ACT Leader to Unveil Financial Policy at Campaign Launch
ACT Party leader David Seymour is scheduled to make a major financial announcement at the party’s 2026 election campaign launch in Auckland. The proposal centers on significant changes to New Zealand’s retirement savings system, specifically targeting KiwiSaver accounts.
Seymour outlined plans to abolish the tax paid on investment earnings made through KiwiSaver and other superannuation accounts. This policy shift is designed to alter how funds grow within these accounts over an individual's working life.
Details of the Proposed Tax Relief
The ACT Party’s proposal involves removing the Government contribution, which currently provides up to $260.72 a year for KiwiSaver members who receive employer contributions. The party claims that the tax relief gained from abolishing earnings tax would be more substantial than the savings resulting from the removal of this government contribution.
According to ACT’s calculations, the lost revenue from the tax cut is expected to increase annually and exceed the savings generated by removing the government contribution.
Seymour stated that the changes would mean “more of your investment returns stay invested and more of your money is left to compound over your working life.” He contrasted ACT’s approach with that of coalition partner National, noting, “We don’t support compulsion, but we want to offer a sweetener to KiwiSavers,” and argued that the current tax system works against savers.
Projected Benefits for Members
The policy is likely to benefit those with larger KiwiSaver balances more due to their greater potential for returns. ACT provided case studies to illustrate the potential impact of the proposal.
According to these calculations, a 20-year-old builder earning $60,000 would have an additional $209,486 in their KiwiSaver by age 65 under the new rules. Similarly, a 50-year-old office manager earning $80,000 would see an additional $20,878.
These figures assume that individuals currently hold the average KiwiSaver balance for their respective ages and are based on ACT’s assumptions regarding investment returns and contributions.
Fiscal Impact and Cost Estimates
An Act policy document states that under the current system, “The only real winner from this money-go-round is the bureaucracy that clips the ticket along the way.”
Over a four-year forecast period, ACT says the KiwiSaver change would result in reduced Government revenue of just under $4.1 billion. Approximately $900 million of this reduction would apply to other superannuation accounts.