Money being forced into KiwiSaver under National's major election policy could potentially be better off spent paying off Kiwis' mortgages, says ACT Party leader David Seymour.
Yesterday, Christopher Luxon announced a suite of changes to the work-based retirement savings scheme if re-elected — including enrolling all New Zealand workers into the previously voluntary programme.
The newly announced policies would require everyone to be contributing to the scheme from mid-2028, or another comparable savings scheme, and it would increase contribution rates to a combined 12% by 2032.
Every child born from July 2027 would also be automatically enrolled in the scheme and would receive an automatic $1500 kickstart payment.
Speaking to Breakfast, Seymour said he thought the KiwiSaver policy would be "very popular at first blush", but questioned whether it would leave people better off financially.
"Everyone loves compulsion [until] you ask where the money comes from," he said.
"The challenge I would put is it is right to say, take a young couple, have just had their first couple of kids, and they are trying pay down their mortgage, to say we're going to take 12% out of their income. And let's not kid ourselves, the 6% that comes from the employer, that comes from your possible renumeration.
"So it's 12% out of your total possible pay, and that's going to be put into a fund, you're going to pay KiwiSaver management funds, and there's a big lobby that will be celebrating with the champagne corks down on Queen Street as a result of this."
He said homeowners would pay more interest "because you pay off your mortgage slower".
"I don't know if you're better off, so I think there should be a carve out for paying off your mortgage."
He also asked whether people should "be able to put your money into your small business rather than have to be forced to save this 12%".
"Then you say, 'oh, but what about people aren't doing that? People [who] are poor money managers? Well, if they're going to end up running up more money on their credit card, does that leave them better off?
"I think overall this is a big gift for the financial services sector. I'm not sure it will leave people better off in total," he said.
Asked whether he would veto it during potential coalition discussions, Seymour said he would look at how he can get some "exemptions in the first part", and have to "see how the election turns out".
"If we're going to have a centre-right government with ACT and National, then it needs to be based on robust economics."
Breakfast presenter Tova O'Brien said Prime Minister Christopher Luxon was asked to come onto the show to discuss the party's policy announcement, but declined.
In April, Luxon announced he would no longer appear on Breakfast for his weekly Monday media appearance, which broke a decades-long tradition with the TVNZ show.
"He said he would appear on a case-by-case basis. So far we have been declined on every case, including today," she said.
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