16 Dec 2010

Report considers compulsory KiwiSaver and GST rise

10:13 pm on 16 December 2010

An interim report from a Government-appointed group looking at ways to boost national savings has left open the question of making KiwiSaver compulsory.

The Savings Working Group also thinks increasing the goods and services tax (GST) again might be worthwhile considering.

The head of the group, Kerry McDonald, now believes Australia's system of compulsory retirement contributions has increased that country's savings levels.

Mr McDonald says making KiwiSaver compulsory from the age of 18, or above certain income levels, might be worthwhile considering in New Zealand.

Automatic enrolment in the scheme, but with the ability to opt out, might also be recommended, he says.

Higher GST, introduced over a long period, is also seen as an option for boosting savings. The tax was raised from 12.5% to 15% in October.

The Savings Working Group delivers its final report to the Government in January.

Prime Minister John Key says some of the recommendations could be included the Budget.