2. SHANE JONES (Labour) Link to this
to the Minister of Finance
What recent reports, if any, has he received on the business reaction to the KiwiSaver scheme?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
Among the many positive reports I have seen on the scheme is one from the Employers and Manufacturers Association (Northern). This notes that “Employers in general are supportive of KiwiSaver”. The report went on to express some concern around compliance costs for small business, something it was working to minimise. The report concluded that the future augers well for the scheme.
Hon Dr MICHAEL CULLEN Link to this
Yes; for example, there is similarly positive feedback from ING and from AMP. The only serious report I have seen that is not generally supportive of the scheme is one that continues a nonsensical comparison of it with a Christmas club. I am sure that all the entire managed funds industry and financial sector of New Zealand will be pleased to know that Mr Key thinks they run Christmas clubs.
John KeyShould unions compromise their annual wage demands if they are asking employers to make matching contributions to KiwiSaver?
Hon Dr MICHAEL CULLEN Link to this
I think it is highly desirable that unions and employees think about the way in which they can move forward on KiwiSaver, and I would expect, obviously, that if unions are seeking some degree of salary increase as a result of KiwiSaver contributions to employers, that would be offset in part by salary sacrifice around their own straight wage demands.
Craig FossWhat proportion of KiwiSaver accounts does he think will fall dormant or remain with very modest balances, and how does he calculate that proportion?
Hon Dr MICHAEL CULLEN Link to this
On the last part, obviously it is not possible to make calculations since we will not know until we have seen the scheme in operation. But, of course, if we set up a scheme that provides for lock-in until retirement and provides no ability for flexibility of contributions—for holidays, or to pay down the mortgage, for example—first, National will attack it because it did not have the flexibility, and second, very few people would sign up to the scheme.
Te Ururoa Flavell Link to this
Nā runga i te kautenui o te tau 2001 i kī nei, ko te weheruatanga o ngā utu mō te Māori pakeke ake i te 15 tau he tekau $14,800, he whai kiko te whakaaro ka taea ē te Māori te hoatu kia 4 ō-rau o tōna pūtea moni hua ki te kaupapa Kiwisaver; kua tono anō ia ki ngā rangatira Māori pērā i ērā kei te hui, kei te wānanga i ngā kaupapa ā-pūtea hei whakamana i te Māori kei te tū i te marae o Pipitea i tēnei rangi?
[An interpretation in English was given to the House.]
[In the light of the 2001 census data that the median income of all Māori over the age of 15 was $14,800, how realistic is it to expect Māori will contribute 4 percent of their income to the KiwiSaver scheme; and has he sought any advice from Māori leaders such as those currently meeting to discuss Māori economic empowerment at Pipitea Marae today?]
Hon Dr MICHAEL CULLEN Link to this
I was not aware of that meeting until about an hour or so ago, so it is a bit quick for me to have received any response back from them, from an approach I have yet to make and probably will not make today. On the former matter, of course since then unemployment rates amongst Māori have dropped very considerably indeed, and median incomes will have risen amongst Māori. There is no reason why Māori who are on the same incomes as Pākehā should not have similar savings rates, and every reason why they should.
Tariana TuriaWhat reports has he received from his Māori MPs that the KiwiSaver scheme will have a discriminatory impact for Māori because so few live past the age of 65 years and will therefore not access the benefits of the scheme in a proportional manner?
Hon Dr MICHAEL CULLEN Link to this
That makes a fundamental error. Unlike New Zealand superannuation—which of course if one dies before the age of 65 one never collects—with a contributory scheme even if one dies before the age of 65, the assets within that scheme become part of one’s estate to pass on to one’s heirs. In that respect the KiwiSaver scheme is advantageous when compared with New Zealand superannuation.
Hon Dr MICHAEL CULLEN Link to this
I have seen a report stating that the bill does not define financial hardship. That seems somewhat strange, since clause 11 sets out a quite specific set of rules around that definition, and perhaps before Mr Key utters further silly statements he might care to actually read the bill.