National Party finance spokesperson Nicola Willis says the party recognises its suite of KiwiSaver policies announced on Sunday have potential implications for existing employment agreements - like those with a total remuneration approach.
National Party leader Christopher Luxon announced if re-elected in November, National would make KiwiSaver or an equivalent scheme compulsory for workers, automatically enrol every baby born in New Zealand along with a $1500 Baby Boost payment, and make a contribution into a parent’s KiwiSaver while they’re on paid parental leave.
On Monday afternoon, Willis told reporters at a post-Cabinet press conference that employers and employees with a total remuneration package agreement wouldn’t have envisaged increasing contribution rates and KiwiSaver becoming compulsory.
Total remuneration packages are when employers place their KiwiSaver contribution as part of a person’s salary. This means that employer and employee contributions are coming out of an employee's salary.
“We recognise that these are issues that we would need to work through in government, and we want to do that in a very consultative way, working with employers and employees," Willis said.
“And we recognise that legislative change may be required. So while yesterday’s announcement didn’t specifically propose an approach on total remuneration, we do recognise that these policy changes have implications for it.”
Asked whether there was anything a government could do to legislate around total remuneration packages, Willis said there had been, in the past, discussions about whether a total remuneration approach should be allowed going forward.
“And that is something that the government could legislate against. So, the question that we want to explore more broadly is, if you were to decide that you couldn’t take that approach in the future, what would the transition arrangements be for those who have already struck an employment agreement on the basis that those kinds of arrangements are currently permitted.”
Willis said they wanted to work through that.
In terms of rules, Willis said: “At the moment, [employers are] able to advertise a role with KiwiSaver included … which is a total remuneration approach, or in other instances, they advertise the salary with KiwiSaver on top.”
“So going forward, there could be more specific rules around how a company communicates the remuneration available to an employee for a particular role.”
Flip flop
Asked what he thought about the discussion on total remuneration packages, Labour leader Chris Hipkins said: “The National Party flip flop around on KiwiSaver all of the time … Their own track record speaks for itself.”
“They’re now proposing to increase contributions, where previously they’ve cut contributions - government contributions - which used to be quite a significant part of KiwiSaver and particularly for a lot of low-income families."
Asked whether they would commit to outlawing total remuneration packages, Hipkins said that was something Labour believed in and the party did not think that total remuneration packages should include KiwiSaver.
Hipkins said Labour would set out its KiwiSaver plan for the election in due course.
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