Advanced Search
MyIDEAS: Login

How Much New Saving will KiwiSaver Produce?

Contents:

Author Info

  • John Gibson

    ()
    (University of Waikato)

  • Trinh Le

    ()
    (New Zealand Institute of Economic Research)

Abstract

After two decades of tax neutrality for private saving, New Zealand policy changed radically with the recent introduction of tax incentives for KiwiSaver. A key issue for tax-favoured saving schemes is the extent to which existing saving is reshuffled versus new saving created by reduced consumption. Using data from a nationwide survey carried out by the authors, we estimate that each dollar of KiwiSaver balances represents only $0.09-$0.19 of new saving. The rest is either reshuffling amongst existing saving and debt by KiwiSaver members, or else taxpayer and employer transfers which reduce national saving elsewhere. Homeowners are least likely to fund their KiwiSaver contributions by reducing spending, indicating possible mis-targeting since owners are often blamed for excessive consumption arising from house price wealth effects. There is little evidence that KiwiSaver affects either the reported trend in saving or the presence of dis-saving. Since only one-tenth of households report negative saving, KiwiSaver may be a costly and ineffective solution to a relatively small problem of insufficient household saving.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: ftp://mngt.waikato.ac.nz/RePEc/wai/econwp/0803.pdf
Download Restriction: no

Bibliographic Info

Paper provided by University of Waikato, Department of Economics in its series Working Papers in Economics with number 08/03.

as in new window
Length: 19 pages
Date of creation: 12 Mar 2008
Date of revision:
Handle: RePEc:wai:econwp:08/03

Contact details of provider:
Postal: Private Bag 3105, Hamilton, New Zealand, 3240
Phone: + 64 (0)7 838 4758 (Administrator)
Fax: + 64 7 838 4331
Email:
Web page: http://cms.mngt.waikato.ac.nz/departments/economics
More information through EDIRC

Related research

Keywords: KiwiSaver; retirement saving; substitution effects; tax incentives;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. More questioning of the efficacy of Kiwisaver
    by Matt Nolan in The Invisible Hand in Economics on 2014-02-11 22:00:40
  2. More questioning of the efficacy of Kiwisaver
    by Matt Nolan in TVHE on 2014-02-11 22:00:40

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wai:econwp:08/03. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Brian Silverstone).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.