Superannuation and Kiwisaver measures must be applauded

27 October 2011

The New Zealand Manufacturers and Exporters Association (NZMEA) is applauding Labour’s proposed measures to increase saving and raise the age of entitlement for national superannuation. Compulsory savings will help to lift the savings rate and offer a source of much needed New Zealand based investment. The decision to raise the entitlement age for national superannuation addresses the potential fiscal crisis presented by an ageing population.

NZMEA Chief Executive John Walley says, “There has been a lot of talk about incentivising savings and investment, and fiscal prudence over the last electoral cycle, it is good to see these issues finally get some serious attention.”

“As we have seen in Australia compulsory savings will increase savings levels and increase local investment. On shore investment will reduce foreign borrowing which will help take some pressure off the exchange rate.”

“Lifting the entitlement age is also a welcome initiative although a faster rise could have been introduced. An entitlement age that is a percentage of average life expectancy seems to be a logical way to take some of the political steam out of this issue. As life expectancy grows the entitlement age should move with it. The demographers show us the fiscal time bomb is out there, the sooner action is taken, the smoother the introduction.”

“Labour must be applauded for grasping the nettle on these two issues.”

ENDS

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