Who'd want to be a landlord now ?

[Bjauck]

Pension funds like KiwiSaver already have the ability to produce higher returns through leverage (on margin). But using KiwiSaver to invest into a new business or towards school study is entirely a different can of beans. The fact that more than 95% of small businesses fail within 5 years is a good reason why banks shy away from lending for business ventures. Likewise with schooling. If the person takes on a useless degree than where would that leave in terms of wise use of KiwiSaver funds (when it could be kept in the pension to have more growth?).

Sure the KiwiSaver money released for further education may result in failure for the kiwsaver concerned. The money released for real estate purchase may result in further inflating th housing market or it may be used to buy an over priced problem house. My opinion is that Kiwisaver should only be used for retirement and not as a real estate deposit saving scheme.

The government should introduce a second tax concessionary scheme to encourage saving with the ability to withdraw savings (with a write-back of tax concessions for withdrawals over a certain amount and within a set time period) prior to retirement.