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Building trust in financial markets - Workplace Savings NZ

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Fuseworks Media
Fuseworks Media

The Government has a golden opportunity in this year's Budget on 19 May to continue to build trust in New Zealand's financial markets by not tinkering with KiwiSaver benefits.

That's the view of Workplace Savings NZ, the voice of workplace savings.

Chairman David Ireland says the industry considers it highly likely that KiwiSaver incentives are at the top of the list of the Government's savings targets in the upcoming Budget, and another casualty might be the first home deposit subsidy from Housing New Zealand.

Given the current economic climate, he accepts the need for the Government to look carefully at the full range of its spending priorities.

However, he feels a Government decision that resists any temptation to make major inroads into KiwiSaver benefits would signal to both savers and the business community that they can have confidence in the sustainability of our savings framework.

There are currently 1.65 million New Zealanders who are using KiwiSaver as a preferred savings vehicle, with over $8 billion locked away.

According to Ireland "Both savers and the industry need to have confidence in the sustainability of current and any future savings initiatives if that savings success story is to continue."

David Ireland says that whilst the Savings Working Group came up with a range of possible options for Kiwisaver, there has been minimal consultation with the industry about the effectiveness and impact of those options.

"We hope the lack of consultation is an indicator the Government will stick with its existing policy, and not make a short term decision, in light of current economic pressures, that will have negative long term consequences on workplace savings."

It would also show the Government continues to have regard for its long term objectives, whatever way the economic winds are blowing at any given time.

"Actions speak louder than words: all the talk about the need to increase the level of New Zealand's savings to address the pressures caused by an ageing population would count for nothing if the lifeblood for KiwiSaver is cut off.

"Damaging trust and confidence now may have a permanent impact on how New Zealanders save for their retirement," he says.

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