NZ First’s big compulsory KiwiSaver play
Monday, 8 September 2025
ANALYSIS: At NZ First’s 32nd convention in Palmerston North over the weekend, Winston Peters promised a new KiwiSaver policy.
Currently the retirement savings scheme is scheduled to go up to 8% of incomes in total by April 2028, a 4% contribution each from employers and employees.
NZ First is looking to supercharge that, by moving it to 8% each for employers and employees, heading to 10% each. So a total of 16% and then to 20% of someone’s salary will go to KiwiSaver.
To fund this, Peters says there will be tax cuts for employers and KiwiSavers, but that the detail would have to be worked out.
There is no point speculating how much that would cost - there are too many variables. But it is safe to say that if the fiscal cost of tax cuts were to vaguely compensate for the earnings or payroll going into KiwiSaver, it would rack up into the billions annually.
This is a carefully calibrated move by NZ First, seeking to bolster its credentials as a centrist solutions party thinking about massively boosting retirement savings - while also not proposing to raise the retirement age, or cut NZ Super and cutting taxes.
The principle of a high-contribution-over-time, compulsory super system is well worth consideration - if not this exact policy.
It would also help give birth to a massive new fund management industry in New Zealand, which would be ready to clip the ticket on 16% and then 20% of every wage and salary in the country.
It is the sort of policy which a minor party can make. It may or may not ever come to pass, but minor parties are not the ones expected to make the sums add up - that is up to Labour or National.
This is a familiar tune for Winston Peters and NZ First. In 1997, as part of the Coalition deal with National under the leadership of Jim Bolger, Peters got a referendum on a compulsory retirement savings scheme.
It got voted down by an almost unbelievable 92% of the voting public - and 80% of enrolled voters voted.
But it was clearly an idea whose time in New Zealand hadn’t come. Since KiwiSaver was introduced in the mid-2000s by Labour, it has become part of the system.
Looming large in the background to all of this is the Muldoonist scrapping of Norman Kirk’s compulsory superannuation scheme in 1975. This is still something that exercises a certain generation of New Zealanders who lament an Australian-style savings system two decades before the Aussie embarked on theirs under Paul Keating.
Most New Zealanders nowadays look enviously at friends or family in Australia, benefiting from the Australian superannuation system which includes a generous tax treatment for retirement savings.
Australia also has a tightly means-tested superannuation regime, and employers pay super (of course, as with KiwiSaver, it is built into the cost of employees’ remuneration, but employers are the ones who write the cheque).
In other words, this isn’t something Peters has stumbled onto recently, he has long thought it a good idea. It could also mean garnering more support and perhaps fund-raising from the the fund management industry.
More worrying was the idea that KiwiSaver would become a “New Zealand asset-owning entity”. KiwiSaver isn’t an entity, but private savings accounts with many providers which should only be trying to maximise returns.
Nevertheless, for NZ First this is clever politics. It can sit out there as an idea, while not being part of the mix until the next set of coalition negotiations, should NZ First be involved.
These things are also costless announcements. They aren’t part of the coalition deal, are designed for the next election and so can just hang around. For instance, readers probably won’t recall that at last year’s convention Peters promised a $100 billion “future fund”.
According to the party that is still being worked on. This year’s policy will be more remembered.
After all, on the current polling NZ First seems to be heading for between 8-10% of the vote. The party may well be in a position to ask for more come 2026.