KEY POINTS:
New Zealanders will make no financial gain claiming back money locked in Australian super funds unless the Government makes significant tax changes on this side of the Tasman, according to international consultants Mercer.
Last week Trade Minister Phil Goff said a proposed regime allowing retirement savings portability between the two countries would free up billions of dollars locked in Australian superannuation funds.
But yesterday Mercer said that, based on its financial modelling, the reality was that without any complementary changes to New Zealand's tax regime, New Zealanders would be better off financially if they leave their savings in Australia and pick them up, tax free, from the age of 60.
"We welcome the closer alignment that makes it easier for New Zealanders to re-claim their retirement savings if they choose to," said Mercer's New Zealand business leader Bernie O'Brien, "however, the only advantage of moving money from Australia back to NZ is a desire to manage all your retirement assets in one place."
Under the current tax regime, an individual with a balance of $100,000 over 20 years could be up to $36,000 better off leaving superannuation savings in Australia, he said.
O'Brien said all KiwiSaver schemes currently were generally taxed at either 19.5 per cent or 30 per cent, depending on the saver's tax rate. Australian superannuation was generally taxed at 15 per cent, with the net amount available tax-free from age 60.
- NZPA
