National will increase default KiwiSaver contribution rates further if re-elected, leader Christopher Luxon announced today as he revealed his first election policy.
He said National wanted to gradually lift KiwiSaver contributions to 6% each for employers and employees by 2032, matching Australia’s 12% combined rate.
The Prime Minister announced the policy today during a speech marking two years since the National-formed government, saying it would provide greater financial security for retirement and boost New Zealand’s savings and investment levels.
“If we’re serious about building the future, and I am, it’s time to aim higher,” Luxon told party faithful in Lower Hutt.
Under the plan, default contribution rates would rise by 0.5% annually from April 1, 2029, until reaching 6% in 2032.
Luxon said a 21-year-old earning $65,000 today could retire with around $1.4 million in KiwiSaver under the changes, about $400,000 more than under current settings.
“In Government, we are already lifting the default rate of KiwiSaver contributions for employers and employees from 3% to 4% by April 1, 2028,” Luxon said.
“But even after those changes, KiwiSaver contributions would be much lower than the equivalent scheme in Australia.
“For Kiwis working in New Zealand, that means smaller KiwiSaver balances and less financial security than friends or family working and saving in Brisbane, Sydney or Melbourne.
“Smaller retirement balances present a challenge for New Zealand as a whole, too, as we rely more on investment from offshore to fund the infrastructure, start-ups, and housing we need to grow our economy, create jobs and lift incomes.”
The policy would remain voluntary, with employees able to opt out or contribute at lower rates, while employers would be required to match contributions up to the default level. The minimum contribution rate for those who participate will remain at 3%.
National said the changes would cost the Crown about $90 million annually for each 0.5% increase. In his speech, the Prime Minister also flagged upcoming reforms within the existing term, including changes to local government.
National’s proposed new default contributions, which would be matched by employers
April 1, 2026: 3.5%
April 1, 2028: 4%
April 1, 2029: 4.5%
April 1, 2030: 5%
April 1, 2031: 5.5%
April 1, 2032: 6%