Adam Bennett

Adam is a political reporter for the New Zealand Herald.

NZ First's KiwiSaver stance may kill deal

Winston Peters has a bottom line.
Winston Peters has a bottom line.

New Zealand First has put a potential roadblock between itself and a post-election coalition deal with Labour by setting a bottom line on retirement savings that Labour is lukewarm on at best.

Leader Winston Peters told NZ First's annual conference in Christchurch yesterday that the party wanted to effectively nationalise KiwiSaver by putting it "on the same footing as the New Zealand Super Fund".

That meant "world-class, government-commissioned savings fund management. "We'll call it the KiwiFund."

Money put into the fund would be state-guaranteed and because of economies of scale and "the elimination of hordes of ticket clipping fund managers", costs would be reduced.

His attack on the funds management industry included claims it had sucked $325 million in fees from KiwiSaver accounts over five years and would take $22 billion in fees over the next 30 years.

The KiwiFund policy was "most definitely" a bottom line for any post-election coalition talks next year.

But while Labour leader David Cunliffe said his party was happy to look at the policy in more detail, "we don't think that the KiwiSaver industry is fundamentally broken.

"Our starting position is to make KiwiSaver universal. Increase the amount of funds going into it, make sure the fees aren't too high, make sure they're proportionate to risk, and ensure that Kiwis get a good payout."

Financial Services Council chief executive and former Labour Cabinet Minister Peter Neilson said Mr Peters' comments were "way off the mark".

"Current fees for KiwiSaver have been certified as not unreasonable by the Government Actuary", he said.

"People who are unhappy with KiwiSaver management fees have a wide choice of over 20 providers who compete vigorously for the business and there will be further scrutiny with fee levels included in the Government's tender criteria for selecting KiwiSaver default fund providers for the next seven years."

In his speech yesterday, Mr Peters also hit out at the lack of transparency and accountability in funding for Maori organisations and initiatives.

"It's a blight on Maoridom. Maoridom does not deserve it. They have had their numbers used to gain these sorts of funds and the people at the top have abused them terribly."

Mr Peters also expanded on his criticism of the National Government and insurance industry response to the Christchurch earthquakes and repeated his call for an inquiry into the banking and insurance industries with the possibility of establishing a new state-owned insurer.

Prime Minister John Key has dismissed the proposal by Mr Peters to effectively nationalise KiwiSaver, saying the NZ First leader "talks in riddles".

Mr Key said the scheme would put billions of dollars of 'mum and dad' savings at risk.

He slated Mr Peters' plan saying the only reason it may prove cheaper is because "monopolies usually are".

"All of New Zealand's private savings in KiwiSaver would be managed by one group. Well what happens if they have a bad year? Or two bad years?" he asked Newstalk ZB this morning.

"So I don't think it's a very good idea. It won't save any money."

- Additional reporting by APNZ

- NZ Herald

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