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Goff hints at universal savings policy that goes further than KiwiSaver, which was universally available but not universally taken up

Goff hints at universal savings policy that goes further than KiwiSaver, which was universally available but not universally taken up

By Alex Tarrant

New Zealand is a step closer to some sort of compulsory private savings scheme after Prime Minister John Key said the National-led government was considering a soft compulsion option for KiwiSaver and Leader of the Opposition Phil Goff said the Labour Party was looking at options for a more universal savings scheme.

Labour has indicated it will unveil a savings policy in the upcoming election campaign, and while National has so far stopped short of policies to push more people into KiwiSaver, Key today said officials were looking at ways to get those in the labour force not currently in KiwiSaver into the scheme.

One option for a more comprehensive savings scheme that does not require full compulsion is a 'soft compulsion' option put forward by the government-appointed Savings Working Group earlier this year, which would see people in the workforce, but not currently in KiwiSaver, automatically enrolled, although they would be given the option to opt out of the scheme.

In May while presenting the Budget, Finance Minister Bill English had said the government would look at this option, although at the time said the government "couldn’t see a good enough reason to move to compulsion [in this Budget]".

About one million people currently in the workforce are not in KiwiSaver, arising to questions of whether such a policy would therefore cost NZ$1 billion upfront, due to the government’s NZ$1,000 Kickstart scheme.

English said on Wednesday afternoon that he did not think the costs would be that much. People would still be allowed to opt out of the scheme.

“If people aren’t in Kiwisaver now, when it is a very good deal, then they might have quite good reasons for it. A big mortgage, just had another baby, one of them’s had to stop work. There’s any number of reasons, so we shouldn’t assume that the million Kiwis who aren’t in it, want to be in it," English said on Wednesday afternoon.

'In NZ's best interests'

Speaking to media at his weekly post-cabinet press conference on Monday afternoon, Key said in his view it was in New Zealand’s best interests to have the most number of people in KiwiSaver as possible.

"The government’s looking at how we could auto-enrol those people that are in the workforce but currently not in Kiwisaver. Whether it would be a good idea to make it compulsory, that was something we asked the Savings Working Group to look at, and they rejected that as an idea," Key said.

"They rejected it I think on the basis that it wouldn’t necessarily suit every person’s circumstances. Low income people might find it quite challenging to go in there, and obviously there would be an additional cost on the Crown,” he said.

The government was working on releasing a discussion document "fairly soon" which would look at how to auto-enrol people in the workforce but not currently in KiwiSaver, Key said.

Labour hints too

Labour Party leader Phil Goff earlier on Monday hinted at some sort of universal savings scheme policy that went beyond just a universally available scheme as KiwiSaver was now, but he was coy on further details.

Talking to media in Parliament this afternoon, Goff said there were a number of further options to the current KiwiSaver scheme that could be looked at, saying he would like to see a universal savings scheme in New Zealand. But there were problems to overcome first, as many people currently did not have any discretionary spending to be able to save some of their income.

Asked whether KiwiSaver meant there was already a universal scheme, Goff replied:

“It was universally available, but it wasn’t universally taken up. It was a great start, it’s 1.7 million people who are KiwiSavers.”

Asked whether therefore KiwiSaver would have to be made compulsory to make it more universal, Goff said:

“You’ve got a number of different options.”

"If we’d kept the Kirk fund back in the 1970s, we would have hundreds of billions of dollars to invest in New Zealand’s future. The difficulty we have at the moment is that there are a whole lot of New Zealanders that are struggling just to meet the day-to-day bills, that actually don’t have the ability to put money aside for savings. You’d have to overcome that problem,” Goff said.

“Ultimately I would like to see New Zealand move towards having a universal savings scheme, but there are a lot of problems to overcome before you can get to that point," he said.

Goff would not go further into any details on what Labour was perhaps considering along those lines. The party has already indicated it would release further economic policies in the run-up to the November 26 election, incorporating a focus on savings.

'Give RBNZ more tools'

Meanwhile, Goff said it worried him that the New Zealand dollar had gone through 88 US cents this morning, and was continuing to rise.

"What that does is put our export industries under real pressure, and that means a loss of jobs. We can ill-afford to lose jobs. I was talking to the timber industry the other day, and one of the CEOs said to me if we hit 90 [US cents], that could lead to the closure of just about every sawmill in New Zealand. That’s an example of how serious it is,” Goff said.

Asked whether it was perhaps time for New Zealand authorities to intervene in the currency markets in an effort to devalue the New Zealand dollar, Goff said that decision was entirely up to the Reserve Bank.

“It’s for politicians to tell them under the existing law. What we’d do is to change the law, to broaden the objectives of the Reserve Bank,  and to give them legitimacy around other tools other than simply interest rates,” he said.

Asked whether Labour would consider a tax on money flows into New Zealand, Goff replied the party had not put that idea forward.

“I that’s something that other countries like Brazil and Chile are currently operating, that’s something that might be given consideration in the future, but it’s not formally part of our policy at this point,” he said.

US deal welcome news

Goff welcomed news a compromise appeared to have been reached in US between parties on the government’s debt ceiling and deficit reduction talks.

“I believe that that’s always where they were going to get to. They couldn’t afford to damage their own economy, but if they had damaged their own economy that would have had implications right across the world," he said.

"The US is a third of the global economy, and the last thing New Zealanders need is to see their interest rates going up on top of all the other pressures they have on the rising cost of living.”

(Updates with video of Finance Minister's comments on cost, video of Key, comments from Key, video, with further comments on savings, NZ$ and US deal.)

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  You’d have to overcome that problem,” Goff said

And right he is too...NZ has to overcome the problem of incomes not reaching high enough to cover the rents and mortgage payments that shot through the roof during the Labour 9 years of waste and greater uselessness.

Oh it wasn't the rate that killed off so many and left most in the was a stupid taxation policy that encouraged the 'landlording' trend and the total lack of effort to throttle the property bubble....

So today Goff faces the mess he helped cause...and he hopes that blathering on about savings might win him some praise...and a few votes....dear oh dear.


Grateful for a bit more education please - What exactly was the "Kirk fund", was it the same sort of thing as the Cullen/New Zealand Superannuation fund? 

Ms de M, there's some good background in this article from Brian Gaynor -

I see, thanks, though I'm not wholly convinced. If you want to save, the absence of Government compulsion doesn't stop you. So the complaint is about other people not being forced to save. There are two reasons, not inconsistent with each other, to be opposed to compulsory saving.

One, as recognised by Goff here, is that not everybody can afford it - something which was presumably also the case for the "Kirk fund", such that yes, we might have much more money now if we'd been forced to save it then - but at the expense of greater financial hardship in the meantime.

The other is that people who can afford it, may have other uses for the money than locking it up in a Government fund, such as investing in their own or their children's education or starting up their own business.

Muldoon did some dumb shite

But ill give Muldoon credit for seeing the future as a non growth out come...

Muldoon I think grasped "peak everything" unfortuantly his approach to it was not very well thought out...

Aye agree at least Muldoon was 1/2 honest a 1/4 of the time the current crop are just a shiver!

While I read this article, at the same time there was a song played in our local radio station "Desperation" by the Eagles.  How appropriate!

And more coming from Alex on this: "PM Key says Nats going to look at soft compulsion option for Kiwisaver. Discussion document out soon."

Ignoring the jiggery-pokeried anti-Labour polls of the outfit that owns the Herald there is a lot of groundswell support for the CGT and proper savings policy. Phil Goff should step aside and let someone else run  with these because so much of the country would support these ideas but would prefer someone other than Goff. And definitely other than Key or the Nats.

Goff remains clueless. No one takes him seriuosly .He is the fool wants CGT to "prevent"  another property bubble. When you look at OZ which has got a  CGT and you see it did not prevent a bubble there and OZ has now got the  most expensive real estate in the ENGLISH SPEAKING WORLD !! 

He is a clueless idiot bumbling form one stupid utterance to the next .

Updated with some comments from Key

Why would anyone want soft compulsion.  I am well aware of Kiwisaver, I think its a terrible scheme so I have chosen not to enrol.  If I was automatically enrolled it would be a waste of mine and my employers time making sure I was unenrolled again.  And I'd imagine many of the 2 million odd people who havn't enrolled already would do the same thing.

If you've thought about it and made your decision, then it would indeed be a waste of time enrolling you. 

But not everybody who is not in KiwiSaver, has made that decision.  Some are not in KS, even though it would be to their benefit, because they haven't got round to it or because they aren't aware of how beneficial it could be to them.   This exercise would be aimed at them, not you. 

The trick for the Government is therefore to design a net that will catch them and not you - and good luck with that ...

Evening all. Keen followers of politics news on the site will have seen there were no videos from Welly for a couple of months. That was because the camera I was using (which might be older than me...) crapped out.

But now...

Have a new state-of-the-art hand held camera - the latest thing, so there'll be plenty of vids up from Parliament in the future.

FYI with today's vids, I tried some different settings on all three, and figure the best was the last one uploaded - on the Key NZ$ story here:

although it's still mono, but will have that figured out soon.

The one in this article from Goff is with a directional mic which seemed to work well.

So let me know what you think - hopefully sound problems are sorted out now, and picture quality's better too.



The Govt should be the one with compulsory saving!  Savers are being punished/taxed by inflation and regular tax, borrowers are being rewarded with near negative real interest rates.  What kind of evil b&stard would want to force the country the save, the biggest winners are the banks followed closely by govt.  Change the system so we actually benefit from saving and I would say it is a great idea, but currently the outlook is negative for savers and positive for borrowers.  What does either party know about saving, they both plan on borrowing now to pay for the future.  The Govt should have compulsory savings not be forcing everyone else to!

5% pay rises? The Government would go for that; as long as the 'pay rise' isn't given in cash, but must be put into the Kiwisaver Account of the employee on a weekley basis. Want that pay rise? Then you have to have a Kiwsaver account.....

Funny as a F....   Goofy's idea stolen by Key...any other freebees to give away Phil..!

So why didn't those questioning Key ask him to explain why his govt has allowed the RBNZ to debase the currency by 3 to 4% a year?......because they don't understand the game!

Key wants ppl to save so he says....but he also wants to wash away debts using debasement of the Kiwi$........what a rort.

Wally - what if Key knew what I put up here was the truth of it. That we are on the top of the curve, and incomes have to diminish from here on.

He also knows it's political suicide to broadcast this truth - you can see from the flat-earth types here what the result would be.

So - you make 'investing' compulsory. You make them 'invest' in something they already own. They're stupid - and greedy - enough to swallow it.

So their kiwisaver owns their energy generators - which they owned anyway - but then starts returning lesser and lesser dividends, then losses.

Thus you've lowered their incomes, and offloaded the blame.


"Truth of it"....I honestly dont think the top Pollies are stupid...key has made 50million?  I cant believe he's so blinkered he cant  see this stuff....mind you I suppose its possible.

"Political suicide" of course it is.....on the one hand its chicken little claim time unless all the parties say so at once.  On the other hand when a huge part of our economy is consumerism and there is nothing to replace it and the pollies have nothing.....

You can also instruct the compulsory kiwisaver managers to invest only in NZ, or Govn debt, or council even if no private investor would touch these, 'we" would be forced to and at a rate set by Govn, 3% say sounds fine.....I think thats a known issue with Spanish pension funds?

I used to like the idea of Kiwisaver but frankly its so open to abuse and I suspect so likely to be abused that really its tax by disguise.


Mr Key does indeed know. Key is in the in the club. Groomed at ML and the Fed.

The rest of the political rabble are not. Being lower level administrators on a need to know basis.

You have hit the nail right on the head PDK, the game will pan out something along what you have outlined imo.

It's obvious and is not rocket science to work out when you release old prejudices about and towards the true nature of things...

One prejudice I'd suggest subjects let go of is that there is a difference between the red and the blue team or the green team - There is no difference  its the same party!


On that score PDK you read too much into it...he's flogging off 49% of future power divs for quick cash to reduce his need to borrow the crap overseas and it's part of the long term effort to reduce the size of the state. The divs will not crash because he needs as much as he can squeeze out on the 51% the state will still own.

Kiwisaver is an endless 'Madoff' for the investment funds business shiney bums.

Wolly you are also correct but the time frame your in is a month or two or a year or or two.

The entities Key works for think in decades involving multiple levels and lashings of obfusication to diguise the Agenda, its reflected in the current world around you.

In our repeater type of education system most are taught short term thinking not long.

It's probably why as a soveriegn nation NZ has been unable to have a soveriegn nation plan longer than the next election...

Food for thought? I think so...


Plausible theory PDK......seems to be going that way.........maybe people should start looking for the spanner.

Have updated with video of the Finance Minister's reaction yesterday afternoon.

Great to see how the rest of the media has come onto this. It arose when questioning Phil Goff on Monday afternoon about the high NZ$ - I suggested one way to get around hot money flows coming into NZ was to increase the domestic savings rate, and he suggested he wanted something more universal than KiwiSaver currently was. 

Hence the headline focussing on what Goff says - that's all the story was originally (FYI we don't change headlines as urls then change)

Cue question to Key at Post-cab on Monday evening, and it's all off...

Yes, I sensed that the issue had been accelerated somewhat.   John Key is really saying nothing new - the documents that accompanied the Budget had all of what he was saying yesterday in there.   Interested into why a "discussion document" is needed, though.   Unless that is simply going to be "here's how it's gonna work" document.

Opt-out systems are usually used hoping that people would be too lazy or ignorant to opt out. 

It's condescending to assume that majority of the people who have not enrolled in Kiwisaver now are unaware of the benefits of Kiwisaver.

Not really.  There was some recent research (Colmar Brunton/AMP?) that concluded that the majority knew the benefits, knew they should join, but have simply not got round to it.

I'm not surprised by that.  The direct enrolment procedure via banks etc is a pain in the proverbial.  By far, the easiest way is to join via the employer.   It's just a really simple IRD form.  Then sit back and find out which provider the IRD gives you.  If you don't like that provider - then change.   But at least in the meantime you're in KiwiSaver and getting the benefits.

Whether or not Goff and/or Labour have a s**t show of collecting any additional votes as a result of the issues they've raised doesn't alter the fact that the issues have been raised and a lot of people are giving them some serious contemplation, much to the chagrin of John Key and the National Party bandwagon.