Young People Big Winners From Tolis Tax Break

  • Tony Ryall
Youth Affairs

Young savers will be big winners under the Government's proposed tax break for low and middle income superannuation savers, Youth Affairs Minister Tony Ryall said today.

"Right now most young people pay the 21 cent tax rate. Yet their superannuation scheme savings are taxed at 33 cents in the dollar. This isn't fair," Mr Ryall said.

"The Government wants to give retirement savers earning less than $38,000 p.a. a tax break under its TOLIS proposal. Superannuation scheme savings will be taxed at the same rate as the individual saver is taxed. For most young people this means a tax break from 33 cents to 21 cents.

"National's plan would see young people's retirement savings compound at a much faster rate than at present. This is because they will pay less tax on the earnings of their super scheme. The tax they save will be added to their savings total which means faster compound growth. This will encourage saving, thrift and personal responsibility.

"The young people I talk to are aware of the importance of saving for their retirement. Our proposal will be a good incentive.

"The Labour Party remains anti-saver in its opposition to this tax break. They talk about backing low and middle income New Zealanders, but when they get the chance, Labour balks.

"They tell young kiwis one thing, and the Business Roundtable another."