Act leader David Seymour floats giving Year 11 students $500 each to learn to invest

Act leader and Deputy Prime Minister David Seymour floated the idea during a speech in Christchurch. Photo / Mark Mitchell

Act Party leader David Seymour is floating the idea of giving every Year 11 student $500 to learn to invest, assessing them on their progress and potentially letting them pocket any earnings.

While Seymour isn’t confirming it as election policy “yet”, he says he wants the public’s feedback on the idea as he searches for measures to improve financial literacy.

Seymour made the suggestion during a speech at an ANZ-sponsored business event in Christchurch.

His pitch involved giving the roughly 60,000 Year 11 (equivalent to the old fifth form) students across the country $500 in a controlled investment account with a “structured pathway into real investing”, possibly supported by investment platforms Sharesies or BlackBull.

“In Term 1, they choose a term deposit. A safe investment, but one that introduces the basic idea of storing capital so it can be used by someone else to produce, earning a return for the investor,” Seymour said.

“In Term 2, they invest in a managed fund. This introduces the idea of risk. In Term 3, they can invest in New Zealand equities. This introduces the idea of companies. In Term 4, they are able to invest in assets from around the world. Exchange rates suddenly matter.”

Seymour indicated there would be regular tests of students’ knowledge, which would establish whether they could progress to more risky investments.

He suggested any returns could be placed in a student’s KiwiSaver, a credit on their student loan or be given to them in cash.

He proposed the initiative, which would cost about $30 million, could be funded from the roughly $600m KiwiSaver annual subsidy.

Seymour acknowledged some may be surprised to see Act supporting a policy giving teenagers money, but he argued the benefits would be realised.

“It’s also not a handout, but an investment in young Kiwis to grow their own wealth.

“In the long run, it will get our country out of its financial funk more powerfully than any policy of remotely comparable cost.”

Seymour said the idea wasn’t Act policy and he was hoping for feedback on how it could be fine-tuned.

Adam Pearse is the Deputy Political Editor and part of the NZ Herald’s Press Gallery team based at Parliament in Wellington. He has worked for NZME since 2018, reporting for the Northern Advocate in Whangārei and the Herald in Auckland.