When I first heard about Winston Peters’ idea to give every newborn baby $1,000 so they can have a KiwiSaver account from birth, I liked the sound of it.

Until I did some numbers. Which I’ll get to.

Announcing the NZ First policy yesterday, he said it would be compulsory for every newborn to be signed-up to KiwiSaver and the state would throw in $1,000 to get things started.

He said the policy would ensure every child began their financial life as a KiwiSaver member and would be a nest egg for what he’s calling “the KiwiSaver generation”.

Which sounded pretty good on first blush. Until I did some numbers.

Let’s start with what it would cost the government.

There were about 58,000 births in New Zealand last year. So, on those numbers, that would put the cost of this policy at around $58 million a year.

And what would that $1,000 government contribution, on its own, be worth after 65 years?

Assuming 4 percent interest for 65 years, it would come to $12,800. If we assumed 7 percent over 65 years, it would come to about $80,000.

And, when I consider those numbers - plus the tens of millions of dollars of government money every year for that kind of return - I think it’s a dud of an idea.

But Winston does have another KiwiSaver idea that I think is an absolute no brainer. Making it compulsory.

Winston and I are not on our own thinking this.

Sam Stubbs, who is managing director of the Simplicity KiwiSaver outfit, does too.

He says it has to be compulsory because we have to make sure everybody is saving for their retirement while they're working. And the only way to do that is to make it compulsory.

Across the Tasman, it’s compulsory for employers to contribute but not for workers.

Which doesn’t sound terribly fair to me. Because why should employers be forced to make contributions if the people who work for them aren’t?

I remember reading about the number of people who don’t have a KiwiSaver account and some work that had been done to work out how much people are missing out on because of that.

Collectively, with so many people not even saving the minimum 3 percent of gross salary, the KiwiSaver pot is going to be about $110 billion less than what it should be or could be if we all had an account we were putting money into.

And it’s not just the people who don’t have accounts. About a third of those of us who do have KiwiSaver accounts aren’t contributing anything. Which is why it has to be made compulsory.

And it’s not like people would be out marching in the streets if it was made compulsory. Because a survey a couple of years ago found that 62 percent of us support the idea.

I don’t know if that level of support may have waned since then because of the cost of living.

Nevertheless, making KiwiSaver compulsory for workers is a no-brainer and a way better approach than NZ First’s idea of making it compulsory for newborns.

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