Tauranga financial advisor Jonathan York is urging the government to provide tax incentives in today's Budget to help balance other cuts expected to be made to KiwiSaver and Working For Families.
Finance Minister Bill English will announce the Budget from 2pm.
'It would be nice to see some tax incentives on savings and that's another way they could angle it,” says Jonathan.
'Although they reduce the tax credit on KiwiSaver they can give an incentive to encourage people to save.”
He says KiwiSaver is an important scheme for New Zealand and believes the changes could make people less likely to enter the programme.
Prime Minister John Key announced the government will reduce government contributions to KiwiSaver and move that to the employer and worker.
'The government is borrowing around $300 million to balance the books.
'If you are borrowing to give to Kiwis to help with their savings it doesn't make sense, but at the same time you have to balance that with people who are looking to retire in 15 to 20 years time and that will put pressure on the government's finances.”
2 comments
Donkeyism No 1 Hook Line and Sinker
Posted on 19-05-2011 13:41 | By Openknee8ted
What nonsense. After the GST increase and using borrowed money to finance Think Big 2007 Version, where has the money gone? Nov 10, 2007 National argues the Government's debt levels are so low, it does not make financial sense to fund infrastructure spending out of current cash flows and let future taxpayers off the hook.
Donkeyism No 2 Borrowed Cash not earmarked for Kiwisaver
Posted on 19-05-2011 13:53 | By Openknee8ted
KiwiSaver semi-myth No 1: "That the Government is borrowing to put money into people's KiwiSaver accounts." Its borrowing is actually the amount it needs after all its spending decisions, and since one dollar looks much like another, it is hard to say which ones paid for what. You might as well say the Government is borrowing to pay for the police or MPs' salaries. But it is a useful way for the Government to illustrate its point that transferring money from its own overdraft to people's savings is the first priority for cuts as it tries to balance its books. - The Dominion Post
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