19 Oct 2011

KiwiSaver stance queried

8:11 am on 19 October 2011

The Government's insistence that it cannot bring in automatic KiwiSaver enrolment for another four years is being questioned by a member of its own Savings Working Group.

If it is re-elected, the Government will automatically enrol all workers in the savings scheme in 2014, so long as the Budget has returned to surplus.

National says a one-off enrolment of all workers not currently in KiwiSaver, while still allowing them to opt out, would cost as much as 550 million dollars in its first four years.

Radio New Zealand's economics correspondent says the Government is reluctant to borrow those funds and will instead wait till 2014 when the Budget is forecast to return to surplus.

But Savings Working Group member Paul Mersi is disappointed the Government did not take up its recommendation that an up-front payment of $1000 for new KiwiSavers be paid over five years.

He says if that was done now, automatic enrolment would not wreck the Government's books.