3 Aug 2011

PM signals expansion of KiwiSaver to existing workers

7:18 pm on 3 August 2011

Barely months after cutting tax incentives for KiwiSaver, the National-led Government is considering further changes which could cost it up to $1 billion.

Prime Minister John Key signalled on Wednesday the Government is now considering the automatic enrolment of every employee in the savings scheme.

The Treasury is preparing a paper looking at automatically enrolling all workers, not just when they get a new job.

There are 1.7 million people in KiwiSaver at present. Mr Key says if the Government automatically enrolled every worker that could catch about another 1 million people.

That could cost $1 billion if every person stayed in KiwiSaver, but Mr Key believes not all would stay in the scheme and some would opt out.

The Prime Minister says the expansion of KiwiSaver could be linked in some way to offering people the opportunity to buy shares in the state-owned companies National intends putting up for partial sale.

He says the Treasury is looking at ways of encouraging KiwiSaver account holders to retain ownership of those shares.

The Labour Party's finance spokesperson, David Cunliffe, says given that the Government has cut the New Zealand Superannuation Fund and KiwiSaver, the public would have no confidence in its latest position on savings.