Labour MP criticises KiwiSaver cuts as 'cruel' blow to Pacific youth

Labour MP Barbara Edmonds has condemned the Government’s plan to reduce KiwiSaver contributions, arguing that it will disproportionately impact Pacific youth and families, who are already facing financial difficulties.

From 1 July, the maximum government contribution to KiwiSaver will be halved to $260.72 per year, and this reduction will only apply to workers earning less than $180,000 per year.

Edmonds, the shadow Finance and Economic Development spokesperson, says the long-term consequences will be significant for those just entering the workforce. She accused the government of prioritising tax cuts over the financial future of young people.

“They’ve already cut Pacific women’s pay in this budget,” Edmonds tells Sanele Chadwick on Pacific Mornings. “Budgets are all about choices. You can either build for the future or you can cut.

“Many in the Pacific community are already dealing with so much. To now take away more from their retirement savings is just cruel.

“For example, if you’re an 18-year-old entering KiwiSaver, the previous contribution rate could help you save $66,000 more for retirement.”

Watch Barbara Edmonds' full interview below.

Finance Minister Nicola Willis defended the changes, saying that they will make the scheme more sustainable.

Willis says lowering the starting age and raising the employer contribution rate by April 2028 will help offset the reductions.

“To encourage first-time employees to adopt the savings habit, we’re extending the government contribution and employer matching to 16 and 17-year-olds in the workforce,” she says in a statement.

“Putting these changes together, the KiwiSaver balances of employees contributing at the new four per cent default rate will grow faster than they do at the current three per cent default rate, providing a larger balance at age 65 and a larger deposit when people use KiwiSaver to buy their first home.”

KiwiSaver can be used towards buying a first home. Photo/File

Calling for real solutions, not headlines

Edmonds also criticises the government’s approach to crime, including the introduction of tougher penalties for shoplifting and the new “coward punch” legislation.

“We need real solutions, not headlines,” she says. “That means stopping crime before it starts, supporting victims and giving our young people a better pathway.

“They’re using harsher penalties to make up for the fact that they don’t have the police power to actually enforce the law. They’re supposed to have delivered 500 cops, and they haven’t.”

Casey Costello, Associate Minister for Police, defends the legislative changes, saying that anyone who delivers a coward punch will face the full force of the law.

“We’re taking a stand for the victims, and we’re making sure that those who commit these senseless attacks feel the full weight of justice,” Costello says in a statement.

Toughter penalties for shoplifting are being introduced. Photo/File

Concerns about telehealth services

While a new 24/7 digital health service has recently launched, Edmonds warns it could undermine the role of community GPs, especially for Pacific families.

She concedes that telehealth has its place in our health system, but it should not replace traditional, in-person, face-to-face care.

There is also concern about accessibility, with reports that some virtual health appointments can cost up to $99 for services.

“Family doctors… are the backbone of our health system. And they’re feeling the pressure from cost increases.

“The trust built over time with your GP is crucial for our Pacific families. And my worry is that telehealth may not cater for our Pacific families as well as a visit to your local GP would.”

“For our older Pacific communities, the cost for it is actually very expensive, or more expensive than your GP… and also the ability for you to have the technology to be able to access it in the first place.”

There are concerns around the cost and accessibility of virtual health appointments. Photo/File

A call to action

Edmonds highlights the strength within Pacific communities.

“Just like my hometown of Porirua, our communities are strong. They will back each other.”

Her final message is one of encouragement: “If things are really difficult for you and your family, go and see your local MP, because we have connections to people in our community that can support you during this tough time.”