KiwiSaver industry calls on government to provide certainty on the scheme and to stop making constant and costly changes

By Alex Tarrant

Certainty from the government on what plans it has for KiwiSaver would be nice, a group associated with the industry says.

David Ireland, a partner at Kensington Swan, and also chair of Workplace Savings NZ, says the constant changes to KiwiSaver have presented profitability challenges for the providers as they deal with new costs and the uncertainties that arise from government saying it will make changes to the scheme.

Finance Minister Bill English has indicated changes will be made in the upcoming May 19 Budget as government looks for ways to tighten public spending, but also promote private savings.

Yesterday, Ireland said the industry was worried government would make changes to some of the top incentives that have drawn people into KiwiSaver, such as Member Tax Credits and the Housing New Zealand First Home Deposit subsidy.

“From the industry side, there’s been constant change – every few months there’s another regulatory change providers have to deal with,” Ireland told interest.co.nz.

“In some ways you would like them to just do it in one sweep – ‘these are the changes, and then we’re going to leave it alone’,” he said.

Certainty would be nice, Ireland said.

“The only certainty we have at present is that there will be continuing uncertainty, because we don’t know what’s going to happen,” he said.

“It’s just been constant, constant change, so really hard for the providers – it just builds in layers of cost for the providers to respond to it [the constant change] which drags down the performance of KiwiSaver or the enthusiasm [for it].

That made the profitability equation for providers “fairly challenging,” Ireland said.

Asked by media whether the constant changes by government to KiwiSaver would be detrimental to the public’s perception of the scheme, Finance Minister Bill English said today he did not think so.

“People, if they want to save, they will save, and that’s what they’re doing. The good news is our savings rates are increasing, and we want to keep pushing in that direction,” English said.