Labour will also raise the retirement age from 65 to 67 and restart contributions to the New Zealand Superannuation Fund.
The proposals are fundamental changes to the savings landscape. They reflect clear policy differences between the two main political parties.
Labour’s universal KiwiSaver policy will also see employers required to increase their contributions from 3 percent to 7 percent, over time. Who actually bears this cost will depend on whether employers can offset the extra cost against employees’ future pay rises.
Agree with them or not, Labour’s announcements have put two important areas of New Zealand’s savings and superannuation framework into the election spotlight.
These issues not only need to be debated but also concluded. We hope this now happens.