A new state-run KiwiSaver fund could strip away tens of thousands of dollars in account fees, the Green Party says.
Co-leader Russel Norman introduced the KiwiSaver “public option” plan at the Green Party launch in Wellington yesterday.
Dr Norman said the size of the Super Fund – through which the new KiwiSaver offer could be set up – would make it more efficient than others, forcing down fees.
There were questions about exactly how the new fund would work, but Dr Norman said up to $142,000 extra could be cashed in on KiwiSaver accounts.
“It’s not going to cost any money to the taxpayer, but it will save KiwiSavers an awful lot of money. They’ll get a much bigger nest egg.
“We’d basically bolt it on to the existing six providers, just putting a seventh provider on there with a much lower cost structure. And it would add a bit of competition.”
Prime Minister John Key said the problem of high KiwiSaver account fees was “definitely an issue to look at”.
However, a Government provider might imply a guarantee on losses, and this was not in place.
Quite right. Government guarantees are only appropriate for investment funds pouring money into high risk finance companies. #eyeroll.
State run companies are a great solution to market failure – the traditional left-wing response would be to spend money on regulations and oversight bodies to address the problem. Setting up a new company to introduce competition means that the public gets more choice and the taxpayer gets a return on the spending. If only we could do something like this to challenge the supermarket duopoly.
In a political sense this feels like the Greens introducing policies that National can say ‘Yes’ to, in exchange for an agreement to abstain on confidence and supply. I think the chances of a Green-National coalition are zero, but if the Nats win a majority vote there’s no reason for the Greens not to abstain on C & S in exchange for some policy wins.