Thursday, May 12, 2011

Bait and switch

With the government's planned changes to KiwiSaver, the entire scheme seems to have turned into a gigantic bait and switch scam. First, offer people incredibly generous terms to get them to sign up. Then, unilaterally change those terms, leaving them locked into a scheme which isn't the deal they were told it was. If a private company operated like this, they'd be being prosecuted. Unfortunately, the Fair Trading Act apparently doesn't apply to the government.

Understandably, people are pissed off about this and want to quit the scheme. Unfortunately, they can't - once you're in, you're in, and forced to contribute until you're 65. And with employers now allowed to treat KiwiSaver contributions as part of your pay, then the government's proposed higher contributions effectively mean a legislated in-the-hand pay cut as well.

Meanwhile, Labour is incoherent as usual. They oppose the changes, but Phil Goff says they won't reverse them. So what does their "opposition" mean? Nothing. And on an issue where the government is potentially creating 1.7 million enemies, and turning the election into an explicit referendum on their policy, that's even more stupid than usual.