Labour has floated the idea of forcing KiwiSavers to keep their money in New Zealand, as well as making the scheme compulsory.
Labour’s finance spokesman David Parker raised the possibility of preventing KiwiSaver funds being moved overseas in an interview on TV3 programme The Nation on the weekend.
He mentioned it as an option, while reiterating Labour’s election policies of compulsory KiwiSaver, a capital gains tax and a gradual increase in the retirement age.
“On the savings front, we’re going to have to consider whether we make our savings sticky, rather than having open borders – people being able to take their savings pool with them to Australia,” Parker said.
“Someone suggested to me the other day – a senior business person – that we’re going to actually have to have a closed system that says once you get universal savings you actually can’t take them with you to Australia,” he said.
“We’ve got such a problem now between income differentials between New Zealand and Australia that we’re going to have to do better. We’re actually also going to have to move on inequality, you know, inequality in New Zealand is rising to atrocious levels, and a capital gains tax helps fix that as well.”
New Zealanders who move overseas are currently allowed to apply to pull their money out of KiwiSaver, except for government tax credits; however, there is a minimum 12-month wait before they get their money.
Those moving to Australia – where saving is compulsory – should soon be able to transfer their funds to one of the super schemes over there, once Australia gets around to signing the Trans-Tasman Portability Agreement.
New Zealand signed the agreement in 2010.