Finance Minister Grant Robertson says the Government will look at how to get the million or so New Zealanders not in the scheme to sign up to KiwiSaver. Photo / Mark Mitchell.
Finance Minister Grant Robertson says the Government will look at how to get the million or so New Zealanders not in the scheme to sign up to KiwiSaver. Photo / Mark Mitchell.
KiwiSaver looks set to undergo more change as the new Labour-led Government moves to put its stamp on the scheme.
As well as the review of the nine default KiwiSaver providers, due to begin next year, Finance Minister Grant Robertson says the Government will look at how to get the million or so Kiwis not in the scheme to sign up.
"That has got to be about a more flexible approach for low-income people, looking at how we link savings to wage growth so that people can make an easy transition into the savings area," Robertson said.
"That piece of work we will do alongside the default provider review next year as well as the legislation."
Robertson, speaking at the Financial Services Council conference last week, said the default provider review which takes place every seven years was a chance to take stock of the market.
"To understand what obligations should be on providers and have a look at those big issues like fees, like ethical investment, because it is the right time to do it and to make sure we are part of enhancing KiwiSaver."
He said making KiwiSaver compulsory was "not on the table at the moment" but that the review would look at auto-enrolment.
Auto-enrolment could involve all working New Zealanders not in KiwiSaver being enrolled on a set date.
The previous National government also considered the move but ruled it out due to cost.
But now the $1000 kick-start incentive no longer exists it would be a lot cheaper.
He said there were cultural and financial literacy issues to consider and affordability concerns for those worried about it taking a bite out of their pay packet.
He also ruled out removing the first home buyer withdrawal option from KiwiSaver saying it had become very important for New Zealanders.
But one thing Robertson said he would like to see more of was KiwiSaver investing into New Zealand companies.
Grant Robertson ruled out removing the first home buyer withdrawal option from KiwiSaver and said it had become very important for New Zealanders. Photo / NZH Focus
Right now much of the money goes off-shore as the New Zealand share market is very small relative to the global market.
"I get you still have to have a decent rate of return and at the moment I don't think we are packaging things up in New Zealand sufficiently well to be able to guarantee that rate of return."
But he pointed to the Government's plans to develop the area called the golden triangle - Auckland, Tauranga and Hamilton - with more transport infrastructure, urban infrastructure and new communities built around transport links.
"How can we package up those developments in ways that are attractive to the private sector? We are working on a special purpose type investment model that allows more private capital to come in - that is an example of where I think KiwiSaver funds could have a massive opportunity."
Asked if default KiwiSaver funds could be made to invest a certain amount in New Zealand he said it was an interesting idea.
"The idea for us is if New Zealanders get a range of funds they are putting their money into that have got different growth paths but also philosophically some different ideas, that would be a good thing.
"There are plenty of people out there looking for ethical funds - plenty of people who want to see money invested in New Zealand. But I appreciate it is there for people to have a good retirement."
Any changes would potentially come on top of a number already set down in law reform before Parliament.
That law proposes allowing people over the age of 65 to join KiwiSaver and would scrap the requirement for people over 60 to be in the scheme for a least five years before they can get their money out.
Those changes could come into effect by July 1 next year.
It also proposes giving people more choice when it comes to the rate they can save at.
