I aimed to send the audience out fired-up for election day.
On Sunday, I went to Act’s campaign opening.
It was in a huge, new, echoing warehouse. It was so large, Act drove in its full-sized campaign bus.
The crowd of 400-odd people and the bus occupied about a quarter of the space. We could have fitted in a New Zealand Breakers match and its crowd.
There were no hecklers and no rent-a-mob outside.
Act leader David Seymour’s address was more like a Ted Talk.
He gave an erudite explanation of why the cost-of-living crisis is really a productivity crisis.
His solution was from the 18th century. He quoted Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations. Yes, he used the book’s full name.
Wealth, he said, comes from free markets, protection of property rights and freedom to contract. Profit means a business is serving its customers.
I have never heard a politician give such a strong defence of business and free enterprise, certainly not at a campaign meeting.
He is right, of course, but I wondered if it is election-winning.
Seymour even admitted his best political stinger came from a supporter: “Act’s job is to keep Labour out of government and Labour’s ideas out of National.”
It reflects how the campaign meetings we see are just a fraction of the real contest being conducted out of our sight on social media.
Seymour’s talk will make a good podcast for an audience far larger than the one in the warehouse.
Then, almost as an aside, he announced a policy that could be an election game-changer.
All the other parties are campaigning, in one form or another, to make KiwiSaver compulsory.
It is not a tax, but for the million who have not joined KiwiSaver, being required to contribute will feel like one.
Act would keep KiwiSaver voluntary. Seymour announced a change that will make it much more attractive: KiwiSaver investment earnings would be tax-free.
Today, KiwiSaver contributions largely come from taxed income. Investment earnings are taxed each year. Payouts are tax-free.
Tax, tax, free.
The difference between being taxed each year and tax-free is huge.
Seymour gave the example of a 25-year-old nurse earning $100,000. He calculates that, on existing settings, making his or her KiwiSaver earnings tax-free would leave him or her with an extra $217,366 at age 65.
Let’s say the employer contribution ultimately comes from our nurse’s total remuneration; then, at 8% rather than National’s proposed 12%, over her working life she would take home well over $100,000 more.
Seymour has an attractive alternative for wage earners, but I think he has a winner for retirees.
It is a solution to a problem politicians do not even acknowledge.
When I was younger, I could afford to take risks. If an investment failed, I had time to recover.
Now I am retired. If I lose my savings, I cannot replace them.
Politicians say bank savings are safe, but after inflation and tax on the interest, I can receive a poor real return.
New Zealand’s history is littered with retirees who lost their life savings seeking better returns in supposedly safe investments – JBL, Equiticorp, Bridgecorp, Hanover, Blue Chip and others.
No wonder 257,287 people aged 65 and over are members in KiwiSaver.
Unlike the under-65s, they can withdraw at any time.
If KiwiSaver earnings become tax-free, why would I leave long-term savings in a bank deposit paying taxable interest rather than put them into a conservative KiwiSaver fund?
I suspect hundreds of thousands of retirees will embrace a relatively safe, tax-free investment that gives them a return.
Act would abolish the annual taxpayer contribution of $260.72, but even for modest savers, the tax-free benefit could be worth far more.
Act estimates its policy will cost about $2.4 billion over four years. We need to see its fiscal plan to know where the savings will come from.
I think Act has underestimated its popularity.
And how sustainable will tax on bank interest be when KiwiSaver earnings are tax-free?
Seymour presented his proposal as an alternative to compulsory KiwiSaver.
I left the campaign opening thinking he had proposed something much more consequential.
Seymour may have announced the 2026 election’s game-changer.
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