9. DARIEN FENTON (Labour) Link to this
to the Minister of Labour
What changes is he planning to make to the Employment Relations Act 2000 regarding employer contributions to KiwiSaver?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
The Employment Relations Act is to be amended to ensure that employers pay the employers’ contribution to KiwiSaver and not deduct that contribution from the employees’ own total remuneration. The Government is providing a $20 a week tax credit for employer contributions, which will cover the full cost in the first year of up to $104,000 of employee income. It is unethical for employers to then deduct their contribution from an employee’s remuneration and claim a $20 a week tax credit for something that cost them nothing.
Hon Dr MICHAEL CULLEN Link to this
The changes are necessary because some employers have been pressuring employees to fund the employer contribution. Indeed, some have simply told employees that that would happen. If this were allowed to continue, the scheme would become an 8 percent individual employee contribution, rather than a 4 percent employee contribution plus a 4 percent employer contribution arrangement as at present. In Australia, it is a 9 percent employer contribution—the employee meets none of the cost of his or her superannuation scheme.
Hon Dr MICHAEL CULLEN Link to this
The Employers and Manufacturers Association (Northern), which has admitted to engaging in this practice itself with its own employees, has sent newsletters and taken out newspaper ads calling this a busybody attitude. I understand that the public relations company running this campaign for the Employers and Manufacturers Association (Northern) is the same one that advised former National Party leader Dr Don Brash. The National Party might be interested to know that the company supports mates of theirs in business taking money from their employees and then pocketing a tax credit from the Government.