#1 - Karen 2007-05-18 14:57 - (Reply)

On reading Key Notes No 10 I wanted to make a short reply on the Kiwisaver comments in regards to its effect on ‘low to middle income’ earners. I would rate myself in the group low to middle income earner. I am a home owner and a single parent of two children who are dependant on me. I work part-time hours so as to be available to my children after school (child care for under 14’s is very expensive), for both financial and personal reasons I choose to work a 30hr week so my family have the availability of their one parent when they need. I qualify for Working for Families Tax Credits and also for an Accommodation Allowance from Work and Income. One of my children also qualifies for a disability allowance for medical reasons. I would in no way consider myself ‘well off’ financially and have to be careful with my finances. Therefore I consider myself to be one of the people you say would most likely be unable to afford Kiwisaver. However I believe through my own experiences (from being on the DPB to working in different jobs over the past 4 years to provide for my family) that everyone can afford Kiwisaver at a 4% savings rate. They may choose to spend their 4% in some other way than saving, but I do believe with some re-looking at ones budget and making choices that are financially wise the average ‘low to middle’ income earner can take part in this scheme. I most certainly already save more per week than 4% and if I choose to start up a Kiwisaver scheme I would have no problem making my weekly contribution, and therefore benefiting from both my employers matched contribution and the governments $20 per week. (Which is my tax money, coming back in part to me). I believe that Working for Families and other financial help available to the low income earner DOES offer opportunity for New Zealanders to get ahead. Without these opportunities provided I most certainly would be in a lesser financial position and struggling to move forward. I would then be unable to take part in such schemes as Kiwisaver offers. This has totally been made possible by the system the government currently offers, I have had no financial windfalls, no inheritances, no other help but what is on offer and I believe I have used it wisely thus far. I am positive about my future and my retirement options. I will have enough to support my lifestyle above and beyond any pension on offer when that time comes. The system is working for low income earners if they make it work for themselves.