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Cunliffe says Labour will lead savings increase

Contributor:
Fuseworks Media
Fuseworks Media
David Cunliffe
David Cunliffe

Wellington, Aug 26 NZPA - Labour will lead the way on increasing savings, opposition finance spokesman David Cunliffe says, but he did not detail how.

In a speech to the Workplace Savings conference in Christchurch this morning, Mr Cunliffe said the New Zealand Super Fund should underpin retirement incomes and must be pre-funded to ensure it continued to do so over the long term.

"The Super Fund, along with prudent fiscal management ... is Labour's policy," he said.

The government must make its contribution to national savings by avoiding running persistent deficits, he said.

"Labour, in office, paid off the net debt."

Labour would also boost KiwiSaver.

Increasing employer, employee and government contributions or making it compulsory were two ways to do that, Mr Cunliffe said.

"The public debate about compulsion tends to over-simplify a complex problem.

"A truly compulsory scheme is one that everyone must enter and no one can exit."

Rather, Labour was considering changing the exit provisions -- including the early opt-out option for new KiwiSavers, he said.

KiwiSaver would be important for lifting national savings but people also needed other products to help them save, Mr Cunliffe said.

People had been scared off finance companies and retail investments with bad experiences and were heavily reliant on the housing.

"Providing new, relatively simple, relatively safe savings options for Kiwis could have a real part to play in increasing savings rates."

Labour has already said it would make infrastructure bonds available at retail level.

Mr Cunliffe said the party was looking at the link between saving and productive investment and had their own investigation into increasing savings.

Work on that was "well progressed" and would be announced soon.

Mr Cunliffe's speech comes days after the Government announced it was introducing a savings working group to examine how to increase national savings.

Finance Minister Bill English announced the terms of reference for the group, saying he was giving it a wide brief to consider national savings including government, business and private savings.

He has ruled out a capital gains or land tax and said New Zealand Superannuation isn't up for discussion.

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