Labour's 6 Percent Employer KiwiSaver Plan Explained
Labour would lift employer KiwiSaver contributions to 6 percent if it wins the election. The pledge sits at the centre of its election policy on retirement saving RNZ.
Workers would not be forced to pay more. Labour said it kept employee contributions voluntary to ease pressure during the cost of living crisis. Compulsion here means a legal requirement to contribute. Under the plan, employers would pay more. Employees would not have to.
Labour set out the plan in a release titled "Labour will strengthen KiwiSaver for future generations" Labour. It says the plan will make KiwiSaver work harder for more New Zealanders, helping people save, build wealth and retire with security.
The announcement led to disagreement over ownership. Finance Minister Nicola Willis called Labour's policy a "watered-down" version of National's policy. National announced its own KiwiSaver proposal in June. Labour has not accepted that description.
Simplicity KiwiSaver managing director Sam Stubbs commented on the timing. He said National had "ankle-tapped" Labour on KiwiSaver policy. Both major parties now say they lead the debate on reform.
Labour also won backing from Anne Collins, the wife of Sir Michael Cullen. She described the policy as a "perfect solution" and said she was "absolutely delighted" with it. Cullen set up the KiwiSaver scheme.
The debate follows scrutiny of fees in the industry. Stuff reported in August that KiwiSaver managers earned $1.2 billion in fees this year Stuff. Labour has talked about making the scheme work harder for savers.
The broader context for the campaign is a narrow gap. Neither party proposes compulsion for employees. Both focus on the employer share. The practical questions are how fast the higher employer rate would phase in, meaning rise step by step, how employers would factor it into wages and hiring, and whether voters see voluntary worker rates as relief now or a slower path to adequate savings.
In my view, the language is as telling as the numbers. National claims imitation. Labour points to stewardship through its link to Cullen. Labour uses the cost of living argument to avoid compulsion while still lifting balances through employers. That line is likely to test well with focus groups of voters, but economists and funds who want higher total contributions will press harder questions.
