GOLDEN RULES

Central Otago Mirror - - FOOD FOR THOUGHT -

rob.stock@fair­fax­me­dia.co.nz

Just as fes­tive shop win­dow dis­plays in shops ap­pear in the run up to Christ­mas, so warn­ings to claim your KiwiSaver mem­ber tax cred­its pro­lif­er­ate in the weeks be­fore June.

Okay, I prom­ise this will be the last sen­tence in which I use that hideous, pro­foundly in-hu­man ‘‘mem­ber tax cred­its’’ jar­gon.

From here on I will call it a ‘‘bribe’’ to save into KiwiSaver.

But once again as my email in­box fills up with sea­sonal warn­ings from KiwiSaver providers, I am struck by the sad truth that there is a strong link be­tween the like­li­hood of a per­son col­lect­ing a bribe and the colour of their skin.

It’s more than an ac­ci­den­tal out­come of the ‘‘in­vis­i­ble hand of the mar­ket’’.

Yes, un­em­ploy­ment lev­els are lower, and in­comes gen­er­ally higher for Pakeha than for Maori or Pa­cific Is­land peo­ple.

But KiwiSaver is a re­cent­ly­con­structed bu­reau­cratic cre­ation.

This is not the equiv­a­lent of me call­ing Christ­mas racist be­cause sta­tis­ti­cally Pakeha house­holds Un­der­stand the KiwiSaver bribes Get your full KiwiSaver bribe

Don’t get frightened by the jar­gon

have higher in­comes to spend on presents and mince pies.

Peo­ple sat down just over a decade ago, and nut­ted the rules of KiwiSaver out.

Part of that nut­ting out in­volved the bribes, which are ba­si­cally the govern­ment chip­ping in free money on the pro­viso that peo­ple save into KiwiSaver.

Now those good peo­ple do­ing the nut­ting didn’t con­sciously con­spire to cre­ate a scheme where out­comes were cor­re­lated to skin colour.

Of course they didn’t.

The back story of KiwiSaver was the merg­ing of three po­lit­i­cal wishes of the then Labour govern­ment.

1. Lift the savings rate for the good of in­di­vid­u­als and the econ­omy. Great. Not racist.

2. Give peo­ple a tax cut. Great. Again, not racist.

3. Not to let peo­ple spend that tax cut, but in­stead use it to help cre­ate a long-term pool of re­tire­ment savings. Again, not racist.

The trou­ble is, the bribes paid to each KiwiSaver mem­ber were based on the amount they saved.

For some­one to get the cur­rent full bribe, they needed to stick in just over $1000 a year.

The bribe paid to an in­di­vid­ual is 50 cents for ev­ery dol­lar saved into KiwiSaver in the 12 months to the end of June. The max­i­mum bribe a per­son can get is $521.

Pretty easy for house­holds with higher in­comes to get full bribes.

Much harder for lower in­come house­holds and the un­em­ployed cop­ing with high rents as a re­sult of us stuffing up the hous­ing mar­ket.

A house­hold with two grown-up Ki­wiSavers want­ing the full bribe would need to set aside just over $2000 a year. Much eas­ier for a house­hold with an in­come of $100,000 than one with a house­hold in­come of $40,000.

ANZ told me this week it was work­ing hard to en­cour­age the roughly half of its 600,000 or so KiwiSaver mem­bers who have not qual­i­fied for their full bribe to take ac­tion and make a vol­un­tary one­off pay­ment into their KiwiSaver to get it.

I en­cour­age you all to try and get over that line, and per­haps have a word with your lo­cal MP about whether it was time to re­or­gan­ise the KiwiSaver bribes on a fairer, less ac­ci­den­tally racist ba­sis.

123RF

KiwiSaver is work­ing on ag­gre­gate bet­ter for Pakeha and Asian peo­ple than Maori or Pa­cific Is­land peo­ple.

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