Plans to trim KiwiSaver and Working for Families in next week's Budget are being supported by Western Bay business and community leaders.
In a pre-Budget speech at a Business New Zealand meeting in Wellington yesterday, Prime Minister John Key confirmed there would be changes to the schemes because they weren't sustainable
in tough economic times.
Mr Key and Finance Minister Bill English said at the meeting that this year's deficit would be the worst in New Zealand's history, at more than $16 billion.
Mr Key has not revealed details about the cuts, but confirmed that less would go into KiwiSaver accounts from tax credits and more from individuals and employers, with the $1000 kick-start for new members remaining.
Mr Key said Working for Families would become "a little less generous to families higher up the scale", but will be changed gradually to minimise the impact on families.
The student loan scheme would be tightened but remain interest-free, with a more aggressive approach to recovered unpaid debt from those living overseas.
Tauranga Chamber of Commerce chief executive Max Mason said government spending increased by 50 per cent in five years and the nation's current income was insufficient to balance the books.
"This means we need heavy overseas borrowing. To reduce this massive debt we need to cut government costs, and some changes to Kiwisaver, the Student Loans Scheme and Working for Families will help do that."
Mr Mason said the changes would come into effect after the election in November, so people could vote on whether they wanted them.
Priority One chief executive Andrew Coker said his organisation was broadly supportive of the proposed changes.
"There is no doubt the global financial crisis and the effects of the Christchurch earthquakes are going to impact on us as a country for some time to come."
Tauranga Household Budgeting Service manager, Marjorie Iliffe, said it was too early to comment on the KiwiSaver cuts without the exact changes being revealed.
"But the problem with KiwiSaver is it is a double-edged sword and while some commentators are suggesting it will be equivalent to a wage rise, that is a smokescreen, as for those employees already struggling and having to always count their pennies each week, every dollar counts and any cuts hit their pay-packet hard," Mrs Iliffe said.
