Kiwisaver fears for Wairarapa business

Wairarapa Chamber of Commerce CEO Stephanie Gundersen-Reid says compulsory KiwiSaver would have a "huge impact" on Wairarapa businesses.

Wairarapa businesses will suffer financially if KiwiSaver is made compulsory for all workers, a local business leader says.

Labour said in December it would raise the age of eligibility for New Zealand Superannuation to 67, make KiwiSaver compulsory for employees and increase the contribution rate, if voted into power.

Deputy Labour leader David Parker said newly released Census data backed the decision - with the number of people in the 50-59 age bracket jumping by 22 per cent since 2006 to 989,000.

"Although the total population increased, fewer people are under 15 than in 2006 and this reinforces the need to address superannuation."

Paying for superannuation cost more than all benefits combined and, within two years, he expected it to exceed the annual spend on education.

However, Wairarapa Chamber of Commerce chief executive Stephanie Gundersen-Reid said making KiwiSaver compulsory would have a "huge impact" on local business, which would struggle with the extra costs of employer contributions to the state-run savings scheme.

"Businesses are already paying for so much. You've got the four-week holiday now. There is a lot of financial pressure on business and that would just be another added bit."

The age of retirement should also be up to the individual, she said.

"I don't think that forcing anyone to do anything is a good idea. Sixty-five is still young but it should be up to the person themselves if they want to continue working."

Labour has proposed raising the NZ super eligibility age from 2020, increasing it two months at a time to reach 67 by 2026.

The party would also make KiwiSaver compulsory for those in employment. It would be optional for the self-employed and those without an income.

The National-led Government put off automatically enrolling all employees in KiwiSaver because of the cost.

Labour would also look to change the default setting from the minimum contribution to an age-appropriate one, something the Government recently rejected.

Business New Zealand chief executive Phil O'Reilly backed raising the super eligibility age to 67 and said it was unfortunate the issue had become a political debate.

"I don't hear many voices at all who don't agree with raising the minimum age for superannuation."

However, making KiwiSaver compulsory was not necessary, Mr O'Reilly said.

"For some workers that's likely to be negative. It might be that you're saving at the wrong time of your career. If you're on a minimum wage, it's probably a good idea to spend that money."

Caution was needed when making anything compulsory.

"A lot of the evidence around this tends to be that apparently KiwiSaver will improve net savings among New Zealanders. Well there's no evidence of that." APNZ