Colin Ambler/cvnznews.com
The ACT Party has unveiled a major KiwiSaver policy ahead of the 2026 election, promising to remove tax on KiwiSaver investment earnings in a move it says could significantly increase retirement savings for many New Zealanders.
Announcing the policy at ACT’s campaign launch in Auckland, party leader David Seymour said earnings generated within KiwiSaver accounts should remain invested rather than being taxed each year. He argued that allowing investment returns to compound untaxed would help workers build larger retirement nest eggs over the course of their careers.
Under the proposal, the Government would stop providing annual KiwiSaver contributions to members who already receive employer contributions. ACT says the tax change would cost the Crown around $1 billion annually, although Seymour said details on how the policy would be funded would be released in the party’s Alternative Budget.
According to ACT’s modelling, a 25-year-old nurse earning $100,000 a year could accumulate more than $217,000 in additional KiwiSaver savings by retirement. A 40-year-old small business owner earning $120,000 could gain more than $69,000. The figures are based on assumptions around investment growth and individual contribution patterns.
Seymour said the proposal reflects ACT’s broader focus on productivity, investment and wealth creation.
“The biggest advantage of saving for retirement is time,” he said. “Compounding returns can turn relatively modest contributions into a substantial nest egg over decades.”
The policy sharply contrasts with proposals from Labour and National, both of which are advocating higher compulsory KiwiSaver contribution rates. ACT continues to oppose making KiwiSaver mandatory, arguing New Zealanders should retain flexibility over their savings choices.
Labour leader Chris Hipkins criticised the proposal, claiming it would disproportionately benefit wealthier Kiwis with larger retirement balances. He argued lower-income members who rely on the Government’s annual contribution would lose support while higher-income earners would receive the greatest tax benefit.
The KiwiSaver announcement formed a key part of ACT’s election campaign launch, where Seymour declared his priorities were to “lock Labour out” and “unlock New Zealand’s potential”. He argued New Zealand’s economic challenges stem from a productivity problem rather than simply a cost-of-living crisis, and said ACT would campaign on lower taxes, reduced regulation and greater incentives for private investment.
