Bollard not expecting big KiwiSaver uptake

At least one senior economist, Reserve Bank governor Alan Bollard, does not expect large numbers going for KiwiSaver.

By Rob Hosking

In a day of unusual moves from Bollard yesterday he told members of Parliament the central bank does not anticipate much of an uptake in KiwiSaver.

Parliament’s finance and expenditure select committee asked whether he expected much of a change in household balance sheets – something he has been expressing strong concerns about – from KiwiSaver.

“We’ll be very interested in judging that. Our work to date, on reasonably conservative assumptions, assumes not a big uptake.�

“It’s not going to be that high, although we may be wrong on that.�

That is important, Bollard said, because “if the government were to actually reduce its savings in New Zealand then it’s pretty important the household sector starts savings.�

The questions came from Labour MP Charles Chauvel and followed a press statement from Finance Minister Michael Cullen saying Bollard’s decision on interest rates earlier in the day showed how important KiwiSaver is to the New Zealand economy.

Elsewhere in yesterday’s statement the central bank put considerable emphasis on the reduction in government savings over the next few years, by way of a looser fiscal policy.