He told Nadine Higgins on The Prosperity Project podcast that unlike other countries that have struggled to deal with self-employed worker contributions, the set-up of KiwiSaver has the tax department as its centre.
“How it would mechanically work is it’s like when you pay provisional tax as you’re going through a year, you will have, as part of that, your KiwiSaver. You’ll have to pay that throughout the year, as part of your quarterly provisional tax filings or your GST returns.”
Unlike employees, who receive contributions from their employer, self-employed workers would have to fund the entire amount themselves.
“They need to retire as well with dignity,” Whineray says.
Under his proposal, all contributions would be wound back to 2% initially and gradually increase to 12% over 20 years.
He acknowledges raising contribution rates could mean higher prices for customers, smaller pay rises or reduced business profits but argues the costs of compulsory contributions would be spread across the economy.
He’s pleased to see political parties paying attention to KiwiSaver this election “It feels like KiwiSaver’s time has come up for discussion. It’s 20 years old. It’s got great brand strength.”
However, he says the challenge is securing sufficient political consensus to implement changes designed to last a lifetime.
“We can’t have something that has to run for 21, 22 elections – which is 0 to [age] 65 – be tinkered with again for the next 20 years.”
Watch or listen to the full episode of The Prosperity Project for more.
The Prosperity Project is hosted by Nadine Higgins, an experienced broadcaster and financial adviser.
Follow the show at iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts. New episodes are released every Monday.