Parties clash over compulsory KiwiSaver contributions and tax reforms

In the upcoming election, five parties are outlining distinct KiwiSaver reforms. National would make both employee and employer contributions mandatory, lifting the default rate from 3.5% to 6% by 2032, and would also fund employer contributions during paid parental leave. Labour mirrors the employer side of the plan but keeps employee contributions voluntary, maintaining a legislated rise to 4% in 2028.

NZ First calls for compulsory 8% contributions for both sides, eventually reaching 10%, and proposes cutting the corporate tax rate for firms under $30 million. Act rejects any compulsory increase, focusing on eliminating tax on KiwiSaver fund earnings, which totalled over $10 billion last year, while halving the government contribution to $5 a week. The Opportunity Party’s “KiwiSaver 2.0” mirrors National’s compulsory 6% rate and adds phased tax deductibility, embedded in a wider tax overhaul that includes a land tax and universal basic income. Analysts warn that compulsory contributions could strain low-income earners and raise fiscal pressures amid concerns about future NZ Super costs.