Savings campaign backed, urged to go further

Media statement Thursday, July 31st, 2014

Savings campaign backed, urged to go further

The Employers and Manufacturers Association is backing the campaign for cutting taxes on KiwiSaver earnings, but says it should go further.

"The campaign to cut taxes on KiwiSaver and other long term earnings is on the right track," said Kim Campbell, EMA's chief executive.

"But it doesn't go far enough.

"EMA backs the campaign because its good for business investment as well for as those making the savings.

"Businesses need Kiwis to save more so we have a bigger domestic pool of funds with which to build stronger businesses.

"Doing this also means less reliance on borrowing overseas, and helps keep interest rates down.

"Recent OECD data showed New Zealand has conspicuously low household saving rates and high interest rates.

"The government has repeatedly said we need to save more. For instance Finance Minister Bill English said last year: 'New Zealand as a whole needs to save more, spend less and reduce its heavy reliance on foreign debt.'

"The tax levels on KiwiSaver earnings suggest differently.

In our election manifesto (June 24th) we said the tax rate on KiwiSaver and other long term savings should be cut to 15 per cent (as in Australia) and the $541 KiwiSaver tax member credit axed.

"We want to see savings encouraged, not penalised."

ENDS

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