Ryan Bridge accuses Government of being 'incompetent' or 'conniving' after KiwiSaver fee tax backtrack

AM host Ryan Bridge is lashing out at the Government accusing it of either being incompetent or conniving after it backtracked on its plans to charge GST on KiwiSaver fees. 

The plan to subject all KiwiSaver providers' fees to a 15 percent GST rate was met with an instant backlash from savers and fund providers, while the Opposition slammed it as a retirement tax.

It took less than a day for the Government to scrap the plan with Revenue Minister David Parker revealing it wouldn't go ahead on Wednesday. 

The plan would have tidied up anomalies in GST rules but would also mean Kiwis would have billions shaved off their savings. 

Despite the u-turn, AM host Ryan Bridge slammed the Government during the show on Thursday. 

Bridge said the Government's surprise introduction of the Bill was at best incompetent and at worst conniving. 

"What on earth was that?" Bridge questioned. "There are two options either they were really incompetent or they were really conniving and they tried to hide this and we wouldn't notice that $100 billion could be shaved off of our savings by 2070. 

"Either they thought, 'Oh well it's just a technical change, it doesn't really affect much let's go ahead and do it and we don't need to put it in the press release' which is completely incompetent and a total misread of the electorate. 

"Or they thought, 'I know this is naughty so what I will do is put it under here and hide it away'. It's sneaky as Nicola Willis puts it. Either way, you look at this, it is bad for the Government," he said. 

Bridge did give the Government some credit for listening to the backlash but said it wouldn't have been necessary if they had listened to expert advice before introducing the proposed plan.   

"To their credit, they listened really quickly, they realised the writing was on the wall and they ditched the whole thing.

When announcing the u-turn on Wednesday, Parker said while inconsistencies in GST rules are generally bad, if the sector is happy to operate with the status quo the Government won't change the rules. 

"Smaller fund management providers who were doing the right thing were at a competitive disadvantage compared to others, mostly larger providers, who were using the loophole," he said.  

"Generally it's bad to have these sorts of distortions in the tax system as bigger players can exploit them, but if the sector as a whole is happy to operate with the status quo then we will leave them in place."

Parker said the Government undertook "extensive consultation" which produced mixed views on the merits of the plan. 

"The large companies profiting from the current set-up were opposed to the change, while smaller providers were more supportive of the change. This was because these providers who did charge the full GST on their service fees faced unfair competition from the bigger players.

"However since the announcement it has become clear that smaller providers now oppose it too."

Parker also hit out at National, which had heavily criticised the Party's proposed change. 

"I am proud of Labour's role in introducing KiwiSaver and its role in securing the future of New Zealanders. We will never do anything to undermine it.

"By contrast, National will not commit to keeping KiwiSaver in its current form, and cannot be trusted to support this important scheme. When last in Government National ditched the Kick-Start payment and introduced a tax on employer contributions," he said.