EDITORIAL: Big cuts always on cards for KiwiSaver

So, it appears the country's financial chickens are finally coming home to roost.
The weeks immediately leading up to the unveiling of the Budget are used by Governments as a "softening up" period for the public, a time when some details are allowed to trickle out, in advance of the full announcement.
When the economy's doing well and there's plenty of money to throw around, the news is normally good, albeit with a caveat that the Government keeps its biggest tricks up its sleeve for Budget Day proper. But when things aren't so prosperous, some of the more dire news normally gets announced early, in order to soften the blow when the full financial plan is eventually revealed.
Such has been the case this time around, with Prime Minister John Key yesterday confirming one of the political beltway's worst-kept secrets - next week's Budget will include changes to KiwiSaver, Working for Families and interest-free student loans.
Political conspiracy theorists will find much to speculate on over the Government's chosen targets - KiwiSaver, Working For Families and the interest-free student loan scheme were all instigated by the previous Labour administration, and are arguably of most benefit to the socio-economic group that traditionally votes with that party.
Mr Key's Government has its detractors, and it's those people who will hail yesterday's announcement as just another sign of a right-wing Government beginning to show its true colours. But the reality is that something had to give.
Even the most one-eyed critic can see that a deficit of more than $16 billion, coupled with Government borrowing of $380 million a week, is not sustainable.
The angst will come from where the Government has chosen to make cuts.
Mr Key announced yesterday the Government intended to reduce KiwiSaver's member tax credit - the 2 per cent subsidy it pays to savers in the scheme - in order to make it more affordable.
Individuals and employers will be expected to make up the difference, with the amount of tax credit reduction to be announced in the Budget.
Employers may react to the changes with some disquiet, but National will be banking that its traditional core of business sector support will nevertheless remain strong.
KiwiSaver was always likely to be targeted if financial times got tough, and in any event, was introduced as a means to encourage New Zealanders to save and break the debt trap so many people found themselves in.
There's now been plenty of time for that savings habit to develop, and putting the onus on people to take greater responsibility for their future financial security is a good thing.
Feedback: editor@wanganuichronicle.co.nz.