Make KiwiSaver universal: Labour
Labour is reigniting calls for KiwiSaver to be made universal, after research shows the New Zealand Super Fund could have been worth $278 billion had it not been scrapped in the 1970s.
The scheme was brought in by the Labour government in 1974, but was infamously scrapped the following year by Prime Minister Sir Robert Muldoon shortly after National was elected into Government.
Research released yesterday by economic consultancy Infometrics, estimated it would have been worth $278b by April next year if it hadn't been axed.
Labour leader David Cunliffe said New Zealand was still paying for Muldoon's decision.
"Rob Muldoon grabbing the Super Fund money for his own purposes was clearly the worst decision in New Zealand political history.
"Imagine that we had $300 million (sic) - that's one and a half times our entire GDP - in the savings pot now, think of all the business growth that could be funded by that, and think how much less dependent on foreign capital we'd be and how much better of in terms of less international debt we'd be," he said on Firstline.
But some of the damage could be "partially offset" by boosting KiwiSaver and restarting contributions to the New Zealand Superannuation Fund.
The Government temporarily stopped contributions to the Super Fund in 2009 but planned to resume them in 2019.
That timeline was pushed out by Finance Minister Bill English at last year's budget, to the 2020-21 financial year.
In the year to June 2012, the Super Fund lost $645m based on what it could have saved by paying off debt instead.
Cunliffe said the fund made a straight profit of $2.2 billion last year.
"The current National Government, just like that previous National Government, has been penny-pinching with long-term savings.
"They cancelled contributions to the superannuation fund, a fund that made a $2.2 billion profit - almost a 20 per cent growth last year."
He said making KiwiSaver universal would be a key Labour policy going into the election.
"Because it's good for the country and it's good for individual New Zealanders. The average working person would have saved over $500,000 by the time they retire if they start when they first join the job market."