Business NZ has several concerns with the Government-commissioned Harris report on workplace superannuation.
Business NZ Chief Executive Simon Carlaw says it’s a significant proposal that would impact on thousands of New Zealanders, yet is being treated as a rushed job, with only five weeks for comment, and with the Government appearing to indicate that it’s the way to go.
“The Harris report reflects its terms of reference that determined that only one outcome, whatever its merits, is now on the table.
“The report does not quantify the economic impacts of, for example, wage inflation or the additional offshore investment that will result.
“The report stresses the low numbers – less than a quarter of a million - currently involved in workplace schemes, but makes no mention of the nearly half a million who belong to other super schemes. Without double-ups, this means about a quarter of all adults over 20 belong to some kind of super scheme. Given the voluntary nature of super, this is actually a reasonable level of participation and should not prompt us into any rash or ill-considered commitment.
“The scheme as outlined would have administration costs paid by the Government, however this would distort the competitive environment, disadvantaging existing schemes and conceivably putting them - and existing savers - at risk.
“Employers would also bear extra risk from being required to select a preferred fund manager for their employees. Even though employees would be able to change fund providers at a later date if desired, this is still an extra responsibility imposed on employers who would be in a difficult position if the selected fund failed or did not perform as well as others.
“More significantly, given the Government’s willingness to introduce taxpayer funded employer contributions in the state sector, it’s to be hoped that this proposal for the private sector is not simply stage one of some larger compulsory plan.
“Business NZ suggests increasing the time available for comment. This would allow current critical research on real household savings and its tax treatment to be taken on board and would allow proper debate in the interests of improved superannuation provision.”
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