New Tax Treatment Welcomed By NZX

Yesterday's announcement of a change to the tax treatment of employer KiwiSaver contributions by Minister of Finance, Dr Cullen, has been welcomed by NZX.

“Exemption from tax for employer contributions to KiwiSaver will give New Zealand employers greater leverage and flexibility in the way they attract and retain fit people in the face of intense global skills competition,” said NZX, CEO Mark Weldon.

However, NZX issued a note of caution that KiwiSaver may be considered a catch-all for wider savings issues in New Zealand .

“Dr Cullen has stated that he wants New Zealand to become a nation of asset owners, not just home buyers. The Australian experience shows very clearly that asset accumulation by way of retirement savings makes people care about their own investments and the companies they are invested in,” said Weldon.

“The ultimate goal of KiwiSaver must be continuous, compounding, consistent savings for New Zealanders. This must be the filter through which all prospective KiwiSaver enhancements are run. It must also be the measure of success for KiwiSaver,” said Weldon.

In NZX's view KiwiSaver will act as the enabler for the majority of New Zealanders to own their own piece of New Zealand assets, to care about how they perform and, in the process, to provide for their own financial future.