KiwiSaver ‘unfinished business,’ says Labour’s Barbara Edmonds - but NZ super age is set

Thursday, 11 September 2025

KiwiSaver is ”unfinished business”, but Labour finance spokesperson Barbara Edmonds wasn’t ready to reveal to the Financial Services Council what policies her party would take to the next election.

However, she favoured increasing KiwiSaver contributions over time to lift savings rates, and criticised the cuts to government KiwiSaver contributions.

And she appeared to indicate that Labour would move to close the KiwiSaver “total remuneration” loophole that has seen many lower-paid workers miss out on employer contributions.

On Wednesday, the conference in Auckland heard that 30% of people with KiwiSaver accounts were saving nothing into them, and total remuneration was partly to blame.

KiwiSaver manager Rupert Carlyon from Kōura Wealth said the quickest fix for flagging KiwiSaver contribution rates would be to close the total remuneration loophole.

When KiwiSaver was set up, all workers who joined could expect employer contributions to match their own contributions. But when National took power in 2008, it changed the law to allow employers to strike individual agreements with employees under which they could deduct their employer contributions from their salaries.

Total remuneration was supposed to be only for those at the top end of the executive pay scale, but it has ended up being written into the contracts of some of the lowest-paid workers.

On Wednesday, Finance Minister Nicola Willis told delegates that National would be taking new KiwiSaver and NZ Super policies into the next election.

It looked likely that part of that would include a return to National’s earlier plan of gradually lifting the age at which people qualified for NZ Super to 67.

Edmonds ruled out Labour moving to increase the age of eligibility for NZ Super.

There has been some irritation at the conference over the Government’s recent cuts to government contributions, which had weakened incentives for the likes of the self-employed to save into KiwiSaver at all.

That was part of the Budget in May, when Willis claimed that to make KiwiSaver “sustainable” the state’s annual contribution had to be cut, halving the maximum government contribution a saver could get from $521 to $260.

However, there was support for Willis having announced that the minimum KiwiSaver contribution rate from workers’ salaries would rise from 3% to 4%.

The FSC is the political lobbying association for insurers and KiwiSaver managers, and each year high-ranking politicians attend its conference.

Earlier in the conference, economist Oliver Hartwich from the New Zealand Initiative think tank argued New Zealand’s weak economic performance might be turned around by learning lessons from other successful small countries like Ireland, Denmark and Switzerland.

Edmonds said the answers to New Zealand’s economic underperformance could be found at home.

“What we lack is not talents or ideas. What we lack is a long-term plan,” she said.

“For decades, successive governments have repeatedly denied their ability to fix major problems, waiting for growth to trickle down or put interest rates and house prices to somehow solve the problem.

“This Government is doing the same, looking overseas for answers instead of backing the skills, ideas, and innovation you already have here today.

“If we work together with clear priorities and a long-term plan, we can build an economy that not only eases the immediate cost pressures family space, but also creates the foundations for long-term prosperity that benefits everyone,” she said.

However, Edmonds has been looking overseas.

“When I look across the Tasman as to why our young people might be attracted to Australia, I do see an economy with high saving rates, large domestic pools of capital, research and development incentives, and yes, a tax system that encourages investment in local businesses and not just jobs and new jobs, not just houses,” she said.

But, she would not say what policies Labour would take to the next election that could replicate some of Australia’s successes.

“In the weeks ahead, Labour will be sharing more detail of our economic plan, a plan designed not just to manage the economy but to shape it and unlock new opportunities,” she said.