KiwiSaver changes likely to delay pay increases

Tuesday, May 22nd, 2007

Last minute KiwiSaver changes likely to delay pay increases

The last minute changes to KiwiSaver announced in the Budget are alarming employers who are concerned about getting pay increases to their staff in time for the July 1st start date of the scheme.

"Announcing a major change to KiwiSaver so close to the start of the scheme demonstrates an ignorance of business practice," said Alasdair Thompson, chief executive of the Northern Employers & Manufacturers Association.

"Most employers have already finished pay reviews for the year ended March 31st, or are so well advanced with those for the financial year ending June 30th that the last minute changes are likely to delay pay increases.

"In addition, Government has foisted on business a whole lot of re-work.

"It's terrible for productivity.

"Business is concerned too that IRD will not be ready by the July 1st start date, which will build more uncertainty.

"IRD's official advice and publications on KiwiSaver don't yet cover the changes relating to employer contributions; we are advised that information won't be ready until just days before the scheme starts.

"How can employers hope to be up to speed when IRD isn't?

"Employers are also still not sure what to do over their casual staff.

"When KiwiSaver was first mooted over 18 months ago EMA cautiously supported it and continues to do so except for the complex variations tacked on without consultation.

"The timing and content of the last minute changes have soured the scheme's appeal.

"More trouble looms farther down the track when pay negotiations will have to distinguish between staff on KiwiSaver, and those who are not but who subsequently decide they want to take it up.

"The emergence of discriminatory pay is just one example of the unintended consequences from the last minute changes now confronting employers.

"We have presented briefings on KiwiSaver to over 3000 employers and expect to run more for another 3000.

"The feedback we're getting is they are not pleased, as much for the compulsory contributions required of them as for the lack of adequate notice.

"When told how the scheme is to work employers instant response is laughter and disbelief."

ENDS

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