KEY POINTS:
The Herald asks three MPs: Is the cost of your savings scheme sustainable with an ageing population?
Michael Cullen, Labour:
The Government effectively is putting into private accounts part of what in the past have been surpluses, and we'll get back to surpluses at some point. Four plus 4 [4 per cent from employees plus 4 per cent from employers] plus up to $20 from the taxpayer, maxing out at $26,000 under the government scheme or $52,000 under National, is comparable with Australia's 9 per cent paid by the employer.
Bill English, National:
KiwiSaver at 2 plus 2 plus 2 [2 per cent each from employees, employers and taxpayers] is fair and affordable and enduring. We are going to see a test of the [4 plus 4] scheme in the next months with recession - it may be that people will pull out of KiwiSaver because they can't afford it. If you make the comparison with Australia, they have a 9 per cent scheme, then they income- and asset-test their pension and they don't have any pre-funding.
Rodney Hide, Act:
The Cullen Fund is taxing people harder now and putting it into a fund so we don't have to tax them so hard in the future. We say you could use that fund to front-load KiwiSaver and give people their own savings accounts [for NZ Super]. We'd prefer young people to save enough for retirement over their life so they have that security and are not so reliant on the government.
