Opinion: Election promises are focusing on the next six months, but Frances Cook speaks to four financial experts who would prefer to shift the focus to the next 20 years.
Every election, the money promises come thick and fast.
This year is no exception, but now there are warnings a severe case of short-term-itis could doom us to staying in a rough spot with our money.
Fuel prices are spiking, the Reserve Bank is warning interest rates are likely to keep going up, and the cost of living just keeps squeezing.
But when I asked four money experts what the parties are getting right and what they’re missing, they all said a version of the same thing.
We’re not looking far enough ahead.
KiwiSaver is the obvious example. Almost all of the parties have trotted out a plan to change the scheme.
But as we come up to its 20-year anniversary, we have a golden opportunity to have a thorough review of the scheme that's the lifeline of financial stability for so many.
Do it once, do it right, goes the maxim. But when it comes to KiwiSaver our politicians seem determined to fiddle around the edges instead.
The experts’ message? Stop thinking about the next six months, and start thinking in decades.
Design the whole system
Dean Anderson, founder and CEO of investing platform Kernel, says the problem isn’t any one policy. Some of the proposed KiwiSaver changes would be very welcome, in his book.
The problem is that nobody is joining up the policies to have an overall strategy.
“We’re having a lot of conversation about the here and now, who’s got the right solution for the next six months and next twelve months, but nobody’s actually just presenting what is the vision for New Zealand.”
He points out that KiwiSaver, NZ Super, and financial education in schools all affect each other, but get argued about as if they’re separate.
“We’ve got to design the whole system, not just playing with a little point here and there to win some political votes.”
Financial education for kids is one area where this bites hard. Ten years ago around 30% of under-18s had a KiwiSaver account.
But it’s slid to 15%, over the ten years since the $1000 kickstart for new members was scrapped.
Anderson says it would only take small changes to link some of these disparate areas.
Bringing back an incentive for kids to join could be tied to financial literacy in schools, as the younger generation is more likely to pay attention to the money lessons when they have a real world example to practice on.
Stop tinkering, make big changes, then stop
Professor Claire Matthews, head of Massey University’s school of accountancy, economics, and finance, says the biggest long-term risk is politicians who keep proposing small changes, leaving savers feeling uncertain of the future.
She sees KiwiSaver's 20th birthday as an opportunity to have a cross-party working group review the entire thing, decide on any changes, and then commit to leaving it alone.
“Every time it gets tinkered with, it undermines the public’s confidence in it.”
Asked whether cost-of-living pressures are being addressed in the election debate, Matthews says the problem isn’t just petrol prices or interest rates themselves, but how far they spread through the economy.
“Almost everything you buy is going to be influenced by petrol prices, and interest rates.”
Meanwhile, pay isn’t keeping up.
“So people are getting more and more behind, because wages aren’t moving the same way.”
It’s not a squeeze that any of the one-off election sweeteners currently on offer can fix.
Start early and (maybe) forget about the house
EnableMe financial adviser Michael Gorin says the slide in property values over recent years has left New Zealanders looking for a different way to feel financially secure.
For a long time, many New Zealanders aimed to build wealth through property, particularly by paying off the family home. That worked well if you could afford to buy in, not so well if you couldn’t.
Now many have the jitters, as Realestate.co.nz figures show Auckland prices are down 22% between January 2022 and September 2026, while the national average is down 13%.
While this means some people are now looking to buy in at a bargain, others are looking for alternatives.
Gorin says that managed funds and shares are easier to access, with no deposit needed to get started.
He says that’s one reason why it’s been so good to see KiwiSaver become such a big part of the election, as it’s clear investing as a way to build wealth is becoming a normal part of the financial system.
But the real payoff takes decades, and that’s why there needs to be more emphasis on getting people started early.
“Money you invest when you’re young will be working with you for four decades, and that’s a really powerful force.”
Competition as one of the few long-term fixes?
One of the debate points has been whether forcing more competition in key sectors of the economy could bring down the cost of living.
National has suggested splitting up the supermarket chains, while Labour wants to ease banking rules to make it a smoother process for new players to enter the banking market.
Global fintech Revolut is a challenger in the New Zealand market. Head of Revolut NZ Georgia Grange says the overseas experience makes it clear that when a handful of players dominate an industry, it leads to complacency and low innovation.
She says that in the UK and Australia, improved competition led to better interest rates, and rewards for customers.
Grange says it’s a balance to ensure there are still rules to protect customers, but those rules are actually unclear at the moment, and that’s part of the problem.
As with all competitions, the players need rules.
“We do actually need clearer regulations," says Grange.
The information in this column is general in nature and should not be taken as individual financial advice.
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