The 2012 National Budget was disappointing as Savings and KiwiSaver, in particular, seem to be one of the first areas where the National Gov looks for cuts first when trying to balance the books. The pattern continued in this Budget with National’s decision to “defer” auto enrolment.
Auto enrolment would have seen all working New Zealanders who are not currently in KiwiSaver automatically enrolled with the option to then opt out if they wanted to.
It was a soft form of compulsion with National’s own figures suggesting that around 500,000 more New Zealanders would have gone into KiwiSaver from auto-enrolment. This would have been a significant lift in potential long-term savers, at a time when we need to increase private savings levels.
It is also disappointing that Savings and KiwiSaver is a political football with changes and tweaks every budget it seems. This increases uncertainty for current and future KiwiSavers and is a reason why some New Zealanders are reluctant to enrol in KiwiSaver or increase their contributions to it.
An aligned issue that, once again, was not addressed in the Budget was the 65 year old threshold to get NZ Super. Clearly the age you get NZ Super has to rise as the population lives longer – just not under John Key’s watch.
This whole situation cries out for a Superannuation Accord, similar to the one signed back in 1993, as it increases the likelihood of sound savings policies being developed rather than policies that are being made for political point scoring reasons.
However, it is probably too much to hope that both Labour and National can agree on a combined super and savings policy. This is a real pity as an accord would mean that current workers would have greater certainty on what they will get when they retire from NZ Super and from KiwiSaver and therefore be able to better plan for their retirement years.