April 30, 2014
Savings plan to become inflation tool
Labour leader David Cunliffe says every family should have a nest egg, and the party’s policy will deliver a greater level of savings.
The party yesterday unveiled a plan to make KiwiSaver compulsory and allow the Reserve Bank to adjust the rate of contributions as a tool to control inflation, rather than relying solely on moving interest rates.
Mr Cunliffe says Labour rejects the idea only rich people should have savings, and every family needs money they can use as a deposit on a first home or for when hardship strikes.
"What we said yesterday is we can also help keep the costs of mortgages and rents down by using Kiwisaver to sort of flex up and down a bit to help take the heat out of the economy and that keeps interest rates down and that keeps our families’ housing costs down so it’s also really good for boosting our businesses and helping create good jobs," he says.
The policy has received a mixed response, with some business sector leaders saying the idea should be explored further rather than dismissed out of hand.
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