Prime Minister John Key has said that an expert panel is to be appointed to look into all aspects of retirement savings in New Zealand, but that compulsory superannuation may finally be necessary.
The Prime Minister is concerned at the low level of savings in the country, which is coupled with a very high level of foreign debt taken on by the private sector. He believes that there is no choice but to encourage people to save significantly more.
The government is therefore proposing to establish a retirement savings advisory panel to look into all aspects of the problem, on the same lines as the previous Tax Working Group. It is possible that the new panel will also be run by Wellington’s Victoria University.
While the KiwiSaver voluntary pension scheme has been successful to a certain extent, it is likely that the government will have to consider making retirement savings compulsory. Tax incentives would be likely to form part of a new superannuation package, including the provision of tax credits to make any scheme acceptable to low and middle-income earners.
While Key has made it clear that the government was not close to making a decision, it has been suggested that such a measure could form part of its manifesto for the general election due next year.
A comprehensive report in our Intelligence Report series titled "The Lowtax International Pensions Report" which has an in depth view on The Mechanics of Pensions Provision, 'High-Tax' Country Pension Regimes and 'Lowtax' Jurisdictions In Which To Locate Pensions Savings, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report14.aspTags: tax | investment | individuals | retirement | pensions | New Zealand | tax credits
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