“It’s, of course, a way of keeping a lid on costs, and it also just aligns with the philosophy of a right-leaning government versus a left-leaning one, which is just less state support, and a little bit more take care of yourself.”
Perhaps suggesting it’s more about the political philosophy than cash flow, Tibshraeny says the savings from the KiwiSaver means testing, in particular, are meagre.
“The Inland Revenue reckons means testing that government contribution would only save $40 million a year. That isn’t much money at all for the government.”
She says the policy went against official advice.
“The officials advised the Government to just scrap the government contribution altogether rather than means test it. It would’ve gone down like a lead balloon with the public if politicians did that.”
In fact, that wasn’t the only policy that eschewed official advice. The Government was also warned against raising the default KiwiSaver contribution rate in the current economic climate.
“They were worried about the impact it would have on businesses and thought that it might actually offset some of the positives in terms of what the Government’s trying to do to stimulate growth and support businesses.”
Tibshraeny says means testing can annoy some voters, but in recent conversations she’s had with the new head of the Treasury, Ian Rennie, there seems to be an appetite for it.
“He talked a lot about the need for means testing, and I just guess the cost of having all these universal policies - the Government giving money to people who don’t really need it.”
Listen to the full episode of The Prosperity Project for more
The podcast is hosted by Nadine Higgins, an experienced broadcaster and a financial adviser at Enable Me.
You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify, or wherever you get your podcasts. New episodes are released every Monday.
