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Mike Hosking: Government needs to stop messing with KiwiSaver

Author
Mike Hosking,
Publish Date
Wed, 30 Oct 2019, 3:42PM
(Photo / Getty)

Mike Hosking: Government needs to stop messing with KiwiSaver

Author
Mike Hosking,
Publish Date
Wed, 30 Oct 2019, 3:42PM

We seem to have entered an almost telethon-type situation with KiwiSaver.

Every man and his dog is dreaming up new ideas in which to attract more people to join, and presumably those who have joined, more reasons to save.

KiwiSaver is one of the great inventions in this country of the modern fiscal age. It has made the most concerted and specific effort to get us to think outside the house. Not that there is anything wrong with the house. Millions of New Zealanders worked, saved and retired using their property money, long before KiwiSaver was ever a “thing”.

The partially successful trick appears to have been to get younger people involved in the concept of saving. Start young, start with a little, and if you're lucky you'll end up with a pot of gold.

Of course, the biggest mistake was involving the government, not that we could have done it without them, but if anyone was going to mess with the concept and rules, it was successive governments and so it has proved to be.

The employers contributions, how much the contribution was whether there was a contribution at all. The ability to pull some out for a house and the current slew of  ideas ranging from making it a salary-type arrangement not a payout. And getting the government to cough $2,000 instead of $500.

All of it breaks the fundamental concept of "leaving it alone”. It's the length of stability, and the compound return being the magic ingredients that makes it work. I mean, obviously, if the government want to give everyone two grand, fantastic. But do the math on that. And when it's two grand, what stops it being three grand and so it goes. Somewhere in here, we need to start owning this a bit ourselves.

Never forget, the whole idea of saving for your retirement was to make us less reliant on the government. A government that couldn't be trusted on super. A government that messed with super, and made promises around super. All they have done is transfer the level of distrust into KiwiSaver.

I also can’t help but wonder if there hasn’t been so much talk around KiwiSaver, it's come at some sort of detriment to other mechanisms. The number of default funds is a massive indication that either people don't care or don't know - the later being of greater concern.

 There has been the talk of compulsory membership or opt out clauses, all of which make it less saving and more government control. Finesse it if you like, but KiwiSaver has been around long enough now for it to be what it is.

And for it to be a mechanism if you want it, or not if you don’t. And the more we muddle and mess around with it, the less attractive and more confusing it becomes.

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