Act Party Announces Multibillion-Dollar Tax Cut for KiwiSaver Accounts

The Act Party has proposed a multibillion-dollar tax cut for New Zealanders' KiwiSaver accounts. Leader David Seymour announced this policy at the party's election campaign launch in Auckland, saying it would mean 'more of your investment returns stay invested and more of your money is left to compound over your working life.'

The policy would abolish the tax paid on investment earnings made through KiwiSaver and other superannuation accounts. This would create a significant amount of tax relief, which Act estimates would be greater than what was previously provided through the Government contribution.

However, the party would also remove the Government contribution for KiwiSaver members receiving employer contributions. According to Act's costings, this change would result in reduced Government revenue of just under $4.1 billion over four years. While removing the Government contribution would save about $2.6 billion, the overall policy costs around $2.4 billion.

The tax relief created by abolishing the tax on earnings would not be spread evenly, with those having larger KiwiSaver balances benefiting more as they are investing more money and therefore have greater potential for larger returns. Act has provided case studies showing its calculation for what its policy could mean for different people, assuming investment returns and contributions. For example, a 20-year-old builder earning $60,000 would have an additional $209,486 in their KiwiSaver by the time they reach age 65.