Changes to KiwiSaver will make it unaffordable for a number of low income earners and women in particular, according to a Massey University employment relations expert.
Associate Professor Jane Parker says the higher level of worker contributions outlined in today’s Budget may put people off paying into KiwiSaver.
“It will be the low to middle income earners that bear the brunt of this and these include women, Maori and Pasifika,” Dr Parker says.
“Women could be hardest hit, particularly as many are contingent workers and/or have broken career trajectories. It becomes an additional burden, and as such a double whammy, because it denies them an opportunity to build momentum to have a long and credible savings record.”
Dr Parker, who lectures in employment relations and human resource management in the School of Management and researches equality and diversity developments in workplaces, says the changes might prevent a long-term savings mentality.
“People will get jittery and could start to distrust where government policy will go next given these and other recent changes to KiwiSaver,” she says. “Some will transfer into different funds – for example, the Maori 'iwi saver' – and others may opt to not pay into schemes at all because it is just a bit risky.”