KiwiSaver enrolments for July have dropped 45 percent below the monthly average and Labour says it's the opposite of what the Government said getting rid of the $1000 kickstarter would do.
This year's Budget axed the kickstarter effective immediately, with Prime Minister John Key saying getting rid of it would "not make a blind bit of difference" to the number of people joining the saving scheme.
In May, the Government said it expected to save more than $500 million over four years.
Inland Revenue's latest figures show net new members between 0-17 as at July 15 was down by 1188 people which is a 182.8 percent drop on the monthly average of the past 12 months.
Net new members for those in the 18-24 age bracket was down 134 people – a 111 percent drop compared to the monthly average.
"The major drop off in enrolments is for young New Zealanders. This is the real shame of National’s cutting of the kickstart. A new generation are being denied the chance to create good savings habits, particularly those from backgrounds who will struggle to put much aside in normal circumstances," Labour's finance spokesman Grant Robertson says.
He believes Mr Key's comment of dropping the kickstarter wouldn't make a difference was misleading and he should apologise for it.
Across all age groups, there was a net increase of 8581 new enrolments in July, with an overall decrease of 45 percent on the monthly average.