dollar KiwiSaver tax cut, to remove Government contribution
New Zealand's Act Party has proposed a policy to abolish taxes on KiwiSaver investment earnings while removing the government's annual contribution. The party argues this will encourage long-term compounding, though critics note it may disproportionately benefit those with larger balances.
Why it matters
The proposal represents a significant shift in retirement savings policy, sparking debate over equity and the role of government incentives in personal finance.
Act leader David Seymour at the party's election campaign launch in Auckland. Photo / Jamie Ensor
The Act Party is proposing a multibillion-dollar tax cut for New Zealanders’ KiwiSaver accounts by abolishing the tax paid on investment earnings made through KiwiSaver and other superannuation accounts.
But there’s a catch: Act would also remove the Government contribution (up to $260.72 a year) for KiwiSaver members receiving employer contributions.
The announcement is being made this afternoon in Auckland and is being livestreamed at the top of this file.
The party says the tax relief created by abolishing the tax on earnings would be more substantial than what was provided through the Government contribution.
Act’s costings show the amount of revenue the Government would forgo by removing the tax is expected to increase annually.
The lost revenue is larger than what Act expects to save by removing the Government contribution.
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