Kiwisaver and inequality

Labour's KiwiSaver will increase inequality and benefit the wealthy, according to the research and analysis of Professor John Gibson of the Management School at Waikato University. According to a report in the Herald, Gibson says that whereas NZ Super helped to ‘equalise lifetime incomes’ KiwiSaver will do the opposite. Apparently 45% of the working-age population earn below $30,000, but that group will only get 15% of KiwiSaver tax incentives. In contrast, the 11% of the the working-age population earning $70,000+ will receive 18% of the tax incentives. Interestingly, although the pro-National Kiwiblog supports KiwiSaver, it also agrees with this analysis and points out that essentially ‘Cullen has given CEOs who earn $1 million a year a $17,640 tax reduction’. See also John Minto’s earlier Press column entitled KiwiSaver opens way to privatisation of national super, which makes a similar argument. Minto says that because ‘Higher levels of savings attract higher government subsidies and higher returns for retirement… the benefits through KiwiSaver will be accrued to higher-income earners’. See also, this Press report on the maddening bureaucracy and poor customer service related to KiwiSaver: Woman's KiwiSaver experience 'a complete nightmare'