National Party Promises KiwiSaver Contribution Rate Increase

The National Party has announced plans to raise the default KiwiSaver contribution rate if it secures re-election in the 2026 general election. This policy marks the party’s first significant commitment ahead of the election, which is still approximately one year away. In this year’s Budget, the government confirmed an increase in the default contribution rate from 3% to 4% by 2028.

During a speech in Upper Hutt, National Party leader Christopher Luxon highlighted the disparity between New Zealand’s KiwiSaver scheme and Australia’s equivalent. He expressed concern that Kiwis working in New Zealand are at a financial disadvantage compared to their counterparts in cities like Brisbane, Sydney, or Melbourne. “For Kiwis working in New Zealand, that means smaller KiwiSaver balances and less financial security than friends or family working and saving in Brisbane, Sydney or Melbourne,” Luxon stated.

Gradual Increase Proposed

Luxon outlined a plan to gradually increase the default contribution rates by 0.5% annually until 2032. By that time, both employees and employers would contribute 6% each, resulting in a combined rate of 12%, matching the rate in Australia. The policy is expected to cost around $90 million annually for each 0.5% increase, with funding anticipated to be sourced from within existing agency budgets.

Unlike Australia, participation in the KiwiSaver scheme would remain voluntary. The recent budget also revealed that the government halved its annual contribution to a maximum of $260.72 and eliminated it for individuals earning over $180,000 annually.

Focus on Financial Security

In a statement, Luxon emphasized that enhancing KiwiSaver would bolster financial security for New Zealanders in retirement. He noted that financial security for retirees is supported through home ownership and long-term savings. “KiwiSaver supports both of those, so National will strengthen it further,” he said.

Luxon also provided a projection for young Kiwis, stating that a 21-year-old earning $65,000 today could accumulate a KiwiSaver balance of around $1.4 million by retirement, which is approximately $400,000 more than under the current contribution settings. “If you’re a New Zealander who does the right thing by working hard and saving for the future, you deserve to get ahead,” he added.

Today’s speech coincided with the two-year anniversary of the coalition government, which is set to be commemorated on Thursday. The National Party’s pledge aims to address the financial aspirations of New Zealanders as the country prepares for the upcoming election cycle.