KiwiSaver2 - Tax breaks have arrived
Bomber Command

Still more on KiwiSaver

Having spent a very busy day talking to fund managers about the changes I would say the industry is very happy with the proposed changes – one remarked “its rare for government to listen and adopt the recommendations so comprehensively” another said “we even got a tax incentive!”

For my own part I say this:

  • Overall – a big improvement and now a decent bit of policy
  • Used to its full extent the tax incentive is comparable to Australia’s for most taxpayers
  • The shift to deducting from first paypacket is sensible – event though there is more pressure on the employer to provide information early
  • The shift in timeframe is helpful for employers, but cosmetic in practice for fund managers – and means that first payment into schemes still happens in first week of October
  • The housing diversion scheme is tricky and may not be used much – it could be seen as a complicated yet limited form of mortgage tax relief – likely to cost as much to administer as it saves members.

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