30 Nov 2015

KiwiSaver auto-enrol plan shelved

5:47 am on 30 November 2015

The government's plan to bring in automatic enrolment in KiwiSaver for all workers is off the table for now.

Bill English on the bridge at Parliament.

Bill English said while the government was still keen on KiwiSaver auto-enrolment, it was off the table for now. Photo: RNZ / Alexander Robertson

Finance Minister Bill English said the government's surplus was too skinny and it could not afford it.

Just days after using this year's Budget to axe the $1000 KiwiSaver kickstart fund, Mr English indicated the government would look at bringing in mass-auto enrolment for the savings scheme.

At the time he said auto-enrolment would be cheaper without the kickstart.

Under KiwiSaver, people are enrolled when they start a new job. Mass auto-enrolment would mean everyone not currently in KiwiSaver would be enrolled and would have to opt-out if they wanted to exit the scheme.

Mr English said while the government was still keen on the idea, it was off the table for now.

"There are now such a significant proportion of the eligible population for KiwiSaver is already in KiwiSaver, that it wouldn't cost a lot to do auto-enrolment but could be administratively quite complex.

"So we'll keep it under review, and when there is more fiscal room we may have another look at it," Mr English told RNZ.

Labour's finance spokesperson Grant Robertson said it was another example of a lack of long-term-thinking by the National government.

"What we know is that there is still a cohort of people who are not in KiwiSaver and feel that they can't afford to be a part of it," Mr Robertson said.

"We want to make sure that everybody has dignity in retirement, that requires not only getting as many people as possible into KiwiSaver, but also continuing to pay into the Super Fund and making sure that New Zealand Super remains available to everybody."

New Zealand First leader Winston Peters said he was not surprised the government was backing away from mass auto-enrolment given its refusal to contribute to the Cullen or Super Fund.

"To get young people started, in particular people in the workforce into a savings lifestyle - this is sound policy.

"But they have contributed nothing by way of sound policy on that, and on the issue of the Cullen Fund as well."

Green Party co-leader Metiria Turei said it was all part of the government's plan to slow KiwiSaver to a stop.

"This government argued when they got rid of the kickstarter payment that there wouldn't be a reduction in KiwiSaver uptake, in fact there's been a significant reduction.

"The government also said at the time they would look at auto-enrolment as a way of softening the blow, but of course now they're not going to do it.

"Government wants to minimise their contribution to KiwiSaver in order to make real their wafer-thin surplus."

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