'The government may well move to auto-enrolment for everybody' — Key on KiwiSaver
Today, Prime Minister John Key told Breakfast that people had a strong incentive to join KiwiSaver.
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The government has made another clear signal that KiwiSaver mass enrolment is on the way.
One KiwiSaver provider, ANZ, said on June 24 that enrolments have more than halved since the $1000 kickstart was axed on May 21 with Budget 2015.
Today, Prime Minister John Key told Breakfast that people had a strong incentive to join KiwiSaver.
"You’ve got to remember that if you go into KiwiSaver and you put in a dollar of your money, you get a dollar from your employer and you get a contribution from the government
Nothing else you could invest in, I’d suggest, could give you potentially a 100%+ return from day one before you do anything else," the PM said.
"So the incentives for people to join are huge."
But apparently not huge enough.
"What might be happening here is that when people signed up their children – because the $1000 was there – they weren’t necessarily making any payments and there’s less incentive to do that today. But also the government may well move to auto-enrolment for everybody."
While it moved to support auto-enrolment for those starting a new job (with an opt-out provision), the government has previously rejected mass auto-enrolment for everybody with an existing job as too expensive.
However, just days after Budget 2015, Finance Minister Bill English said the elimination of the $1000 incentive paved the way for an auto-enrolment initiative.
"We're... keen on this, what we call mass auto-enrolment, and that is auto-enrolling everyone who's not in the scheme, so that they then have the opportunity to opt out. With the kickstart payment no longer in place, that's much cheaper than it used to be."
This morning, Mr Key added, "it’s always been around affordability for us, and you’ve got to make sure that when you sweep everybody up, there is provision for those who genuinely can’t afford to be in or don’t want to be in to come out."
KiwiSaver was introduced by the Clark/Cullen Labour government in 2007.
Mr Key said there are now around 2.5 million savers in the scheme.
Chris Keall
Mon, 29 Jun 2015
Mon, 29 Jun 2015
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'The government may well move to auto-enrolment for everybody' — Key on KiwiSaver
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