A new Horizon Research survey commissioned by the Financial Service Council has found 73% of New Zealanders think it was a mistake for then-Prime Minister Robert Muldoon to do away with the fledgling scheme after he was elected in 1975.

The scheme, established by the Labour government in 1974, was similar to KiwiSaver and required contributions of 8% of income (4% employee/4% employer).

FSC chief executive Peter Neilson said the scheme would have had a big impact on demand for financial advice if it had been left intact.

“Brian Gaynor has estimated that if the scheme had gone ahead it would be worth more than $240 billion, which is much bigger than what the industry is today,” he said.

“If you think about $240 billion versus $14 billion it’s pretty hard not to say there would be a bigger market [for financial advice].”

Neilson said New Zealand had been 20 years ahead of Australia, which introduced its own compulsory scheme in 1992, but is now 20 years behind.

Hawke’s Bay financial adviser Mike Shaw, who was working when the scheme was introduced, said it was “the saddest thing” that it was cancelled.

“I think it would have been a positive thing for the New Zealand financial planning industry.  We would have had a whole lot of baby boomers coming to their retirement with large lump sums,” he said.

Shaw said if the scheme had been kept New Zealand would be “on level” with Australia but New Zealand advisers might have “gone down the same road” as their Aussie counterparts.

“Most Australians I know in super schemes aren’t in self-managed funds; they’re in managed funds with the advisers taking rather large fees.”

The FSC also found 59% of those surveyed supported KiwiSaver being made compulsory for all employees.