Although I appreciate the need to improve saving habits among Kiwis I do not approve of using taxpayer money as an incentive. I don't have a KiwiSaver account. But I know people who oppose it in principle who have nevertheless taken advantage of the 'free' money. Apparently I am an idiot not to.
A study from Waikato Management School has shown however that as a scheme to incentivise saving it may not be very efficient.
The study found between only 9 and 19 per cent of KiwiSaver cash was new savings. "The rest is either reshuffling among existing saving and debt by KiwiSaver members, or else taxpayer and employer transfers which decrease national saving elsewhere," Prof Gibson said. "When the deadweight loss of tax incentives is taken into account, along with the administration, compliance and implementation costs, then KiwiSaver is likely to lower rather than lift national saving."
Great. Another grand redistribution plan failing to achieve its purpose. Another Labour policy supported by National.
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4 comments:
If having principles makes one an idiot- better an idiot than a bludger!
My kiwisaver fees are over $70,000 and Im not that young and I dont earn a lot. Another example of the govt shovelling money to the rich fat aussie bankers?
I have to admit that I joined kiwisaver just to get some money out of the govt, not that I particularly want it or need it, it was just the principle. As a 45year old, single, childless (cos I am sterile), tax payer I saw it as the only way I was ever going to get anything from this lot. On 16 Nov 2007 the IRD duly deposited $1020 into my kiwisaver account. Westpac has so far absconded with nearly $30 of it.
Murray
4% is big chunk of income when you have a mortgage and 3 nestlings to feed.
Shortening the term of your mortgage (increase you payments)will bring a bigger return.
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