John MacDonald: We need to go further with Kiwisaver - Canterbury Mornings with John MacDonald

I’m with the KiwiSaver providers who are saying we need to go further than just increasing contributions and we need to make them compulsory.

This is after the announcement by the National Party yesterday that one of its election policies next year will be increasing contributions to 12 percent (6 percent from employers and 6 percent from employees) by 2032, to bring us into line with Australia.

KiwiSaver providers are saying today that they’re liking the policy - but the calls are already coming for it to be made compulsory.

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

National says it’s not in favour of making any contributions compulsory. NZ First is, though.

So does Sam Stubbs, who is managing director of Simplicity.

He’s saying that 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. Who can argue with that?

He says: "Those people who aren't saving into KiwiSaver are going to be much worse off later on in life. So if we want to remove inequality in New Zealand, and we don't like inequality in New Zealand, we have to make sure that everybody is saving for their retirement while they're earning.”

Compulsory KiwiSaver contributions are also going to be essential with any changes to the contribution rates, as National is proposing. Because some people who are paying three percent now won‘t want to pay six percent and so they’ll pull out.

And the only way to stop that, is to make it compulsory.

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