KEY POINTS:
The Auckland employers' main mouthpiece and hard man Alasdair Thompson and Government bovver boy Trevor Mallard have been in a slug-fest over KiwiSaver. Thompson's Northern Employers and Manufacturers' Association has launched effective newspaper ads, attacking Mallard because the Government intends to push through changes.
Thompson claims the changes
discriminate against young and old workers and those who can't or won't join the scheme.
Mallard responds that Thompson doesn't give a toss about the workers and is only kicking up a fuss because some employers want to include their compulsory KiwiSaver contribution in employment negotiations.
Andrew Little, leader of New Zealand's biggest trade union, the EPMU, says some of his members have been told by their employers to take a reduced wage increase by the amount the employer has to contribute to KiwiSaver. As well, these employers have been pocketing the tax credits which rightly belong to those workers.
Mallard is trying to close that loophole but Thompson seems genuinely outraged that if a worker won't or can't afford to join the scheme the employer pays nothing yet is required to pay up to 4 per cent to those workers who join KiwiSaver.
Most of us would think that as all workers have an equal chance to join, the employer having to contribute to those who do is probably okay. Workers on minimum and low wages cannot afford to pay 4 per cent of their wages into the scheme. In the long run it is a benefit but in the short term it is effectively a wage cut.
My union, Unite, represents thousands of minimal-waged workers and few have joined despite a $1000 start-up from the Government and up to $20 a week tax credit.
That's because someone on the minimum wage would have to contribute 48 cents an hour which they can't afford when food and petrol prices are soaring.
I think Thompson is genuinely outraged that KiwiSaver discriminates on age. Workers under 18 and over 65 don't get the scheme's subsidies. Mallard claims that as youth rates have been abolished and as older workers are entitled to Government superannuation that somehow makes it acceptable. Well it's not. It's clearly discriminatory and unfair.
It is an outrage that young workers and older workers who pay their taxes are not allowed to join a scheme their colleagues can. Thompson's view, which has some merit, is that the workers who aren't entitled or can't afford to join KiwiSaver don't get the subsidy and therefore, effectively, an employer is paying some workers a higher benefit than others.
The only way the scheme would be fair was if it was compulsory for all employees so any contribution by employers would be paid to everybody.
But I've never been a great fan of KiwiSaver. I don't support the principle that workers and employers are effectively forced to join a private superannuation scheme when we already have a taxpayer-funded scheme. The Government offers the worker $1000 from our taxes as an incentive on condition workers fork over a percentage of their income to pay for their old age, when for generations pensions have come from the consolidated tax fund.
If KiwiSaver became widespread it would inevitably lead to the weakening and abolition of universal superannuation.
KiwiSaver is privatisation of superannuation by stealth. The poor and those unable to take up employment will miss out and will end up with some state-funded pauper's pension.
New workers are compulsorily enrolled with a KiwiSaver private provider and unless they opt out they are stuck in it.
If any providers go bust workers will lose their fund. If anyone believes this won't happen, just look at how our finance companies are failing.
Unsurprising, these financial institutions' owners seem to come out rolling in millions of their destitute clients' life earnings. And it won't be any different with KiwiSaver providers.
We should be clear about KiwiSaver. It's mainly the middle class and higher income earners who can afford to join it. These recipients pick up $2000 yet people who cannot afford to join are paying taxes towards this subsidy. That's unfair.
I accept that the Government and trade unions don't trust employers not to use their compulsory contribution as leverage in contract negotiations. But it seems better-off workers can receive a taxpayer subsidy as well as their employer's subsidy while their poorer colleagues get nothing. That's the problem with user-pays policies.
Political parties should accept that a taxpayer and employer-funded superannuation scheme that is not universal is wrong. It helps accelerate the future wealth inequity. Just as bad, it hands the worker's future life savings to private financiers to play with without any security guarantee.
If I had my way I'd scrap it and pour the subsidies into increasing the current Government superannuation scheme which is equitable and secure.