“Be bold, Minister” – Billions can be saved in Labour’s KiwiSaver subsidies

Finance Minister Nicola Willis has not ruled out ending Government KiwiSaver subsidies ahead this year’s Budget.

“Willis’ Government was elected to make hard decisions—ending Government funded KiwiSaver subsidies is exactly one of them” said Sam Warren, a spokesman for the Taxpayers’ Union.

“Make no mistake, the subsidies costs taxpayers hundreds of millions each year, diverting desperately needed funds from other services or urgently needed debt repayments.”

“A product of the Fifth Labour Government back in 2007, the subsidies hoped to encourage KiwiSaver participation and contributions—but with that comes its own problems.”

“Now that membership levels are near-universal, the subsidies themselves are redundant. They also distort behaviour as individuals with investments and savings elsewhere will opt for lump contributions annually to receive the $521 payment by government.”

“The programme also operates as a private savings scheme, making the subsidy a wealth transfer from taxpayers to savers.”

“Most will agree that propping up private savings is completely inefficient—the government should straight out prioritise tax relive and allow individuals to save independently.”

"Times are incredibly tough, and the books are in dire straights. It's a hard decision, but it's the right one to get the economy back in shape."