Northland farmers push for KiwiSaver access to buy first farms, herds

Northland Federated Farmers president Colin Hannah said young farmers should be able to access KiwiSaver funds to buy a farm. Photo / Denise Piper

Some Northland farmers are backing a call to allow young farmers to access their KiwiSaver funds to buy their first herd, home, farm, or flock while others warn it could be a “slippery slope”.

Federated Farmers recently launched a nationwide petition calling on the Government to urgently change the KiwiSaver rules to help young farmers get ahead, build equity, and progress in the industry.

Northland Federated Farmers president Colin Hannah said for some, accessing their KiwiSaver to buy their first farm, flock, herd or home would be beneficial.

“A farm is a home,” he said.

“You can’t use KiwiSaver to buy the farm, which is where you would live anyway.”

Hannah said the way farming was structured with sharemilkers and lower-order sharemilkers meant some couldn’t access KiwiSaver for their first home.

Usually, lower-order sharemilkers live on the farm they manage, as the owner is often required to provide rent-free accommodation for them.

However, those wanting to access their KiwiSaver for their first home need to live in the property as their primary residence for at least six months.

“The lower order sharemilker who may be living on the farm should be able to buy a house in town,” Hannah said.

“You’re living on the farm but can’t use your KiwiSaver to buy a place.”

Finance Minister Nicola Willis has said she was seeking advice from the Inland Revenue Department (IRD) on the matter, which is yet to be considered by Cabinet.

Finance Minister Nicola Willis says she is seeking advice on the matter.

Willis said she was “on the Fed Farmers’ side”, but wasn’t sure where she would draw the line in terms of which farm-related assets withdrawals could be used for.

She wouldn’t say why she thought it was okay for KiwiSaver funds to be used for a farm, but not another type of business.

Awanui dairy farmer Will Tye said he supported the move to pull down KiwiSaver to buy an income-earning asset, such as a farm, “in general”.

“It would help young farmers a little bit.

“You’re talking a little bit, but every bit does help.

“Farms are expensive, so being able to utilise all your capital to buy a farm is important.”

Currently, members who have been in KiwiSaver for at least three years can withdraw most of their funds to purchase their first home.

First home buyers can withdraw their own contributions, their employer’s, and government contributions, and interest earned; however, they must leave $1000 in their account.

Federated Farmers dairy chair Richard McIntyre said it was “an incredibly hot topic” for farmers.

Federated Farmers want the Government to let young farmers access their KiwiSaver accounts to buy their first herd, home, farm or flock.

“Allowing young farmers to access their KiwiSaver to buy their first herd, home, farm or flock is the number one thing the Government could do to help our next generation of farmers.

“It would shave years of hard work and saving off their progression through the industry, and really turbocharge their farming careers.

“A lot of young urban people enter KiwiSaver because it’s a good way to build a deposit for their first house.

“They’re saving for a home early on - not for their retirement.

“We’re asking for young farmers to have the same opportunity.”

Northland MP Grant McCallum, who is a farmer, said he supported farmers being able to use their KiwiSaver to buy a farm, which includes a house.

“But there’s talk of people being able to use KiwiSaver to buy cows and herds - that’s problematic and something we need to look at carefully.

“That could be a slippery slope.

“If we let people buy cows, which is a good asset but not a home, what’s to stop a plumber buying a van and tools to start a plumbing business?

“We have to always remember what KiwiSaver was set up to do; it’s a retirement scheme, not a business start-up scheme.”

Hannah said he hoped the Government would seriously consider the move.

“It’s security.

“It also relates to being able to purchase a herd.

“If a lower sharemilker wants to progress, they need an opportunity like this to step on the ladder.

“Young people are our future and we have to invest in them.”

New Zealanders are encouraged to sign the petition www.kiwisaverforkiwifarmers.nz

Jenny Ling is a senior journalist at the Northern Advocate. She has a special interest in covering human interest stories, along with finance, roading, and animal welfare issues.