National proposes compulsory KiwiSaver

Chris Luxon has announced National policy to make KiwiSaver compulsory if re-elected.

The Government has already lifted the minimum contribution rate from 3.0% to 3.5%, which 99.5% of default rate savers went with – only 0.5% went back to 3.0%.

Luxon announced four big changes to KiwiSaver:

• Making KiwiSaver compulsory from 1 July 2028 for employees
• A $1,500 KiwiSaver account for every baby born from 1 July 2027
• The Government to make employer contributions for parents on paid parental leave
• Extending matching employer contributions for KiwiSaver to those still working at age 65 and above.

The cost over time will be $360 million a year – funded out of the future Budget operating allowances.

I love the idea of every baby getting a KiwiSaver account. The cost is quite small (under $100 million a year) but fostering a savings culture in kids is so important. We have KiwiSaver accounts for our kids (and I do a matching contribution for what they save). A culture of self reliance is a core National Party belief.

This also sets the stage for a more sustainable NZ Superannuation scheme in future. If every New Zealander, over time, has significant private savings, this allows public superannuation to be set at a more affordable level at some future stage.