NZ First KiwiSaver policy could cost Government $12b-$28b

NZ First leader Winston Peters says his party would campaign on KiwiSaver contributions becoming compulsory for employees and employers. Photo / Mark Mitchell

New Zealand First’s policy of mandatory KiwiSaver contributions paired with tax cuts could cost the Government $12.3 billion to $28.3b a year.

In the past year, the Government spent about $30b on healthcare, a figure that includes ACC spending.

However, NZ First disputes the figures.

Over the weekend, NZ First leader Winston Peters said his party would campaign on KiwiSaver contributions becoming compulsory for employees and employers and rising to 8% and later 10%.

“KiwiSavers and employers will receive tax cuts to cover the increases,” Peters said.

Peters did not have costings for the policy when asked at the weekend.

Asked about the numbers on Monday, Peters said he had “seen that speculation already”.

“How can they work that out, when they don’t know the numbers in or out at this point of time is beyond me,” Peters said.

“Look at the cost of us not doing it.”

NZ First leader Winston Peters during his speech to members and supporters in the Palmerston North Convention Centre, 07 September, 2025. NZ Herald photograph by Mark Mitchell

Using data from the Financial Markets Authority’s KiwiSaver annual report and IRD tax data, it is possible to calculate that the cost to the Crown would be about $12.3b to $28.3b, depending on the settings.

KiwiSaver 2024 contributions were about 5.9% of all wages reported to the IRD. Mapped onto the economy in 2026, as forecast by Treasury, would see $11.9b contributed to KiwiSaver funds.

Increased to a contribution of 8% for the employee and 4% for the employer, this would result in about $12.3b in additional contributions.

If NZ First made good on its promise to offset these contributions in tax cuts, this would require a tax reduction of $12.3b annually - a package of tax cuts about three times as large as the current Government delivered in 2024.

If the policy were to increase to a compulsory 10% employee and employer contribution, balanced by a tax cut, this would result in a reduction in revenue of $28.3b — about the same amount spent on the health system annually.

There would be other impacts - some positive, some negative. Some employers would likely reduce headcount or move staff from being employees to contractors to avoid paying the additional KiwiSaver contributions.

However, tax paid by KiwiSaver providers through PIE returns would increase.

Prime Minister Christopher Luxon would not be drawn into a debate on the numbers on Monday.

“Each party is going to have a superannuation policy as it goes into the election campaign, that is the time for us to have a look at it,” Luxon said.