KEY POINTS:
National was last night defensive about its KiwiSaver policies that would cut Government subsidies for some savers but not others.
But it conceded it might have set up inconsistencies elsewhere in the scheme that needed addressing.
The Weekend Herald has learned that 136,000 KiwiSaver members who are at
present getting the maximum Government subsidy of $1040 would not get it in full.
They would have to be earning more than $52,000 a year to get the full amount. At present they get it if they earn over $26,000.
The policy would also put KiwiSaver members who are employees and earning less than $52,000 a year at a disadvantage compared with other non-employees including the self-employed and adults not in the work force.
The first group would not get the full Government subsidy, but the second group could.
National finance spokesman Bill English acknowledged that there were problem areas in the policy on the non-employed but he could not assess the extent of it without being in Government.
He hinted that further changes might have to be made to the policy to iron out inconsistencies.
Asked if there might be changes to the member tax credit to avoid setting up inconsistency, he said: "We are not proposing that at the moment.
"We will certainly look at any administrative wrinkles in it if we become the Government."
However, Mr English was unapologetic about the effect of cutting the Government subsidy from a matching 4 per cent to 2 per cent - the policy plank that alters who can access the full subsidy.
Mr English said only a quarter of the working population had joined KiwiSaver and National had "rebalanced" the contribution paid to that group "in favour of lower taxes across a much wider range of people."
The problems arise from the fact that National wants, among other things, to cut the Government matching contribution from 4 per cent at present - up to a maximum $1040 - to 2 per cent - also up to a maximum of $1040. At present, a saver paying 4 per cent of pay into KiwiSaver reaches the maximum $1040 by the time they earn $26,000.
Because the matching Government rate would be cut to 2 per cent (as would the minimum saver contribution) savers would have to be on $52,000 or over to be entitled to the full Government contribution.
The changes to KiwiSaver, announced on Wednesday, amount to $3 billion of the cost of National's $15 billion tax package.
Most of the $3 billion savings from KiwiSaver would be from cutting altogether the tax credit the Government paid to employers.
