National puts $15 billion price tag on Peters’ compulsory KiwiSaver plan

Finance Minister Nicola Willis and Deputy Prime Minister David Seymour have poured cold water on plans by NZ First leader Winston Peters to campaign for compulsory KiwiSaver at next year’s election and hike minimum contributions from both employers and employees from the current 4% to 10% and, eventually 12%.

Peters said KiwiSaver members and employers would receive tax cuts to offset the increase but Willis warns Treasury estimates put this tax cut at about $15 billion.

Peters’ proposal was “ambitious”, she told attendees at a Financial Services Council (FSC) conference this week in Auckland, but it was also fiscally unrealistic. It called for tax cuts that were four times the size of National’s tax package, she said.

Willis said compulsory savings regimes, such as Peters had proposed, worked in Australia where employees had higher disposable incomes. But for most New Zealanders, the number one concern was the cost of living and forcing them to contribute to KiwiSaver would be “a difficult conversation”.