Jono, Ben & Megan - The Podcast - BONUS: Kiwisaver Tax Explained by Hannah McQueen

Episode Date: August 31, 2022

The Government sneaked through a GST tax on Kiwisaver. What does this mean for your managed fund? Will it go through? Does it make sense? Will Jono get Hannah McQueen to say 'Ker-chow'? Important and less important questions are tackled here (ok it's mostly important). Unusually intelligent chat with the guys ensues (mainly because of the guest, not them).See omnystudio.com/listener for privacy information.

Welcome to a bonus podcast from Jono and Ben on The Hits. The government plans to charge GST taxing the Kiwi Savers. Hannah Lightning McQueen, ka-chow! Good morning. Good morning. Nice to talk to you again. How are you? Pretty good, thanks. Now from Enable.me, Hannah, mate, last night the bloody government snuck through a cheeky little tax law to do with our KiwiSaver.

What's the deal? Yeah, it's pretty crazy, to be honest. At the moment, you have a manager that manages your fund if you're in KiwiSaver, and they're not allowed to charge GST. In fact, the KiwiSaver is exempt from GST. And now the government has said, hey, you now need to charge GST. And now the government have said, hey, you now need to charge GST. And that's essentially going to be deducted from the fund because the manager's fees are deducted from the fund. So if they're higher fees, then it means that there's less money left in the fund. The average Kiwi is going to have less money in retirement because they're now getting taxed more on

their fees. So this is happening from what I understand, 2026. Is that right? So a few years away. But would it happen every year? Like with the money in your KiwiSaver, you kept it there. Would you get taxed 15% on that every year? That's right. That's exactly right.

And so the compounded impact of that, I think there's a scenario that if you're in your 40s, your average KiwiSaver balance is around $37,000. And the impact of this little bit of tax is, I don't know, $50 a year or something like that. But over 25 years, that's $7,000. And it's your money that you don't have. And you're kind of like, why are you penalizing people for saving? That's just the wrong message to be sending.

And their argument is that there's this little category of a managed fund that I'm pretty sure only uber rich people invest in, that that has an odd tax GST treatment. So they're like, well, let's make everything the same and let's make everything as high as possible. And I guess it's been described as a sledgehammer approach, or I guess in line with my own parenting style, which is a mass overreaction to something that wasn't even a problem. Yeah, don't get it. So is it happening? Is it 100% happening? Do you know?

I'm sorry to chuck a question on you that you might not have the answer to, but is it all going to happen? Well, I think if this government is in power after the next election, then yes, you'd expect it to happen. Oh, so it can – okay, great. So it can change. Someone can get in there and go that was a load of, you know, you get rid of it all. Yeah, but there's probably 50-50 chance of that not happening.

Yeah, right. Now, it does also seem like quite hypocritical given the fact that this is a government saving scheme. They got us all to do it. They're like, hey you guys, come save with us. By the way, we won't tell you in a few years' time. We'll really stitch you up, blindside you all.

Great play, though. Hey, great play. It's a good play, but it's such a shame, right? You know, the introduction of KiwiSaver was actually a coup, and it's a credit to Michael Cullen for introducing it. And for most Kiwis, that is their only form of saving, because we're a bit useless at saving, and to penalise that. And I guess the thing that kind of grated on me a bit was that they didn't even announce that they were doing this.

You know, they just kind of released this, oh, we're going to give you 20 cents off your public transport. But hey, we're going to tax you thousands, in fact, billions of dollars over the next 25 years. It does seem like an interesting time to implement more tax across everyone. I get, you know, you're taxing the top tax bracket more. There's an argument for that. But doing it at a time where cost of living is so out of control and wild. Bold play there from the Ardern government. And as you say, it affects, you know, every New Zealander,

which is a lot of New Zealanders that will have a KiwiSaver. Yeah, it's pretty bullish, right? It's like in your face. But not even, right? It's in your face with the grab, but we're just not going to tell you about it. You know, we'll distract you. It's jazz handsy.

It's jazz handsy. You know, here's my conspiracy. You want to hear a conspiracy theory? Okay. Labor was like, okay, Guru, what you're going to do, mate, is you're going to come and you're going to say some... Oh, no, that's not what I'm going to say.

You're going to say some wild stuff about the party. Hannah, you don't have to be part of it. Hannah McQueen, you wrap me up, mate. Don't wrap up Hannah McQueen. Hannah McQueen, you can go now. No, she hasn't done her cacao yet. Okay, they're like, Gurav, smoke screen over here. We'll slip through the KiwiSaver thing.

Can you pull this radio mic down? There we go. That's exactly what happened. Hannah, thank you so much. Thanks for having me. You've been listening to a podcast from the hits for more audio search up megan puppets on the 3 p.m pickup or brad and laura on the hits available now on the iheart radio app