I aimed to send the audience out fired-up for election day.<\/p>\n
On Sunday, I went to Act\u2019s campaign opening.<\/p>\n
It was in a huge, new, echoing warehouse. It was so large, Act drove in its full-sized campaign bus.<\/p>\n
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.<\/p>\n
There were no hecklers and no rent-a-mob outside.<\/p>\n
Act leader David Seymour\u2019s address was more like a Ted Talk.<\/p>\n
He gave an erudite explanation of why the cost-of-living crisis is really a productivity crisis.<\/p>\n
His solution was from the 18th century. He quoted Adam Smith\u2019s An Inquiry into the Nature and Causes of the Wealth of Nations. Yes, he used the book\u2019s full name.<\/p>\n
Wealth, he said, comes from free markets, protection of property rights and freedom to contract. Profit means a business is serving its customers.<\/p>\n
I have never heard a politician give such a strong defence of business and free enterprise, certainly not at a campaign meeting.<\/p>\n
He is right, of course, but I wondered if it is election-winning.<\/p>\n
Seymour even admitted his best political stinger came from a supporter: \u201cAct\u2019s job is to keep Labour out of government and Labour\u2019s ideas out of National.\u201d<\/p>\n
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.<\/p>\n
Seymour\u2019s talk will make a good podcast for an audience far larger than the one in the warehouse.<\/p>\n
Then, almost as an aside, he announced a policy that could be an election game-changer.<\/p>\n
All the other parties are campaigning, in one form or another, to make KiwiSaver compulsory.<\/p>\n
It is not a tax, but for the million who have not joined KiwiSaver, being required to contribute will feel like one.<\/p>\n
Act would keep KiwiSaver voluntary. Seymour announced a change that will make it much more attractive: KiwiSaver investment earnings would be tax-free.<\/p>\n
Today, KiwiSaver contributions largely come from taxed income. Investment earnings are taxed each year. Payouts are tax-free.<\/p>\n
Tax, tax, free.<\/p>\n
The difference between being taxed each year and tax-free is huge.<\/p>\n
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.<\/p>\n
Let\u2019s say the employer contribution ultimately comes from our nurse\u2019s total remuneration; then, at 8% rather than National\u2019s proposed 12%, over her working life she would take home well over $100,000 more.<\/p>\n
Seymour has an attractive alternative for wage earners, but I think he has a winner for retirees.<\/p>\n
It is a solution to a problem politicians do not even acknowledge.<\/p>\n
When I was younger, I could afford to take risks. If an investment failed, I had time to recover.<\/p>\n
Now I am retired. If I lose my savings, I cannot replace them.<\/p>\n
Politicians say bank savings are safe, but after inflation and tax on the interest, I can receive a poor real return.<\/p>\n
New Zealand\u2019s history is littered with retirees who lost their life savings seeking better returns in supposedly safe investments \u2013 JBL, Equiticorp, Bridgecorp, Hanover, Blue Chip and others.<\/p>\n
No wonder 257,287 people aged 65 and over are members in KiwiSaver.<\/p>\n
Unlike the under-65s, they can withdraw at any time.<\/p>\n
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?<\/p>\n
I suspect hundreds of thousands of retirees will embrace a relatively safe, tax-free investment that gives them a return.<\/p>\n
Act would abolish the annual taxpayer contribution of $260.72, but even for modest savers, the tax-free benefit could be worth far more.<\/p>\n
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.<\/p>\n
I think Act has underestimated its popularity.<\/p>\n
And how sustainable will tax on bank interest be when KiwiSaver earnings are tax-free?<\/p>\n
Seymour presented his proposal as an alternative to compulsory KiwiSaver.<\/p>\n
I left the campaign opening thinking he had proposed something much more consequential.<\/p>\n
Seymour may have announced the 2026 election\u2019s game-changer.<\/p>\n