Finance Minister Nicola Willis is looking at upping the amount employees and employers contribute to their KiwiSaver accounts.
She's seeking advice and taking advice on where we take KiwiSaver in the future.
Commentator Shane Te Pou is saying we should be paying the same as they do in Australia where employer contributions are around 11%.
Employers and Manufacturers Association Head of Advocacy Alan McDonald talks to Kerre Woodham about the proposal.
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Episode Transcript
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Speaker 1 (00:06):
You're listening to the Kerrywood and Morning's podcast from News Talks.
Speaker 2 (00:10):
He'd be As I mentioned earlier, Finance Minister Nikola Willis
is looking at upping the amount employees and employers contribute
to their key we saver accounts. Not sure when, not
sure how, but she's seeking advice and taking advice on
where we take ke we Saver in the future. I
want to see New Zealand as key we Saver balances
(00:32):
increasing over time so they have more financial security in
their retirement. Commentator Shane to Powe is thing we should
be paying the same as they do in Australia, where
employer contributions are around eleven percent. Alan McDonald is the
Employers and Manufacturers Association head of Advocacy. Alan joins me,
(00:52):
now'm morning to you.
Speaker 3 (00:54):
Bond and Kerry.
Speaker 2 (00:55):
What would happen to employers if we introduced an eleven
percent contribution.
Speaker 3 (01:01):
Well, I think at the moment you'd get a fairly
strong pushback on that, and I think it's important to
remember that the Australian system, where it goes that high,
that's been a graduated process and started much lower than that,
and then over an extended period of time they've moved
up to ten and eleven percent.
Speaker 2 (01:20):
Yep. It's part of an employment package, isn't it your
employer contributions.
Speaker 3 (01:27):
Yes, it is, And some employers, private sector employers and
mainly in the government sector, they offer a slightly higher
contribution as part of the package as a way of
attracting talent to the organizations, and government traditionally underpaid to
the private sector, so they use that as an attractant
(01:48):
for that sector.
Speaker 2 (01:50):
Yes, easy enough to do if you have taxpayer money
to play with. A bit harder if you're generating your
own income, isn't it.
Speaker 3 (01:57):
Yeah, it is a bit. And as we all know,
things are still very very tight in the economy, particularly
for those small to medium businesses who are continues to
do it pretty tough. And the numbers we're getting through
our advice line and things are still quite high around
restructuring and redundancy and all that kind of stuff, which
is not great for anyone. So I think it's a
(02:18):
good idea to have the conversation. But in the short
term anyway, it's hard to see the capacity in the
system to have any significant increases. It would have to
be graduated.
Speaker 2 (02:29):
Yeah, and I suppose we could look at four percent,
couldn't we, Because I'd forgotten until Shane to Poe mentioned
it in his column. But after the GFC, the rise,
that incremental rise from three to four percent was delayed,
and it seems to have been delayed for a very
long time.
Speaker 3 (02:50):
Yeah, I think we're well past the GFC now, and
we've passed COVID as well, so I think all the
indicators tend to be heading in the right direction at
the moment, so I think it's appropriate to have that conversation.
I think it's probably not a bad idea to shift
it up to four. You also need to look at
the other side of the equation though, as well, and
what the contribution is from employees. Yeah, because that's that's
(03:15):
a range of three to eight at the moment, so
you may want to look at that. And I think
it's worth and it's almost a dirty word in New Zealand,
but it's worth making it compulsory for all employees because
at the costs of healthcare and everything else in particular
just growing exponentially, so to have something to help look
after yourself when you do finally make the decision to
(03:37):
finish work, it just makes sense yeah.
Speaker 2 (03:40):
And we don't have a high degree of financial literacy
in this country. Can we say there is easy to understand?
I guess one thing I'd ask there's been a couple
of rogue employers that have gone bust, taking their employees.
Can we say the contributions with them? Can they be
clawed back in the con liquidatas or the those appointed
(04:03):
to look after the cleanup? Can you get that money
back if you're an employee, In.
Speaker 3 (04:11):
Theory you should be able to. But if the money's gone,
the money's gone. And that's the kind of behavior you
don't want to see anywhere.
Speaker 2 (04:17):
No, and it's only a couple of rogue ones. But
I was just wondering about the security of that when
it's taken its source.
Speaker 3 (04:24):
Yeah, I probably have an opinion on m should happened
to those employers, But.
Speaker 2 (04:30):
Not for an air that's more for it. Okay, And
just what I've got you with the figures due out
this week, the GDP figures due out this week, have
we escaped a recession? Do you think.
Speaker 3 (04:44):
If we have, it'll be by a very skinny margin,
It'll be less than one percent? And actually I don't
think the numbers matter at the moment to be honest, Yeah,
they might be showing a direction of travel, but it's
still just really tough and it's probably going to be
that way, I think for at least another six months.
Speaker 2 (05:02):
Or so, another six months, Kraky. I mean, i'd that
investment summit gave some hope, you know, there was some
sort of positivity and talk and go forward momentum.
Speaker 3 (05:14):
But oh, look, I think they've got to in terms
of just the fields, if you like, and the vibe
of the thing definitely heading in the right direction. And
as I said earlier, there are a lot of other indicators,
but I mean, the difference between getting the money and
getting the shovels in the ground is significant in those
in some particularly in those bigger projects. So yet direction
(05:36):
of travel, all indicators sort of heading north if you like,
but coming off a very low base. And I think too,
we'll be looking to the budget to just see if
there's anything any signals in there around not a handout,
but maybe just easing a few things here and there
to make it a bit easier to invest in new
people and invest in your.
Speaker 2 (05:55):
Businesses, hopefully. I was listening. I was listening to a
conversation between school age parents, you know, primary school age
parents have got the mortgage. That's usually the first few
years of the mortgage, and they're saying it's just grinding, grinding, grinding, grinding.
There's no money left over for any kind of disposable
(06:17):
treats or extras. It's just been a long grind and
that's kind of what it feels like.
Speaker 3 (06:25):
Yeah, that's kind of the message we're getting from our
members as well, Kerry. We've just been out on the road.
We're still out on the road doing our briefing round
and we talked to about fifteen hundred to two thousand
of our members through those rounds, and as you say,
there's not a lot of room for extras. Some sectors
are doing okay, some of the exporters are actually they
(06:46):
are really starting to build, But other sectors it's just
been a long, slow, tough grind. After what's been six
or seven of the toughest years we've had in our row, the.
Speaker 2 (06:56):
Good times have got to be coming, they really do.
Speaker 3 (06:59):
We live in hope, Kerry, in hope.
Speaker 2 (07:01):
That's what we've got that doesn't cost us anything. Lovely
to talk. Alan McDonald, m head of Advocacy, saying Yeah,
the time is right to have that conversation, perhaps about
a four percenter, and to look at what employees are
doing as well.
Speaker 1 (07:15):
For more from Carry Wooden Mornings, listen live to News
Talks A B from nine am weekdays, or follow the
podcast on iHeartRadio
You're listening to the Kerrywood and Morning's podcast from News Talks.
Speaker 2 (00:10):
He'd be As I mentioned earlier, Finance Minister Nikola Willis
is looking at upping the amount employees and employers contribute
to their key we saver accounts. Not sure when, not
sure how, but she's seeking advice and taking advice on
where we take ke we Saver in the future. I
want to see New Zealand as key we Saver balances
(00:32):
increasing over time so they have more financial security in
their retirement. Commentator Shane to Powe is thing we should
be paying the same as they do in Australia, where
employer contributions are around eleven percent. Alan McDonald is the
Employers and Manufacturers Association head of Advocacy. Alan joins me,
(00:52):
now'm morning to you.
Speaker 3 (00:54):
Bond and Kerry.
Speaker 2 (00:55):
What would happen to employers if we introduced an eleven
percent contribution.
Speaker 3 (01:01):
Well, I think at the moment you'd get a fairly
strong pushback on that, and I think it's important to
remember that the Australian system, where it goes that high,
that's been a graduated process and started much lower than that,
and then over an extended period of time they've moved
up to ten and eleven percent.
Speaker 2 (01:20):
Yep. It's part of an employment package, isn't it your
employer contributions.
Speaker 3 (01:27):
Yes, it is, And some employers, private sector employers and
mainly in the government sector, they offer a slightly higher
contribution as part of the package as a way of
attracting talent to the organizations, and government traditionally underpaid to
the private sector, so they use that as an attractant
(01:48):
for that sector.
Speaker 2 (01:50):
Yes, easy enough to do if you have taxpayer money
to play with. A bit harder if you're generating your
own income, isn't it.
Speaker 3 (01:57):
Yeah, it is a bit. And as we all know,
things are still very very tight in the economy, particularly
for those small to medium businesses who are continues to
do it pretty tough. And the numbers we're getting through
our advice line and things are still quite high around
restructuring and redundancy and all that kind of stuff, which
is not great for anyone. So I think it's a
(02:18):
good idea to have the conversation. But in the short
term anyway, it's hard to see the capacity in the
system to have any significant increases. It would have to
be graduated.
Speaker 2 (02:29):
Yeah, and I suppose we could look at four percent,
couldn't we, Because I'd forgotten until Shane to Poe mentioned
it in his column. But after the GFC, the rise,
that incremental rise from three to four percent was delayed,
and it seems to have been delayed for a very
long time.
Speaker 3 (02:50):
Yeah, I think we're well past the GFC now, and
we've passed COVID as well, so I think all the
indicators tend to be heading in the right direction at
the moment, so I think it's appropriate to have that conversation.
I think it's probably not a bad idea to shift
it up to four. You also need to look at
the other side of the equation though, as well, and
what the contribution is from employees. Yeah, because that's that's
(03:15):
a range of three to eight at the moment, so
you may want to look at that. And I think
it's worth and it's almost a dirty word in New Zealand,
but it's worth making it compulsory for all employees because
at the costs of healthcare and everything else in particular
just growing exponentially, so to have something to help look
after yourself when you do finally make the decision to
(03:37):
finish work, it just makes sense yeah.
Speaker 2 (03:40):
And we don't have a high degree of financial literacy
in this country. Can we say there is easy to understand?
I guess one thing I'd ask there's been a couple
of rogue employers that have gone bust, taking their employees.
Can we say the contributions with them? Can they be
clawed back in the con liquidatas or the those appointed
(04:03):
to look after the cleanup? Can you get that money
back if you're an employee, In.
Speaker 3 (04:11):
Theory you should be able to. But if the money's gone,
the money's gone. And that's the kind of behavior you
don't want to see anywhere.
Speaker 2 (04:17):
No, and it's only a couple of rogue ones. But
I was just wondering about the security of that when
it's taken its source.
Speaker 3 (04:24):
Yeah, I probably have an opinion on m should happened
to those employers, But.
Speaker 2 (04:30):
Not for an air that's more for it. Okay, And
just what I've got you with the figures due out
this week, the GDP figures due out this week, have
we escaped a recession? Do you think.
Speaker 3 (04:44):
If we have, it'll be by a very skinny margin,
It'll be less than one percent? And actually I don't
think the numbers matter at the moment to be honest, Yeah,
they might be showing a direction of travel, but it's
still just really tough and it's probably going to be
that way, I think for at least another six months.
Speaker 2 (05:02):
Or so, another six months, Kraky. I mean, i'd that
investment summit gave some hope, you know, there was some
sort of positivity and talk and go forward momentum.
Speaker 3 (05:14):
But oh, look, I think they've got to in terms
of just the fields, if you like, and the vibe
of the thing definitely heading in the right direction. And
as I said earlier, there are a lot of other indicators,
but I mean, the difference between getting the money and
getting the shovels in the ground is significant in those
in some particularly in those bigger projects. So yet direction
(05:36):
of travel, all indicators sort of heading north if you like,
but coming off a very low base. And I think too,
we'll be looking to the budget to just see if
there's anything any signals in there around not a handout,
but maybe just easing a few things here and there
to make it a bit easier to invest in new
people and invest in your.
Speaker 2 (05:55):
Businesses, hopefully. I was listening. I was listening to a
conversation between school age parents, you know, primary school age
parents have got the mortgage. That's usually the first few
years of the mortgage, and they're saying it's just grinding, grinding, grinding, grinding.
There's no money left over for any kind of disposable
(06:17):
treats or extras. It's just been a long grind and
that's kind of what it feels like.
Speaker 3 (06:25):
Yeah, that's kind of the message we're getting from our
members as well, Kerry. We've just been out on the road.
We're still out on the road doing our briefing round
and we talked to about fifteen hundred to two thousand
of our members through those rounds, and as you say,
there's not a lot of room for extras. Some sectors
are doing okay, some of the exporters are actually they
(06:46):
are really starting to build, But other sectors it's just
been a long, slow, tough grind. After what's been six
or seven of the toughest years we've had in our row, the.
Speaker 2 (06:56):
Good times have got to be coming, they really do.
Speaker 3 (06:59):
We live in hope, Kerry, in hope.
Speaker 2 (07:01):
That's what we've got that doesn't cost us anything. Lovely
to talk. Alan McDonald, m head of Advocacy, saying Yeah,
the time is right to have that conversation, perhaps about
a four percenter, and to look at what employees are
doing as well.
Speaker 1 (07:15):
For more from Carry Wooden Mornings, listen live to News
Talks A B from nine am weekdays, or follow the
podcast on iHeartRadio
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