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Speaker 1: We've got changes to keep saver as promised. The default

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Speaker 1: key we Saver contribution will increase from three to four percent.

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Speaker 1: That falls on you, the worker or the employer, and

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Speaker 1: the government has its contribution to a maximum of two

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Speaker 1: sixty a year. The savings for the government two and

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Speaker 1: a half billion dollars over four years. Shama Bill Jacob

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Speaker 1: is economist at Simplicity with Me this morning, show me,

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Speaker 1: Good morning, Good morning. So, if you're for a young

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Speaker 1: person who's saving for their retirement, the net result of

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Speaker 1: all these changes are you better off or worse off

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Speaker 1: by the time you get there.

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Speaker 2: You will be better off because you will have more

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Speaker 2: money in retirement, but you will have less money in

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Speaker 2: your back pocket on the way through.

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Speaker 1: So does that mean over my lifetime am I better

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Speaker 1: or worse off? Presumably better off because if I'd spent

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Speaker 1: the money rather than saved it, I wouldn't get compounding returns.

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Speaker 2: This is it. So the way it works is for

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Speaker 2: the average person, your q server contributions will increasp about

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Speaker 2: a thousand dollars a year, Your take compey will fall

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Speaker 2: by but seven hundred fifty dollars a year, and the

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Speaker 2: government's revenue will increase, but five hundred dollars a year.

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Speaker 1: So anyone will lose. Anyone who will be paying in

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Speaker 1: the extra percent will lose seven hundred and fifty dollars

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Speaker 1: a year on.

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Speaker 2: Average, the average person who's on earning seventy five thousand dollars.

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Speaker 2: That's the typical wedge for a QII.

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Speaker 1: Okay, and how's that going to go down? Do you reckon?

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Speaker 2: Well? I think that's the main worry about this thing.

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Speaker 2: So I actually like the fact that we're going to

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Speaker 2: increase contributions because we actually to increase even more over time.

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Speaker 2: Australia is going to twelve and a half percent. But

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Speaker 2: for people who are in mid middle or low income

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Speaker 2: that reduction in take compei might be a bit of

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Speaker 2: a concern, especially given the current living cost of living

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Speaker 2: crisis and people are still struggling. Right.

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Speaker 1: The government's sweetener for Kiwi savor that's obviously getting the

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Speaker 1: chop are halved, but also means tested. This is a

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Speaker 1: retirement savings scheme, and where means testing the government contribution

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Speaker 1: a little ironic, we're not mean testing. That's soper too.

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Speaker 2: Well, that was my thought. You know, it feels right

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Speaker 2: that we are means testing because you know, for people

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Speaker 2: like me who are earning good money, we're doing enough

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Speaker 2: to save our retirement. But it seems ironic that we

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Speaker 2: are very clear about means testing. This particular subsidy which

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Speaker 2: only doesn't you know, only cost about a billion dollars

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Speaker 2: this year, right, but super is going to cost us

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Speaker 2: twenty five billion dollars and it's increasing by one and

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Speaker 2: a half billion dollars a year. So there's this kind

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Speaker 2: of weird kind of political incoherence that's taking place. But

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Speaker 2: it's not surprising. We've been doing this for decades.

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Speaker 1: Right, Yeah, it's and once Winston's gone, it'll all be sorted,

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Speaker 1: I'm sure. Shammi, thank you. Shamobo Jacob a Simplicity chief economist,

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Speaker 1: with me this morning.

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Speaker 2: For more from Early Edition with Ryan Bridge.

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Speaker 1: Listen live to News Talks it'd be from five am weekdays,

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