The Press

Collins hits out at critics

- John Anthony

National Party leader Judith Collins has hit back at KiwiSaver providers’ criticism of a scheme that would let the newly unemployed draw down

$20,000 from their KiwiSaver accounts to start a new business.

The BusinessSt­art scheme would also provide tax credits worth up to

$10,000, which people who had lost their jobs since March could invest in their venture.

National said the scheme would cost $97 million.

Collins said KiwiSaver was money that people had ‘‘put aside for a rainy day’’ and they should have a choice whether they invested it with fund managers or in their own business.

Rupert Carlyon, founder and managing director of KiwiSaver fund provider Ko¯ ura, said National’s proposal to open up KiwiSaver for small business capital was a bad idea.

‘‘I think it’s nuts,’’ Carlyon said. KiwiSaver was supposed to be a safe backup plan for retirement, he said.

‘‘It’s not sitting there to fund everything else in life.

‘‘Putting up more and more ways to get your money out just means people are going to have less and less money in retirement.’’

Using KiwiSaver to start a business was a high-risk propositio­n, due to chances of the business failing, he said.

Milford Asset Management head of KiwiSaver Murray Harris said it was dangerous for politician­s to view KiwiSaver as a ‘‘rainy day fund’’.

‘‘Its sole purpose and intention was for New Zealanders to save towards their retirement, and we shouldn’t lose sight of that,’’ he said.

But Collins indicated that, as a KiwiSaver provider, Carlyon had a vested interest in criticisin­g National’s scheme.

‘‘I’d like Rupert to tell New Zealanders why they shouldn’t use their own money to invest in their own business,’’ she said.

‘‘Rupert is only the first feechargin­g funds manager to tell Kiwis who intend starting a new business that he knows how to invest their money better than they do.’’

BusinessSt­art would not be ‘‘compulsory’’, she said.

‘‘It’s for Kiwis with an idea that their accountant or financial adviser has profession­ally assessed can be made to fly.

‘‘Fund managers like Rupert should remember that the Kiwis who [would] use BusinessSt­art don’t have a job and can’t contribute to their funds, or any other fund,’’ she said.

BusinessNZ chief executive Kirk Hope said BusinessSt­art was a thoughtful approach to helping small business startups in the wake of the

Covid-19 crisis.

Prime Minister Jacinda Ardern said the Government already had alternativ­e schemes to help people who wanted to set up new businesses.

They include grants of up to

$10,000 available through the Selfemploy­ed Start-up Payment Scheme.

The Social Developmen­t Ministry said it did not have figures to hand on how many applicatio­ns for such grants had been approved or declined in recent years, or what the average grant was.

Generally, individual­s are eligible to withdraw all their KiwiSaver funds when they reach 65 years old.

Individual­s who have been in KiwiSaver for at least three years may also be able to withdraw some money to put towards buying a first home, or land to build a first home on.

People can also apply for an early withdrawal if they are suffering significan­t financial hardship.

As at March, there were 3 million people enrolled in KiwiSaver.

Collins said a lot of KiwiSaver money was sitting in default funds or held in foreign shares.

‘‘National says it may be more valuable to you invested in your own business.

‘‘It’s your choice whether to leave it with the fund managers or invest it yourself.’’

Collins told RNZ that, as someone who had started and sold businesses in the past, she knew how hard it could be to get one started.

It was particular­ly difficult to start a business if the owner had nothing to borrow against, she said.

Collins said many people would have $20,000 in their KiwiSaver that could be used as seed capital for a new business, under National’s policy.

‘‘It’s an opportunit­y to give people a second start.’’

 ?? MONIQUE FORD/STUFF ?? National Party leader Judith Collins says people may want to use their KiwiSaver money to start businesses.
MONIQUE FORD/STUFF National Party leader Judith Collins says people may want to use their KiwiSaver money to start businesses.

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