KiwiSaver: fewer kids signing up
Removal of Govt kickstart leads to drop-off in subscribers, says Labour
The number of under-18s in KiwiSaver has dropped slightly in the month since the Government removed the $1000 kickstart in May’s Budget.
Inland Revenue figures to the end of June show that 368,079 under-18s were in the savings scheme — a drop of 551 since May.
Labour’s finance spokesman Grant Robertson said it was the first time more under18s had dropped out of the scheme than had joined it.
Mr Robertson said it proved that removing the kickstart was a disincentive to saving, despite the Prime Minister’s claims that it would “not make a blind bit of difference”.
Revenue Minister Todd McClay said the drop in under18s had been anticipated.
“As expected, the removal of the one-off $1000 kick-start has reduced the incentive to register children in the scheme.”
He said the value over a lifetime of the employer contributions and the annual $521 tax credits still provided strong incentives for working New Zealanders to join.
Over all ages, the number of people in KiwiSaver increased by 11,000 in June to 2,530,919.
Finance Minister Bill English said there was an increase of 11,656 in the number of working-age New Zealanders, a group the Government had not expected to be impacted by the removal of the payment. However, he said it was only one month’s data and the impact would be clearer over time. The numbers joining were lower than in May when 14,657 joined.
Mr Robertson said new enrolments were 29 per cent lower than the average over the previous 12 months and a decline in the number of people who voluntarily joined the scheme, rather than through auto-enrolment — down by 35 per cent on the average.