Has National stolen the KiwiSaver crown?
Tuesday, 25 November 2025
Sam Stubbs is the managing director of KiwiSaver fund Simplicity and a regular commentator on financial and economic issues.
OPINION: The announcement by the National Party that they want KiwiSaver contributions to rise is - perhaps - their most significant announcement since taking power.
Why? For several reasons.
The first is that this is the first time National has unequivocally backed KiwiSaver. As it was created by Labour, KiwiSaver has been viewed by National as the “other side’s” idea. Accordingly - and in spite of its growing popularity - successive Ministers of Finance in National-led coalitions have chipped away at it, first by taking away the $1000 kick start, and then halving, and halving again, the tax credit for KiwiSavers.
And even Nicola Willis’s recent increase in contribution rates from 3% to 4% was somewhat muted by her halving the $512 tax credit, and removing it altogether for those earning over $180,000.
But in this announcement, National has unequivocally said they want KiwiSaver to grow, and that it’s key to a more affordable retirement for many. And they - pardon the pun - are right.
The second reason this is so significant is that it is their first major election policy, showing that 2026 will be a KiwiSaver election. NZ First deserves credit for throwing down the gauntlet last month with its proposed 10% contribution. But National’s policy here is the really big deal, because it is both costed, and a reversal from previous scepticism to unequivocal support of KiwiSaver.
National’s is not a perfect policy by any means. But in seeking to copy Australia, they have paid attention to arguably the most successful pension scheme in the world. And sometimes it’s best just to copy what’s worked elsewhere. And in the case of Australia, what we’re copying has worked magnificently, because they have five times our population, but 35 times our retirement savings. And investing all that money through the cycle has meant only one year of recession in the last 26 years. Let’s have some of that please.
And National’s new KiwiSaver growth policy is a clear indication of how popular KiwiSaver is. One fund manager recently did a Net Promoter Score for KiwiSaver and found it more popular than our favourite chocolate. Why? Because more than 3 million Kiwis are in KiwiSaver, no scheme has gone bust, many have made good returns and tens of thousands have benefited from it helping them buy their first home, or when in hardship. KiwiSaver has been a very positive experience for millions of Kiwis.
So how could Labour steal the KiwiSaver crown back? Quite easily. There is a mixture of compulsion and incentives required that, if implemented, could cement KiwiSaver as every New Zealander’s default wealth creator.
Compulsion is necessary, as those who don’t have KiwiSaver will slip further and further behind. And those without KiwiSaver will find buying a first home and having access to cash in hard times even harder.
Likewise we need some incentives to save. A kid’s KiwiSaver account is a logical thing now, and a Government subsidy of - say - $500 a year, would mean every Kiwi kid had almost $20,000 in their KiwiSaver account by the time they were 20. Topped up by parents and grandparents, it’s a great start in life. And it could be fiscally neutral if remaining tax incentives for adults were taken away. Tax credits are not a vote winner, which is why National has reduced them twice. But a funded KiwiSaver for kids would be - in my opinion - a very popular policy.
In hindsight I suspect we will view Michael Cullen’s establishment of KiwiSaver as significant as the formation of other great institutions like the ACC, EQC, Pharmac and the NZ Super Fund. And history will likely show it to be as significant as Australia establishing their super scheme in 1985.
The tragedy here is that had we retained the KiwiSaver-like scheme the Rowling Government set up in 1975, we would collectively have over $1 trillion saved by now. But we cannot cry over spilled milk. What we can, and should do, is applaud NZ First and National for wanting to grow KiwiSaver, and make it a central election issue. And now that National has stolen the KiwiSaver crown, the ball is firmly in Labour’s court to steal it back. KiwiSavers will be the winners either way.
Our kids and grandkids will probably never understand the importance of the recent KiwiSaver announcements. But they will certainly benefit mightily from them.