Public backs savings scheme, poll finds

An opinion poll has found strong support for a taxpayer-assisted savings scheme of the kinds advocated by the New Zealand Institute.

Last month, the institute proposed setting up individual "Kiwi savings accounts" to meet tertiary education costs, the deposit on a first home and retirement. The accounts would cost the taxpayer about $3.2 billion a year - a sum the Government and Opposition balked at.

A survey of 750 people by UMR Research in late April and early May found that 64 per cent supported the introduction of Government policies to help people save. Fifteen per cent were opposed. Support reduced, but only slightly, as details of the institute's scheme were explained.

The plan includes automatically opening a savings account for children at birth, with a $500 contribution from the Government, repeated at ages five and 10. The Government would also match family contributions dollar for dollar up to $200 a year until the child turned 18. Sixty-four per cent of respondents supported that, 17 per cent opposed.

A central plank of the scheme is a 2 per cent income tax cut, which would be paid into the individual's account on an ongoing basis rather than flowing to his or her take-home pay. Sixty-two per cent supported that, while 19 per cent were opposed.

People were not asked if they would rather have the tax cut in the hand.

The plan also includes the Government matching additional voluntary contributions to the savings account up to $500 a year. Sixty-one per cent approve, 19 per cent oppose.

A high proportion of respondents supported allowing withdrawals for the cost of tertiary education (75 per cent) and the deposit on a first home (83 per cent).

But they were evenly divided on allowing transfers to the accounts of children.

When told the scheme would cost the Government more than $3 billion a year support slipped to 56 per cent, with 19 per cent opposed.

The institute's chief executive, David Skilling, said: "Most people would understand $3 billion is a lot of money."

The fact that most people still supported the scheme and no more opposed it after being given that number suggested many New Zealanders would regard the proposed fiscal commitment as worthwhile.