The National Party has promised to allow people under 30 to use KiwiSaver money to make bond payments on tenancy agreements, if elected in October.
Chris Bishop, National’s housing spokesperson, said it was an idea pitched by the party’s youth wing as a way to make it easier for students to get into flats.
Renters would be able to transfer money from their Kiwisaver account to Tenancy Services and back again when the tenancy ends.
“It sits alongside National's other common sense tenancy law changes to make it easier for renters to get ahead," he said.
But financial capability experts have criticised the policy, warning it detracts from the key purpose of KiwiSaver — which is to build wealth to use in retirement.
Susan St John, an honorary associate professor at Auckland University’s business school, said the policy was “stop-gap, short-termism”.
“We don't want to see the balances of KiwiSaver used for different purposes [other than retirement],” she said.
While some people did desperately need money for housing, prompting them to raid their retirement savings was not a proper policy fix.
People in material hardship already had a mechanism to access Kiwisaver funds, and those who aren’t shouldn’t use retirement savings for a bond.
Bishop said the policy would only apply to people aged under 30, and could only be used a total of five times.
“This reflects the fact that we want young people joining KiwiSaver early and staying in for the long haul,” he said in a statement.
The bond payment for a room in a shared flat might be about $1,000 in major cities. The average KiwiSaver balance for a person aged 18-25 was approximately $7,500 in 2022, and $15,000 for ages 25-30.
‘Absolute last resort’
Ruth Smithers, chief executive of financial mentoring service FinCap, said people who were unable to pull together a bond may be able to get support through WINZ.
“FinCap generally sees accessing KiwiSaver early as being an absolute last resort. We encourage anyone considering early access of KiwiSaver to contact a financial mentor and see if there are other options,” she said.
FinCap is an NGO that receives funding from the Ministry of Social Development to run the MoneyTalks helpline.
David Boyle, head of sales and marketing at Mint Asset Management, said he was concerned that politicians saw Kiwisaver as a “little pot of gold” that could be used to tackle specific problems.
He said it was good that the money moved directly from the Kiwisaver account to Tenancy Services, as that significantly increased the likelihood it would not be lost.
But still, young people’s retirement savings may end up being spent repairing a house they don’t even own.
Boyle, who previously worked for the Financial Capability Commission, said it was important to build up a cash savings fund before investing into Kiwisaver, which is for long-term savings.
“The best thing about Kiwisaver is that it is reasonably simplistic and if you continue to overcomplicate it, it dilutes its original proposition,” he said.
“If you keep tweaking around the edges, it becomes something that it wasn't designed to be in the first place — which then creates other challenges down the road”.
Kiwisaver providers already spend significant amounts of money managing the material hardship exemption, and adding more complications will add to fees across the scheme.
If National were elected, it would amend the KiwiSaver Act to add the new policy and would also do any work required to make back-end operations between Tenancy Services and KiwiSaver providers as easy as possible.
159 Comments
What a ridiculous marginal policy that wastes retirement savings of the young to encourage them to leave home and rent for exorbitant rates (to save the investor class)
No one should vote for the Nats when they are this incompetent at policy formation after six years out of office.
The real rot for KiwiSaver began in 2014 when savers became allowed to withdraw the state subsidy, the so-called 'tax-credit', to finance a deposit on a first home.
https://www.taxtechnical.ird.govt.nz/en/new-legislation/act-articles/ta…
State subsidy of KiwiSaver should cease. KiwiSaver should be a managed-fund private investment involving only the saver and his or her employer.
And all managed funds ought to be taxed at the saver's ordinary marginal rate.
Lets adopt the Australian superannuation system. Compulsory contributions are not taxed on entry, concessional tax rates applied on earnings (15%), and tax free on withdrawals after 60. The Kiwisaver system is nothing more than a normal savings account - no wonder the politicians treat it as such.
And you can use a superannuation fund to buy residential investment property, with a non-recourse mortgage.
Yes, if you thought that New Zealanders were property obsessed, you havent lived in Australia! NACT know that their voting base is currently packing their bags for warmer and more property friendly climes. Unfortunately they all happen to be the same 50% of voters that pay all the income tax.
As a net tax payer, I don't begrudge those who are non-net tax payers. They still pay income tax, but for whatever reason their rent is so high that us productive taxpayers must provide them with tax subsidies to make the numbers work for other people's lazy investments.
Also the argument around "net tax payers" has zero nuance to it and people keep parroting it without looking into where it actually came from.
Bringing up "50% of New Zealander's aren't net taxpayers" but forgetting that part of those 50% percent are people on superannuation. It's talked about as if 50 percent of workers are contributing nothing but considering there are 842,000 over 65's who will be the ones collecting the vast majority of those "transfers".
Then another big chunk would be WFF, and accommodation supplement which is basically a landlord subsidy, then the classic jobseeker which is $3b out of a $50b budget. There aren't as many working-age people just sitting around doing nothing as it seems to be framed from looking at the data.
The info for that is all in the below link showing what the transfers actually are and what groups are getting what. That data is also a bit out of date as it's from 2018. Considering the tax brackets haven't been adjusted for inflation any time recently we may more net tax payers than we did previously.
https://taxworkinggroup.govt.nz/sites/default/files/2018-09/twg-bg-distributional-analysis.pdf
Another policy to support landlords and the property market. Allows rents to increase without the increased bonds being much of an issue. This feels a bit like the first home withdrawal, but for renters. But making these sorts of changes to kiwisaver really erodes kiwisavers intentions and means less savings in retirement
But don't forget that this is somewhat of a distraction , beucause for most under 50, the Kiwisaver withdrawal age will increase to 67 under national. This is becuase they are increasing the Super age for most under 50, and Kiwisaver withdrawal age is tied to the super elibility age. They need to decouple it so people have a choice to retire early at 65 and use their kiwisaver. Otherwise people have 2 less years to use the money
It’s their money. If they want to temporarily forgo fairly minimal investment returns in order to avoid being financially crippled for weeks, then let them. It’s probably just going to come from student living costs or a short term loan anyway.
Are you suggesting everyone just live with their parents until they have a house deposit? (only loser Aucklanders do this)
"What a ridiculous marginal policy that wastes retirement savings of the young to encourage them to leave home and rent for exorbitant rates"
Two questions to ponder:
1) does this policy help the long term financial futures and retirement of the younger voters?
2) does this policy help to attract votes of the younger voters in an upcoming popularity contest?
You are describing National and ACT there. Check out ACT's policy to rent our hospitals from foreign landlords.
This from their website:
"Private provision and leaseback of public hospitals
ACT will:
- Allow lease-back and build arrangements with large, reputable global infrastructure investment groups for the refurbishment of existing public healthcare infrastructure and the construction of new facilities."
Agreed. I don't like the idea of renting out our hospitals, but as you say unless we can find the $500m or so each to replace our aging hospitals then what can we do?
Coincidentally, our biggest social welfare bill has increased by 1 hospital per year since 2004 for which today it's now 36 hospitals per year and those recipients are the most likely to be needing said hospitals. It would be a cruel irony if they complained about the quality of health services.
If we can't afford to build our own hospitals for our own resident taxpayers (and the odd sick or injured visitor), then we definitely have bigger problems.
Then again, we built distribution networks so I guess that's the same right?
Someone else can make a margin of the rental.
Pretty disgusting move. "We know housing is f$%%ed, we helped to destroy it. So what we will do is make it easier for the people who are worst affected by our collective incompetence, to be more f%#&ed down the road".
Wouldn't expect anything less from the tobacco salesman.
This National Party are only there for one thing. That is to enrich the wealthy speculative investing classes. Their support for industry and other employers is very secondary. At the end of the day, it is the productive economy that has to pay for all this speculative asset growth and the social consequences. It really is time that a few captains of industry spoke out against this asset speculation mania.
Their accusations of conflicts of interest in respect of the Labor MPs, while justified, pale into insignificance when compared with how they are going to outrageously enrich themselves.
Their first priorities are :
Do away with the top tax rate changes to put more money in the pockets of the super wealthy
Restore the property investment interest tax deductibility to put more money in the pockets of property investors
Flood the country with immigrants to make labor cheap and boost property values
Remove protection for house tenants to put more money in the pockets of investors.
All their other statements are just window dressing to get them into power, pretty shallow and unlikely to come to anything.
The best thing that young kiwis can do is leave the country. In the unlikely event that labor get back in,they are not much better.
If you can be bothered voting, vote TOP
What is going on? This election campaign is fast becoming 'dumb and dumber'. Where are the policies that actually address the challenges we face? Whether you agree with the Greens or not, at least they have a costed policy that would dramatically reduce child poverty rates. When are the main parties going to put anything real on the table?
Simple, there's not the money in the coffers to play with so they are frantically trying to get people to use their own money for political votes. People keep saying Nat/Act will win the election, I'd say Act will get more of the National voters after the boys in blue come out with this rubbish.
Perhaps the Greens could also explain how its gping to be mathematically possible to drastically reduce child poverty rates when the methodology is "Percentage of children living in households with less than 50% median equivalised disposable household income before housing costs are deducted."
The poor are always with us - in a normal distribution curve. Unless children are going to be limited to the half of households who are net taxpayers.
Finland figures for the relative income child poverty measure is below 5%. It is quite possible - you just have to be prepared to use the tax system to really reduce inequalities. In 1950, the average working kiwi family man paid literally nothing in income tax for example. Poverty is predominantly a political choice.
My parents & grandparents who were average working kiwi families in 1950 say you're wrong - any evidence for your assertion ?
"...use the tax system to really reduce inequalities." In effect this is the minority of net taxpayers increasing the wealth of people with children to the point where their incomes are equivalent to net taxpayers. Why should others subsidise their personal choices when the worlds population is now 3x that of 1945.
Come on, you know I don't make stuff up: https://teara.govt.nz/en/taxes/page-4
I've always though that since you let people take a % out for a first house, why not let other people take a % out to pay off their mortgage if they need too (has to go direct to mortgage lender). Both form a part of the retirement plan for a person, can't see why you let one demographic take it out and not another.
Beucase they are the same people, but double dipping. First home buyers are also mortgage holders. IMO kiwisaver shold never have been allowed to be used for a first home. All it did was push up house prices even more as people could afford to pay more, as they didn't have to save manually to get their full deposit. I used kiwisaver myself for a first home, only because it allowed me to and it benefited me at the time to do so. But not using it wouldn't have prevented me buying the first home. But I will have less savings in my kiwisaver at retirement as a result.
Why not allow people to take out kiwisavers for health reason, such as an operation or essential drugs. Or IVF if they can't have children. It seems crazy that property in NZ gets treated so favourably above everything else in NZ
He reflects Nationals values transparently. That is his problem, he is not smart enough to put on the act required to con voters to put National into power and screw the general public. Key was equally despicable, he just had the smooth veneer to pull it off.
And if that is not enough to put you off, he is not a very nice person.
"you are just a trolley dolly"
"you are just bottom feeders"
he is a very devout MAGA cap wearing christian
He has lots of rental properties
"here is my publicity posting from Te Puke" (while actually in Hawaii)
He needed a Mercedes to drive him across the road to parliament!!!!
Very hard to find any redeeming features.
If they wanted to replace him, they would struggle to do better. They have all been well selected to reflect Nationals values and cut from the same cloth.
Atrocious policy. Yet another short sighted and blatant attempt to subsidize the real estate sector. If this is the quality of their published policy then god help us what they will introduce after the election should they win come October. Little wonder the minor parties are doing so well in the polls.
Gimmiky -- but if it has to be returned -- not that tragic! more to the ;point -- how about opening the scheme up for divorcing couples needing to buy a second home! Trying to buy to avoid having to sell the family home -- and cant access it -- and the property i tried to buy - -similar issue that one half wants to sell the other needs to keep it and stay -- might make sense to look at all the scheme for ts functionality and not just a tiny part of it
It doesn't have to be returned if the property is damaged. It would be interesting to see what percentage of people under 30 get their full bond back each time. Plus it is removing ~$1000 from your $7500 savings for up to a decade if you start renting in your early 20s. It is earning no returns in that time and is losing ground to inflation
using kiwisaver as bond money for rentals is a very bad idea. Kiwisaver is a way to save, and it's especially important for young starters to learn habit of saving.
I sympathize people who is in bad financial situation. I'd rather MSD give 6 months interest free loan towards bond payments. of course it'll be loan, not give away, it would work like a BNPL.
Yesterday it was potholes, today it's rental bonds. They really are addressing the pressing issues.
Bet the intent is really to get rid of this option;
https://www.workandincome.govt.nz/housing/move-house/bond.html
I personally believe Potholes are a pressing issue. We are spending (Wasting) Billions on Roads every year. Yet our roads are failing everywhere. There are temporary fixes, workarounds, not to mention shoddy design, poor construction, and minimal maintenance.
The roads here in Taranaki are literally disintegrating. Another 10 years, and the airport (Assuming the runway isn't as shoddy) will be the only method in or out of New Plymouth.
NZ has proven incompetent at any sort of public transport - particularly rail. So it won't matter how many EVs we have or buses we get, we still need roads.
Upped the max weight of trucks a few years back. That will be coming home to roost too.
It's harder amd more expensive to do road works as traffic volumes and health and safety requirements increase so getting less value out of same budgets.
Maybe a little search to see if the companies doing the work are declaring record profits too.... take a small bet they are...
Exactly this, National upped the limit to 53 tonnes from 44, extended lengths etc etc, all in the name of "getting the country moving" now it comes home to roost that it really destroys the roads we build (I'd imagine not helped by the extreme weather we've had of late) and they make a song and dance out of paying for patching it all up again. Freight should be on the railways, weight limit on roads reduced back down to help stop this destruction, maybe with road charges for freight companies that better reflect their actual, physical, toll on the roading system.
I fail to see how repeating archaic answers to try to re-solve old problems while taking from the future in the name of profit will help us navigate to a better place. Some adult, joined-up thinking is needed across the globe and NZ should be a great place to show the way. Enabling polluters, extractors and extorters to carry on pursuing the same course of action that has delivered us here is not exactly something to be proud of.
As Richard Prior pointed out, 'None of the Above' should be an option at the bottom of the ballot paper.
The reason why the roads are disintegrating is because it is super expensive to maintain them and only getting more expensive to do so and people want a car based transport system but do not want to pay for it. Hence all the hidden subsidies to cars. The issue is these hidden subsidies are also now running out of options.
Really we should acknowledge the Elephant in the room. Kiwisaver is likely a problem for more people, than it is, a solution.
For many (slowly tipping towards most) saving for tomorrow is simply a luxury they cannot afford.
The concept of "retirement" is relatively modern. WHen I run the maths, retirement in the current state looks unlikely.
So if I am going to work until I die anyway, I might as well have that 3% now.
And even then, the Government claims to have fixed 54,544 potholes in 2022. 150 per day.
“To be clear, Waka Kotahi is fixing a record number of potholes across the state highway network. It repaired 54,544 potholes in calendar 2022, compared with 39,652 in 2018.
https://www.beehive.govt.nz/release/national-finally-owns-pothole-probl…
They fix them, and two weeks later its a pothole again. Waka Kotahi stands for "Government Make Work Scheme". Do it properly the first time. Start by buying some decent bitumen instead of the cheapest rubbish they can find because they don't to admit that allowing Marsden Point to close was a colossal and expensive mistake. See also jet fuel. And CO2.
Who buys the bitumen? Is it Waka Kotahi, or Fulton Hogan/Higgens/Downer etc?
In September last year they published a new "Asphalt Binders" spec, because presumably one never existed. I imagine it may take some time for this to filter through? It appears to be fairly comprehensive, but I'm not an expert in roading. Since you're knowledgeable, maybe you can give us a run down on what's wrong with this spec.
Why can't we admit that our property market is unaffordable and killing the futures of younger generations?
Stop trying to work around the issue at all costs and address it from the top down. Tax property like all other assets and apply borrowing rates like you would for any other asset class.
What a fu**ing joke of a country this is.
It’s like somebody in National woke up and said “what one policy could we come up with to most piss off the Interest.co.nz comment section”
I disagree with the policy as effectively it’s a way of subsidising overpriced rentals (as having bond money is a blocker) but at the same time if I cast my mind back to my renting days I can think of at least a couple of scenarios in which this would have been very helpful - at an individual level of course and not a wider societal level.
for example when flat hunting at uni there was always one flat mate who could never come up with bond money - would be useful in that circumstance.
With respect to landlords withholding the bond I never had that happen to me once in about 7 different tenancies over a decade BUT I know some take the piss … at the very least you’d need to make it all but impossible for the landlord to withhold the bond.
Between Labour deciding that being tough on youth crime does work (when it’s the right Chris announcing the policy), the Greens basically wanting to rip up the playbook on private property in their quest for justice (unless you actually believe the “non binding” bit, now buy my bridge) and National coming in to bat yet again for the landlords it’s a great day to have little faith in the quality of NZ politicians.
Sparrow - try thinking about what the money will buy, not how much proxy they will have. If there's nothing on the shelves, the 'money' is worth squat.
And that is what is happening; ever-less planet remaining (it's all we make stuff out of0, ever less fossil energy remaining, ever-more pollutive impacts - but coumpound interest will work its magic for them?
Spare me.
Or someone needs their impacted wisdom teeth removing and need $4000. Or need IVF as a last chance to have children. IMO these examples are a far more valid reason for an early kiwisaver withdrawal , than paying for a bond for a rental. Especially as you can already get a grant for a bond at https://www.workandincome.govt.nz/housing/move-house/bond.html
Makes sense to me. I dont get the opposition to this.
Young people only, so plenty of time to continue to save for retirement.
Only a bond so can only be a modest amount of money.
Many young people have a hard job seeing the point of saving for something so far in the future (in their eyes)
Many lack the available funds for a bond.
Others seem to be saying the taxpayer should pay.
Instead, how about you encourage young people to take responsibility for paying THEIR OWN WAY IN LIFE.
Let’s say $2000 for bond, $1000 government contribution, ~$500 employer contribution, ~$500 personal contribution. This policy is literally the opposite of encouraging young people to pay their own way. Not only that, but because they never “held” the money, they don’t necessarily see the value of it disappearing at the end of their tenancy. Out of sight out of mind, socialism feeding privatisation.
Not to mention the opportunity cost of that $2000x5 if they never see it again.
I guess you've never rented, looked after the place, but still had to fight with the property manager to receive all your bond money back on pre-existing damages.
One place I rented, they tried to sting me $100 or so to fix the broken heated towel rail bracket. Was noted as damaged at the start of tenancy. But what's even funnier, they used the old photos when relisting showing the broken heated towel rail. They replaced the flooring in the bathroom 3 months in after a section completely rotted away, yet the new listing photo's showed the old tiles.
You mean that the age of Super eligibility will increase when national get in, as that is one of their policies. They are recycling Englishs policy from 6 years ago, that most people under 50 won't qualify for Super and Kiwisaver eligibility until they are 67. The only difference is that they have 6 less years to plan for it. They are essentially reversing Labours reversal of Nationals policy.
Because it does absolutely nothing to improve someones wealth for retirement, unlike the first home grant.
If people lack savings for a bond, how are they going to pay the rent, or for other costs.
There is already a bond grant at https://www.workandincome.govt.nz/housing/move-house/bond.html . So maybe they are planning to do away with that?
I wonder if labours policy will be to get rid of this policy if they lose and then get back in again, just as National did with the super age. I would doubt it. If labour can't manage to gain political points from this, they don't have much of a chance in winning the election. At the moment national can suggest all sorts of rubbishy policies like this and still get in.
If they don't have $1000 to pay the bond in the first place, how will they afford to pay the rent or cover a landlord's insurance excess in the event of damage? Its likely most of them will end up surrendering the bond due to non payment of rent and repairs at the end of the tenancy.
On the other hand, it is consistent with the Nats aim to stop wasteful Govt spending. By allowing people to access and spend their own money they are not increasing Govt debt to finance people's wasteful habits. Nor are they raiding the hospital and school funds to pay for it. If it had been the Greens or Labour policy, it would have been "free bonds for everyone, Govt pays" like the free Uni fees, and free "warm and dry" houses, and free EV cars, and free fridges from WINZ ....
Perhaps all the Boomers and Gen Xers have told Luxon they do not want their kids living at home with them until they are 40 and please do something to get them out of the house!
https://www.rnz.co.nz/news/national/467240/evs-will-still-be-out-of-rea…
Low-income families who scrap their old car will get funding to buy a low-emitting vehicle in a $569 million scheme, one of the big-ticket items in the government's first Emissions Reductions Plan.
The money will not just be for electric vehicles - it could also help buy an e-bike or could be in the form of public transport vouchers.
so far national has announced
using kiwisaver for bond, removing the bright line from ten years, restore interest deductibility on rental properties, they have gone quiet on reversing allowing overseas people to buy houses.
good thing there is no one in charge of policy direction that has say 5 rental houses that would benefit by thousands from these policy changes as that would be a very clear conflict of interest.
it is not surprizing how our media don't climb all over this like they did owing a few shares would have them salivating as it's all about rental property investment and that is seen in NZ as the only type of investment that is not a problem when in reality high house prices and rental costs cause so much of our society's problems
This sounds like a great idea. But National need to think long term. What happens when someone's state subsidised retirement savings are not even enough to pay the bond for a rental? Maybe National should propose some sort of system whereby a person can pledge all their future income to their 'landlord' in exchange for being provided a place to live and enough food to feed their family. We could call the system 'feudalism'. Go on Chris, be brave!
KiwiSaver is not a savings account, it is an investment which one doesn’t really have any real control of.
If you are young and saving up to buy a house then do it otherwise think twice as KiwiSaver more likely not going to exist in 30 years time….
Even if you managed to hang on to retirement your “savings” will become insignificant after inflation. Just imagine what $1 million can buy you in 30 years time and that’s if you have $1m in your KiwiSaver by then.
The system is designed to use your money to “support the market”, it is an idea.
This sux, and why specifically to pay wealthy landlords a bond, not for critical healthcare or search and rescue… who are they listening to that lobbied for this, do they have gold dust in their eyes? A mistake amongst many that will keep them down to under 30% if this kind of misjudgement continues. We need better policy.
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