Tauranga Chamber of Commerce CEO Max Mason is concerned some employers in the region will not cope with the one per cent increase in employer contributions to KiwiSaver.

In today's Budget, Finance Minister Bill English announced a raft of changes to the scheme, including raising employer and worker contributions from two per cent to three per cent, halving government tax credits and ending the tax-free status of employer contributions.

Max believes many Western Bay of Plenty businesses are already struggling and increasing the amount employers have to contribute will have an impact.

The three per cent contribution will not come into force until April 2013.

'If it was coming in now, it would definitely hurt struggling businesses,” says Max.

'Some businesses are doing reasonably well, but there are a lot hurting and one per cent on top of the wage bill is significant.”

Bill English told the house that KiwiSaver needed to become more 'sound and sustainable”.

He estimates the government contribution to the scheme in the 2010-11 year will be $1.2 billion, an amount Bill says is largely borrowed from overseas.

It is estimated by the government that KiwiSaver will have a value of $25 billion by 2015 and $60 billion in 10 years time.

Max says overall the Budget is 'sensible and prudent” and the delayed KiwiSaver changes will ease any impact on employers.

'The government is taking a gamble but ultimately it's clever politics because there is an election before and if people don't like the changes they can vote with their feet.”

Government is forecasting four per cent growth in the economy over the next year, which Max describes as 'ambitious”.

He also applauds the partial sale of some State Owned Enterprises, tightening the student loan scheme and injecting more funds into the ultra fast broadband network and Kiwi Rail.

The Public Service Association's view of the Budget is not flattering and it is summed up by this cartoon they realeased at 2pm: