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Finance Minister Michael Cullen has defended KiwiSaver against criticism from business leaders who will contribute to the scheme, telling them it's a better investment than "basket weaving in Chad".
Dr Cullen faced more than 200 representatives from the business world at the Herald's Mood of the Boardroom breakfast yesterday.
The event launched the fourth annual Mood of the Boardroom survey, in which only half of chief executives said they intended to contribute to their employees' KiwiSaver schemes.
It also pitched Dr Cullen head-to-head against National Party finance spokesman Bill English, who was quick to counter that there were better investments than retirement.
"Saving does not solve every problem," he said.
"The country is not retiring. The baby-boomers are but the rest of us have got kids and a future."
Those expecting a stoush between the money men of Labour and National would have been disappointed. Mr English praised the good shape of the economy. If Dr Cullen's "thanks Bill for your support of our policies" was mischievous, it was hardly venomous.
KiwiSaver was at the top of the agenda. Businesses in the survey suggested they were unhappy to have been "ambushed" by Budget changes to the scheme. Dr Cullen said he would make no apology. The scheme's introduction could have taken "years of consultation ... with every minor political party" if it had not been a Budget surprise.
KiwiSaver, with a maximum contribution of 4 per cent and a tax credit, was a "very, very good deal for business", he said.
Tax credits were deliberately designed to give more assistance to those on low incomes, who were the target of KiwiSaver, and although Dr Cullen conceded there might not be a high opt-in from workers when the scheme was introduced on July 1, he said a large number of new "modest income employees" would not opt out. (Anyone employed after July 1 is automatically in the scheme unless he or she opts out.)
Mr English confirmed there would be a KiwiSaver scheme under a National government. While there would be changes, the party had not decided on what exactly they would be.
However, he insisted that saving was not the only way to maintain and improve the economy.
Businesses used their money to "grow, push and compete - not just put it all in a bank".
"We've become a very risk-averse country. If we really want to get ahead we have to be more willing to take risks. ...
"We cannot keep using this economy as a cash machine. We've got a choice of sitting back and milking it or putting our shoulder to the wheel.
"We will look at how it [KiwiSaver] can be changed and fixed. You will hear from us before you have to put that tick on the ballot paper."
