17 May 2015

Greens pledge $1000 for each newborn

3:24 pm on 17 May 2015

Every newborn child would be given $1000 by the government under a children's savings scheme unveiled by the Green Party today.

Green Party co-leader Metiria Turei.

Green Party co-leader Metiria Turei announced the party's new national savings policy - Kids' KiwiSaver - today. Photo: RNZ / Diego Opatowski

It said the policy - called Kids' KiwiSaver - would give children the start in life they needed and deserved, though parents would be able to opt out of it.

The party said, on top of the $1000 kickstart, every child living below the poverty line would get a government top-up of $200 per year until they turned 18.

Family contributions up to $100 per year would also be matched.

The Greens said, under this scheme, a teenager would have at least $12,900 saved by the time they turned 18.

The party said middle and low-income earners did not have the income to save for their children.

It said the funds could then be used for a deposit on a first home, used to pay for tertiary education or shifted into an adult KiwiSaver account.

Party co-leader Metiria Turei said parents would be able to opt out of the scheme if they wanted, but it would automatically start so there were no forms for them to fill out.

She said the country had a poor savings culture.

"If a young person gets to 18, they've got $13,000 - $14,000 in their KiwiSaver, if they keep that KiwiSaver account open and turn it into an adult one, they get a job at a living wage, from that point on by the time they're 35, they'll have over $100,000 in that KiwiSaver scheme."

Mrs Turei said the Government was welcome to use the policy in its upcoming Budget.

But Prime Minister John Key said policy would be unaffordable describing it as artificial and expensive.

"It would be essentially saying for one set of kids we're going to set you up with this massive nest egg and for everyone else you're on your own."

He said there were already many entitlements for less well off children such as interest free student loans, and student allowances that never need to be repaid.

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