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Speaker 1: And you think tank is calling for Kiwi Saver for kids.

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Speaker 1: The Idea Institute is behind the idea. They've put out

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Speaker 1: a report looking at the potential benefits of enrolling every

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Speaker 1: New Zealand kid in a saving scheme from birth. They

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Speaker 1: reckon kids ki We Save could crow to be grow

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Speaker 1: to be worth tens of billions of dollars now. Max

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Speaker 1: Rashbrook is an Idea Institute founding trustee and with us himax.

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Speaker 2: Hey, yeah, that ha's the game.

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Speaker 1: Well, very well, thank you. Where would the money come from?

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Speaker 2: Well, we've sort of estimated in different ways that you

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Speaker 2: can run a scheme like this. They would probably cost

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Speaker 2: for the first year to the government somewhere in the

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Speaker 2: order of twenty to eighty million dollars. So you'd have

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Speaker 2: two options. One you could fund that is new spending

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Speaker 2: out of tax revenue, or if you wanted to rethink

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Speaker 2: the contributions that are paid to adult ke we Save

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Speaker 2: members at the moment, there's hundreds of millions of dollars

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Speaker 2: in that, which arguably isn't very well targeted. If you

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Speaker 2: rescoped that, you could pretty easily free up the money

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Speaker 2: to fund the kids ki We Save a scheme in

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Speaker 2: a cost neutral fashion.

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Speaker 1: Do you be putting how much would you be putting

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Speaker 1: in annually for the kids out of the government coffers.

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Speaker 2: Well, again, there's different ways you could do it with

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Speaker 2: sort of model, different forms of it, depending on what

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Speaker 2: different political parties might want to do. But you know,

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Speaker 2: the kickstart payment could be somewhere in the order of

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Speaker 2: five hundred to one thousand dollars just to get those

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Speaker 2: accounts going at birth, and then the government could be

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Speaker 2: matching if parents put in say one hundred or couple

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Speaker 2: hundred dollars a year, the government could match that dollar

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Speaker 2: for dollar. Is another incentive for savings.

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Speaker 1: How is this different from the super fund? I mean

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Speaker 1: the superfund is basically taking a bunch of money investing

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Speaker 1: it on behalf of everybody, and this is just taking

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Speaker 1: a bunch of money, putting it in your account and

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Speaker 1: having it invested on behalf of you.

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Speaker 2: Yeah, there's some similarities with the super fund, which I

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Speaker 2: think is a good thing because I think that's a

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Speaker 2: bit of public policy that pretty much everyone agrees has

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Speaker 2: been successful. I think the difference would be is that

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Speaker 2: the superfund is just doing it all by itself with

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Speaker 2: no real connection to you. The New Zealand citizen, the

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Speaker 2: New Zealand parent kids Key we say, would be saying,

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Speaker 2: look the dynamic of this, Like Key we say, as

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Speaker 2: a partnership between their employer and employee, this would be

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Speaker 2: a partnership between you as parents and the government. If

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Speaker 2: you put in a couple hundred dollars a year, the

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Speaker 2: government will put in a couple hundred dollars a year

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Speaker 2: as part of that compact and to encourage you to save.

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Speaker 1: You kin't of end up in the same place, except

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Speaker 1: parents are incentivized to add to it. And also the

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Speaker 1: kids I suppose learn a bit of financial literacy, don't they.

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Speaker 2: Yeah, I think that would potentially be one of the

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Speaker 2: other advantages. I mean, obviously, the government's moving to make

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Speaker 2: financial literacy a compulsory part of the curriculum, and we

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Speaker 2: think that's an excellent idea. But you know, how much

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Speaker 2: more meaningful would that financial literacy education be in high

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Speaker 2: school classes? Of every child in that class knows they've

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Speaker 2: got a qsair account that's accumulating, and when they're in eighteen,

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Speaker 2: they'll have to make decisions about how to invest it.

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Speaker 1: What do you think, I mean, do you think that

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Speaker 1: you leave it for the kids to claim when they're

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Speaker 1: sixty five, or do you give them an opportunity to

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Speaker 1: take them out maybe for some university education when they're eighteen.

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Speaker 2: Again, there's lots of different ways you could do it,

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Speaker 2: and we're sort of left that a bit open in

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Speaker 2: the report.

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Speaker 1: I think this, Master, what's your gut telling you? Because

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Speaker 1: I was talking about the reason I'm asking. Okay, the

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Speaker 1: reason I'm asking is because I mean, it's one thing

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Speaker 1: to have kind of you know, this this compounding interest

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Speaker 1: going on, and that's and investment and stuff, and that's

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Speaker 1: fantastic for you to get at sixty five. But your

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Speaker 1: education is such a such an infliction point in your life, right.

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Speaker 1: Imagine if you could get one hundred thousand dollars out

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Speaker 1: of it and pay to go somewhere amazing like Harvard.

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Speaker 1: Just the impact it could have on your finances later

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Speaker 1: in life.

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Speaker 2: Yeah, and look, I think that's a fair argument. My

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Speaker 2: gut instinct is that it's good to keep things simple,

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Speaker 2: So I would have the accounts at age eighteen, just

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Speaker 2: roll over into Classic. Can we save your accounts so

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Speaker 2: you can use them for retirement or first home deposit?

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Speaker 2: And one of the things I like about this kind

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Speaker 2: of scheme is if you think it's pretty plausible that

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Speaker 2: kids could hit eighteen with ten to twenty thousand dollars

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Speaker 2: in their accounts, if they then saved through their twenties,

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Speaker 2: even you know, done trades training, whatever, they're working as

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Speaker 2: a plumber, they could plausibly have a house deposit by

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Speaker 2: age thirty with this scheme. And I like the idea

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Speaker 2: that you've brought that back within reach for people that

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Speaker 2: sort of dream of home ownership for the average Kiwi.

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Speaker 1: Yeah, I think you're right actually about just leaving it

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Speaker 1: untouched and leaving it simple. Max. That's a great idea.

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Speaker 1: Thanks man appreciated. That's Max Rashbrook of the Idea Institute. Hither.

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Speaker 1: I started my daughter's Kei we saver when she was seven.

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Speaker 1: She's now twenty seven and she's just bought her first home.

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