The Government has adopted a timid approach to superannuation saving, ruling out compulsory savings and opting instead for auto-enrolment in KiwiSaver - but not yet.
Finance Minister Bill English said the Government would proceed with the auto-enrolment in 2014-15, subject to returning to surplus.
"In the current environment, we need to be mindful of the fiscal costs of all programmes.
So, we will proceed with KiwiSaver auto-enrolment in the same fiscal year in which we return to surplus and start to repay debt," he said.
Depending on the uptake and design, officials estimated a KiwiSaver auto-enrolment could cost the Government up to $550 million over four years - including the one-off $1000 kick-start payments to new members and ongoing annual member tax credits.
Mr English said the Government intended to fund that from within existing budget allowances.
Those estimates assumed a 55% take-up rate among people in the workforce who were not now in KiwiSaver, he said.
Forsyth Barr savings specialist Damian Foster told the Otago Daily Times that although 2014-15 was a long way off, it was hard to argue for the Government to spend an additional $550 million in scheme contributions given New Zealand's current fiscal position.
"We do still see this stage of auto-enrolment as the first step towards having a compulsory workplace superannuation membership in New Zealand.
"We expected the process to occur much quicker than is being proposed but it is still a positive step towards Kiwis providing their own individual savings - with some help from their employment and the Government along the way."
Mr Foster did have concerns about whether the Government's plan would include younger workers, who often saw superannuation as a low priority. Many 16-year-olds were working part-time before going on to university or other studies.
Labour Party finance spokesman David Cunliffe said in an interview National would not face up to hard issues on saving and the KiwiSaver policy was a rushed, one-off gimmick.
"National is desperate to be seen to be doing something in savings, but this is not nearly enough. Just like asset sales, it won't work."
