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. Anan Zaki, Business reporter
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.
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