsory superannuation and any party favouring it could stand to lose 800,000 votes. “I’m sure if you asked Michael Cullen [current Finance Minister and deputy Prime Minister] he would say the same thing. There’s a kind of a mutually assured destruction pact that compulsory super won’t happen,” English said. “;My party has spent 15 years on the wrong side of this debate and suffered mortally for it.”; His comments would have disheartened many of New Zealand’s product manufacturers who have been gearing up for the KiwiSaver scheme on the understanding that compulsion would soon be introduced. KiwiSaver, which kicks off on July 1 this year, is an ‘opt out’ scheme with those newly-employed after the start date automatically enrolled in a retirement savings product. However, those employees enrolled in a KiwiSaver scheme have up to eight weeks to opt out. The scheme also allows employees to choose to contribute either 4 or 8 per cent of their salary to any KiwiSaver products with the right to transfer to other approved funds at any time. The New Zealand government has tried to sweeten the deal by contributing $1,000 to each new KiwiSaver account and by offering some tax concessions for employer contributions. The KiwiSaver scheme has a mortgage diversion facility as well as subsidies for first home buyers.