Businesses pressure Nats over KiwiSaver

National is under pressure from business groups to let them offset KiwiSaver contributions against wage rises after it was forced into an admission over compulsory employer contributions.

A day after a bungle forced the admission that National would retain compulsory employer contributions, National MPs have gone to ground on KiwiSaver, leader John Key and finance spokesman Bill English refusing yesterday to spell out what else National had planned for the scheme.

Industrial relations spokeswoman Kate Wilkinson also failed to return calls and a Party spokesperson said she had nothing further to say.

Ms Wilkinson got into strife on Tuesday when she said National did not support compulsory employer contributions – worth 1 per cent of salary at present and rising to 4 per cent by 2011.

Mr Key was forced to correct Ms Wilkinson and confirm National's plan to keep compulsory payments in place.

The party has been under pressure to scrap the employers' component by business groups annoyed at the Government's decision to make them compulsory.

Business New Zealand chief executive Phil O'Reilly said yesterday that businesses felt betrayed over the way the Government imposed compulsory contributions.

"The problems associated with KiwiSaver since then are reflective of that poor process and we'd want assurance of better consultation in future."

The business community's reaction to National continuing with compulsory co- contributions would depend on what else was in its KiwiSaver policy, Mr O'Reilly said. "We'd want to ensure employers could take co-contributions into account in pay negotiations to sensibly manage wage and salary costs."

The Government reacted angrily last month to reports that some employers were offering lower pay rises to workers in KiwiSaver and pocketing the employer tax credit of up to $20-a-week.

The Labour Department is investigating three companies over the practice.

- © Fairfax NZ News