National admits KiwiSaver changes may affect public sector pay
Thursday, 27 November 2025
National has acknowledged its election promise to boost KiwiSaver contributions may be partly offset by “lower-than-otherwise wage increases” in the public sector, but says employer contributions have always formed part of wage negotiations.
The Public Service Association has called it offensive, while Labour is signalling its own KiwiSaver policy is on the way.
National announced on Sunday it would lift total contributions to 12% between employees and employers if re-elected next year. It would mean by 2032, employees would have the option to put 6% into their KiwiSaver, which employers match.
Prime Minister Christopher Luxon said if they were serious about building the future - “it’s time to aim higher”.
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The Government - the biggest employer in the country - would be impacted, National allocating an estimated $90 million a year for each 0.5% increase to pay for the boosted KiwiSaver contribution.
Asked how just $90m would fit into a Crown bill of personnel cost of almost $40 billion, a spokesperson from the prime minister’s office said that, among other factors, “some of the increase in contributions is assumed to be offset by lower-than-otherwise wage increases”.
They said it also factored in personnel costs outside wages, state-owned enterprises which are not included and for people in schemes outside KiwiSaver.
National said in its KiwiSaver factsheet that, “as has always been the case with KiwiSaver, employer contributions may effectively form part of the wage negotiation process”.
PSA national secretary Fleur Fitzsimons said the idea public servants should accept “even lower wage growth to fund National's KiwiSaver policy is offensive”.
“The National Party KiwiSaver policy is only days old and already we are seeing them trying to shortchange public sector workers. If all employers take this approach, the policy will drive down wages and is doomed.”
Labour leader Chris Hipkins on Wednesday signalled his party had been working on its own KiwiSaver policy “for a while”.
He said that there needed to be a look at “how you stop the total [remuneration] approach, which basically drives down take home pay, because that will actually leave people, in the short term financially worse off”.
Finance Minister Nicola Willis on Sunday said employers had been some of the biggest supporters of change to KiwiSaver.
“I think employers will get on board with this vision. It's important they have time to plan … but actually, all of us are invested in a better economic future for New Zealand and employers are no different.”
Regarding the $90m figure, the spokesperson said it was an estimate of an 0.5% increase in KiwiSaver contributions for the core Crown and Crown entities.
“It won’t be $90 million a year forever - this figure will grow over time but the offset through increased employer superannuation contribution tax will also grow over time.”
National expected that cost to be met within baselines of agencies, but acknowledged funding could be available for certain agencies.
“This would be met from future Budget allowances if required.”