Kiwisaver has entrenched inequality for future retirees
.jpg)
KiwiSaver’s much-lauded retirement savings scheme is entrenching inequality for future generations of retirees, according to income equality project Closing the Gap spokesperson project Peter Malcolm.
Closing the Gap is an organization with over 2,000 supporters which aim is to address the high levels of social problems primarily inequality in New Zealand.
As KiwiSaver turns 10, cuts to the scheme and rising cost of living and low wages all add up to how it has been virtually impossible for people on lower incomes to contribute.
“This is a gap that will follow all of us into our retirements, exacerbating inequality for years to come,” Malcom said.
Of the total 2.7 million KiwiSaver members, more than 40% aren’t making any contributions.
KiwiSaver expert and columnist Mary Holm, in a previous statement, said that in terms of wealth distribution, KiwiSaver has “arguably increased the disparity between the poor and the rich.”
Malcolm said feeding that inequality were current abatement levels — how much benefits and tax credits are cut as paid work increases — which can be a huge hurdle to people on low incomes.
"We've heard from single parents on benefits who find the cost of things like transportation to a job and child care mean they'd be better off not moving into the paid workforce," Malcolm said.
"As for contributing to KiwiSaver, that's simply unreachable."
KiwiSaver is a good idea that will only work if it is part of a set of tax policies that ensure all New Zealanders can contribute and benefit from it, not just middle and upper income earners, Malcolm said.
Closing the Gap is an organization with over 2,000 supporters which aim is to address the high levels of social problems primarily inequality in New Zealand.
As KiwiSaver turns 10, cuts to the scheme and rising cost of living and low wages all add up to how it has been virtually impossible for people on lower incomes to contribute.
“This is a gap that will follow all of us into our retirements, exacerbating inequality for years to come,” Malcom said.
Of the total 2.7 million KiwiSaver members, more than 40% aren’t making any contributions.
KiwiSaver expert and columnist Mary Holm, in a previous statement, said that in terms of wealth distribution, KiwiSaver has “arguably increased the disparity between the poor and the rich.”
Malcolm said feeding that inequality were current abatement levels — how much benefits and tax credits are cut as paid work increases — which can be a huge hurdle to people on low incomes.
"We've heard from single parents on benefits who find the cost of things like transportation to a job and child care mean they'd be better off not moving into the paid workforce," Malcolm said.
"As for contributing to KiwiSaver, that's simply unreachable."
KiwiSaver is a good idea that will only work if it is part of a set of tax policies that ensure all New Zealanders can contribute and benefit from it, not just middle and upper income earners, Malcolm said.
