Are proposed KiwiSaver changes likely to shortchange a cohort of New Zealanders?
By Susan Edmunds of RNZ
Political parties, including National and NZ First, are promising to introduce payments for babies signing up to the scheme in the future.
It would be the first inducement to join the scheme since the government axed the $1000 kickstart for new members in 2015.
The end of that payment was blamed for a sharp reduction in the number of under-18-year-old members.
National's policy would allow babies born from July 1, 2027 to receive $1500.
TVNZ has extensive coverage of the election campaign. (Source: TVNZ)
This could grow to be worth about $5000 by the time someone turns 18, but the party said it had no plans to backdate it to anyone else who had missed out, such as anyone who joined the scheme since 2015.
Stella Saul said she was part of a "potentially sizeable" cohort of people who started a KiwiSaver account after the kickstart was abolished.
"I started my first tax-paying job in September 2015 and, having contributed to KiwiSaver for almost 11 years, I have only ever received the annual Member Tax Credit contribution from the government. That contribution has now been halved, from a maximum of $521.43 to $260.72 a year.
"Now, I'm not saying that I believe people in my position are inherently entitled to an additional government payment, more that this raises an intriguing question about the cumulative and compounding effects of government incentives over a person's working life.
"Those who received the $1000 kickstart had that money invested considerably earlier, while children receiving the Baby Boost will have potentially decades for their $1500 to compound. People in between have missed both opportunities."
Just under 700,000 children have been born since 2015.
"At the new rate, it would take me roughly another six working years of maximum contributions to accumulate the equivalent of the $1500 Baby Boost.
'We need to look at the positives'
Kernel founder Dean Anderson said the complaint was fair.
"However, there are many things in life that will be seen as unfair – from student loans and education costs to tax settings and house deposits," he said. "Rather than dwell on the negatives, we need to look at what positive impacts we can have."
Generate investment specialist Greg Smith agreed some people could end up missing out.
"That's a legitimate concern," he said. "However, from a retirement savings perspective, the biggest determinants of outcomes remain ongoing contributions and fund choice.
"Someone who contributes regularly for 40 years and is in an appropriate growth-oriented fund will generally end up far better off than someone who received a $1000 headstart, but contributes little thereafter.
"A $1000 or even $1500 headstart helps, but it is unlikely to be the deciding factor in whether someone achieves a comfortable retirement."
National said its view was that it was better to start now than not at all.
"Under our policy, this cohort will benefit from KiwiSaver contributions as soon as they enter paid employment from age 16 and they will receive larger contributions from their employer than previous generations did."
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