Budget 2025: Sole Trader Feels 'Ripped Off' By Government's KiwiSaver Cuts
The budget move to halve the government's KiwiSaver contributions has been described as a blow to sole traders.
The government contribution would be cut from $521 to just over $260 - provided there was a minimum of $1042 saved over a year, and those earning more than $180,000 would now miss out altogether.
The government said this is to make sure the scheme's costs to the taxpayer "remain sustainable".
Wellington-based personal trainer Carl Rein believed it would affect him long-term.
"I'm in my 30s, so I've got at least 30-plus years to go before I'm even going to be able to access it," Rein said. "So all of that accumulated interest that I would benefit from later on, and it would give me greater security later on in life, is now not going to be there."
Rein said the move made it "disheartening" to be involved in KiwiSaver, and he felt "ripped off".
He was also concerned it opened the door for government contributions to become zero.
Rein's comments came alongside criticism of the policy from sole trader tax platform Hnry.
Hnry chief executive James Fuller said the government's decision posed risks to the country's 400,000 sole traders.
"The danger is that sole traders switch off from KiwiSaver entirely and then potentially look at more risky ways to try and prop up the income they would have got from their retirement savings that the government was contributing to," Fuller said.
"So, it leaves a lot of questions for sole traders as to where they put their money now that they know that the government isn't backing them to contribute to KiwiSaver," he said.
Fuller said KiwiSaver was the wrong place to be looking for savings.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Otago Daily Times
10 hours ago
- Otago Daily Times
Economist backs new water services model
One of New Zealand's best-known economists is backing the maths behind a move to shift control of Waitaki's water services and assets to a new company, jointly-formed by four Otago district councils. With water charges due to come off rates bills from the 2027 financial year because of changes to government regulations, Infometrics chief economist Brad Olsen has voiced strong support for Southern Water Done Well's preferred water services delivery model, saying it offered the "best pathway" to safe, reliable water services and long-term financial benefits for the districts involved. SWDW's four partner councils — Waitaki, Gore, Central Otago, and Clutha district councils — are consulting on options for the future delivery of water services to meet the government's Local Water Done Well legislation. Their preferred delivery model is a jointly owned council-controlled organisation (CCO) covering all four districts. The other three options being consulted on are a standalone Waitaki CCO, an in-house business unit, and in the case of WDC only, a joint CCO with Mackenzie, Timaru and Waimate districts. At a recent meeting of Southern Water Done Well (SWDW) elected politicians and senior staff, Mr Olsen outlined what he felt were the positives of the joint CCO option. Mr Olsen said one of the "most compelling" advantages was the leap in bargaining power, a media statement issued by the SWDW group said. Individually, the four councils each represent just 1% to 2% of the South Island's population. However, by forming a jointly owned council controlled organisation, they collectively represent 6.6% of the South Island's population. "That shift in scale is transformative. "In a tight infrastructure market, scale gives you options and leverage." SWDW, through Wellington-based consultants Morrison Low, has modelled all of the options, for water charges in 2027-28 and 2033-34 years in the Waitaki district. Mr Olsen noted SWDW's deliberately conservative approach to financial modelling for the jointly owned CCO. While short-term financial gains might be modest, water assets were long-term (20 years+) and by year 20, modelling for other joint water services delivery entities showed potential savings of up to 20% compared with going it alone. "Even under these conservative assumptions, the numbers still stack up." The conservative modelling projects 15% to 16% operating and capital efficiencies being achieved over "roughly a decade, which is a similar timeframe to achieve efficiencies as seen in other spaces". WDC's public consultation on the four options ends today at 5pm. Water options Water options considered (prices per year) Joint ''Southern Water Done Well'' 2027-28 2033-34 Joint council CCO (SWDW) $2168 $2894 Stand-alone CCO $2466 $3754 In-house business unit $2269 $3093 The South Canterbury council's model 2027-28 2033-34 In-house business unit $2041 $2924 Joint council $2269 $3093
Scoop
a day ago
- Scoop
Government Congratulates Ahuwhenua Trophy Winners
Press Release – New Zealand Government Sheep and beef farms are the backbone of the Mori primary sector, valued at over $12 billion, and these awards honour the landowners, rangatira and kaimahi who keep that success going, says Mori Development Minister Tama Potaka. Minister of Agriculture Hon Tama Potaka Minister for Māori Development Agriculture Minister Todd McClay and Māori Development Minister Tama Potaka have congratulated the winners of the 2025 Ahuwhenua Trophy and the Ahuwhenua Young Māori Farmer Award, recognising their excellence and leadership in Māori agribusiness. The Northland-based Whangaroa Ngaiotonga Trust was awarded the 2025 Ahuwhenua Trophy for excellence in Māori sheep and beef farming at a gala dinner in Palmerston North tonight. 'Whangaroa Ngaiotonga Trust turned a struggling farm into a thriving 1,200-head bull beef operation, and it's a clear example of what vision and hard work can achieve,' says Mr McClay. 'This award celebrates Māori excellence in farming and the kind of leadership that will help us double the value of exports in 10 years,' says Mr McClay. Mr Potaka says the Ahuwhenua Trophy recognises excellence in farming know-how, as well as the wider role that Māori intergenerational farming entities play in our regional communities and in protecting the environment. 'Sheep and beef farms are the backbone of the Māori primary sector, valued at over $12 billion, and these awards honour the landowners, rangatira and kaimahi who keep that success going,' says Mr Potaka. Te Tai Tokerau farm manager Coby Warmington took out the 2025 Ahuwhenua Young Māori Farmer Award for sheep and beef. 'Congratulations to the winner and all those who took part in this year's competition. 'The prosperity and wellbeing farming generates for Iwi and Māori across the motu has far reaching impacts for communities, for whānau, for reinvesting back into marae and more. I tautoko the outstanding work these finalists are doing.'
Scoop
a day ago
- Scoop
Government Congratulates Ahuwhenua Trophy Winners
Hon Todd McClay Minister of Agriculture Minister for Māori Development Agriculture Minister Todd McClay and Māori Development Minister Tama Potaka have congratulated the winners of the 2025 Ahuwhenua Trophy and the Ahuwhenua Young Māori Farmer Award, recognising their excellence and leadership in Māori agribusiness. The Northland-based Whangaroa Ngaiotonga Trust was awarded the 2025 Ahuwhenua Trophy for excellence in Māori sheep and beef farming at a gala dinner in Palmerston North tonight. 'Whangaroa Ngaiotonga Trust turned a struggling farm into a thriving 1,200-head bull beef operation, and it's a clear example of what vision and hard work can achieve,' says Mr McClay. 'This award celebrates Māori excellence in farming and the kind of leadership that will help us double the value of exports in 10 years,' says Mr McClay. Mr Potaka says the Ahuwhenua Trophy recognises excellence in farming know-how, as well as the wider role that Māori intergenerational farming entities play in our regional communities and in protecting the environment. 'Sheep and beef farms are the backbone of the Māori primary sector, valued at over $12 billion, and these awards honour the landowners, rangatira and kaimahi who keep that success going,' says Mr Potaka. Te Tai Tokerau farm manager Coby Warmington took out the 2025 Ahuwhenua Young Māori Farmer Award for sheep and beef. 'Congratulations to the winner and all those who took part in this year's competition. 'The prosperity and wellbeing farming generates for Iwi and Māori across the motu has far reaching impacts for communities, for whānau, for reinvesting back into marae and more. I tautoko the outstanding work these finalists are doing.'
