■ The Luxon government has announced that should they be re-elected in October, they will make employer/employee superannuation contributions to KiwiSaver compulsory from July 2028. This would mean 6 percent contributed by employers and 6 percent by employees, to bring the total contributions to 12 percent within five years of its introduction, writes Katherine Langford.

On the surface this might seem like a sensible plan – other countries also compel employees to make super contributions, such as Iceland, Switzerland, Finland and Singapore.

And in countries with stronger economies, much lower tax rates (eg, Singapore), higher wages, and governments that invest in infrastructure, it works.

New Zealand is, compared to other OECD countries, a low-wage economy with low-purchasing power.

New Zealanders work longer hours for less income and have a higher cost of living.

Kiwis pay much more for utilities, petrol and food items, such as vegetables, meat and dairy, with rates and insurance continuing to rise.

And, New Zealand is now the most expensive country in the OECD for construction, machinery and equipment.

In the words of Paul Conway, chief economist, director of economics, and member of the Monetary Policy Committee, “New Zealand is a relatively expensive country”.

New Zealanders also pay tax from the first dollar earned.

Compare this to Australia, where the first $18,000 of earnings are tax free, wages are around 25 percent higher, and employers pay the full 12 percent of superannuation into super funds for their employees (businesses are partly compensated with tax concessions).

The impact of removing an additional 6 percent from New Zealand employee salaries during a cost-of-living crisis, with no additional supports in place from our government, will reduce spending power even further and will, without doubt, increase poverty.

What impact would this have on graduates, for example, who will already be paying 12 percent of their earnings above $24,000 on their interest-accumulating student loans?

People are already leaving New Zealand in record numbers to live in Australia, and why wouldn’t they?

As for the capacity of businesses to pay 6 percent extra, company liquidations are at an 11-year high, slightly lower than last year when liquidations were at the highest level since the wake of the GFC.

Over 3000 companies became insolvent in the year to March, at the top of the list the liquidation of 765 building and construction firms, followed by hospitality with 399 liquidations.

Many New Zealanders and businesses will simply not be in a position to survive the loss of more income/ revenue in the current economic climate.

What will become of those who cannot sustain it, and what will become of our already struggling economy.

In a very uncertain world with unpredictable inflation shocks, government policy and regulation is critical.

Everything cannot simply be left to the “free market”, which is the driving philosophy of this government, especially now.

This is not working for people, and our country is about people, not just business.

Small businesses and the average Kiwi are in decline.

Continuing to extract more across the board, from those who cannot afford it, without other regulatory action such as breaking up the banking, power and supermarket monopolies so we can afford to live, is going to make our economy worse, not better.

But the indicators are that this government does not govern for its citizens, but for big business, who will benefit handsomely from increased KiwiSaver investments, as they will from the selling off of our conservation land.