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Around a million workers who have not signed up to KiwiSaver
could be enrolled automatically in proposed Government
changes. 

Currently, new employees sign up to the scheme when they start a
new job, but those who have been working in the same place since
KiwiSaver started have never been forced to join.

Prime Minister John Key said today the Government is considering
targeting those workers and any change will be included in a
discussion paper to be made public in the next few weeks.

“There may be as many as a million people in the work force who
aren’t engaged with KiwiSaver,” he told ONE News.

He suggested those people could be brought into it “through
maybe an auto-enrolment scheme, where they can opt-out if they want
to”.

If all those workers then stayed in the scheme it could increase
the cost of running it by more than a billion dollars, as the
Government has a $1000 “kick-start” payment it gives to each new
saver.

* Political Editor Guyon Espiner has more detail on the
plan on ONE News at 6pm.

Key said Treasury is looking into the actual cost of the
idea.

“There’s a lot of different costs there – there’s costs from the
perspective of the companies matching it, and there’s costs from
the Government’s matching as well,” he said.

“I don’t think the million people will stay in the scheme, so
they’d only get the $1000 if they stay in.”

Key said getting more people enrolled in KiwiSaver is a “good
thing” and the extra boost to accounts could go hand in hand with
the proposed sale of Government shares in utility companies.

He said if the partial sale of state owned enterprises goes
ahead after the election, the KiwiSaver accounts would be offered
the opportunity to buy up the shares.

“We like the idea of mixed ownership. We think it’s great that
New Zealanders should be able to buy into these companies like
Meridian and Mighty River Power,” he said.

“If we could get an even bigger pool of KiwiSaver accounts that
means these companies are held in New Zealand hands in the long
term.”

The Prime Minister said KiwiSaver has been very successful and
if national savings could be lifted it would make New Zealand less
dependent on foreign borrowing.

Currently 1.7 million people are enrolled in the KiwiSaver
scheme and Key said new people are joining up at the rate of 20,000
a month.

He said a Treasury report on the possible auto-enrolment plan
has been in progress for a “wee while”.

Savings Working Group rejected compulsory
KiwiSaver

The Government’s Savings Working Group looked at compulsion but
shied away from it.

The Government announced in the May Budget it would look at the
working group’s call for “a one-off enrolment exercise” and discuss
with employers how it could be done without unnecessary compliance
and administrative costs.

Labour is calling the Government’s proposal to make KiwiSaver
enrolment automatic a political ploy.

The party’s finance spokesman David Cunliffe said he believes
the Government is trying to take back some policy ground because
Labour is leading the argument on savings and tax.

He said the Government lacks credibility on savings as its
record so far around KiwiSaver has been to cut it.

Labour leader Phil Goff said earlier that his party was looking
at ways to create a more “universal savings scheme”, but he refused
to give details.

KiwiSaver had been universally available, but not universally
taken up, he said.

There were problems extending it to everyone, because many
people did not have spare cash to put into savings.

“There are a whole lot of New Zealanders that are struggling
just to meet the day-to-day bills, that actually don’t have the
ability to put money aside for savings.”

Labour is expected to announce a detailed savings policy as a
key plank in its election campaign.

What do you think? Have your KiwiSaver say on the
messageboard below.

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