ACT would scrap tax on KiwiSaver earnings and drop the Government top-up. Here's how the three main KiwiSaver plans compare

ACT would stop taxing the money KiwiSaver accounts earn on their investments. To help pay for it, the party would take the annual Government contribution away from most members.

Leader David Seymour announced the policy on Sunday, 4 October, at ACT's campaign launch in Auckland. RNZ reported him saying government policies had attacked wealth creation for decades, and that other parties would "destroy wealth" with their answers to the cost-of-living crisis.

According to the NZ Herald, the tax change would cover KiwiSaver and other superannuation accounts. Members who get employer contributions would lose the Government contribution, which is worth up to $260.72 a year.

"We don't support compulsion, but we want to offer a sweetener to KiwiSavers," Seymour said, as reported by the Herald. ACT's policy document says: "The Government currently taxes money growing inside KiwiSaver, then gives some savers a small annual Government Contribution back."

ACT's own examples are large. It says a 20-year-old builder earning $60,000 would have an extra $209,486 by 65. A 50-year-old office manager on $80,000 would have an extra $20,878. Both figures assume the average balance for that age, and both rely on ACT's own assumptions about returns and contributions. The Herald reported that the policy document gives no figure for the average gain per account. The paper also said people with larger balances are likely to gain the most.

That means the deal is best for someone with a large balance and decades of investing ahead. Someone with a small balance could lose up to $260.72 a year in exchange for a tax saving that depends on how much their fund earns.

ACT says the KiwiSaver change would cut government revenue by just under $4.1b over four years. Removing tax from other super accounts would cost about $900m more. Dropping the Government contribution saves about $2.6b, so the net cost is about $2.4b. ACT says it will show how it would pay for this in its alternative Budget.

National's plan, announced in June, does the opposite and makes saving compulsory. The Herald reported that from 1 July 2028, everyone in work would have to contribute to KiwiSaver or an equivalent scheme. By 2032, employers and employees would each pay 6%. Members could pause contributions only if they met the existing hardship test used for early withdrawals. Members of other schemes, such as the Police Super Scheme, would be exempt.

National would also enrol every baby born in New Zealand at birth, with a $1500 Baby Boost. It would require employers to keep contributing for staff over 65. The Herald put the cost of the four main changes at a little over $1.1b over four years.

Seymour has called National's compulsion "disruptive" for people who would rather use the money to build a business or pay down a mortgage.

Labour puts the obligation on employers instead. The Herald reported that employer contributions would become compulsory from July 2028. They would rise by 0.5% a year to reach 6% by 2032, and employers would have to pay even when workers cut or pause their own contributions. The default rate for employees would be 4%, with no minimum, so a worker could put in nothing. The Government is already lifting the default rate to 4% by April 2028.

Labour leader Chris Hipkins said raising workers' contributions to 6% wasn't responsible "in the midst of a cost of living crisis". According to RNZ, Labour would also ban new total remuneration contracts, which fold the employer contribution into salary. It would extend employer contributions to workers over 65.

Labour would not restore the Government contribution to its level before the coalition cut it. "We're not in a financial position to do that right at the moment," Hipkins said, as reported by the Herald.

Simplicity founder Sam Stubbs told RNZ that moving to compulsion and ending total remuneration contracts was good. But he said "the amount that they want Kiwis to save for their future is not going to be nearly enough."

An employee on a regular wage: under ACT, your contributions stay voluntary and your investment earnings are tax-free, but you lose up to $260.72 a year from the Government. Under National, your own contributions would rise to 6% of your pay by 2032, and your employer would match them. Under Labour, your employer's contribution would rise to 6%, and you could choose to pay nothing yourself.

A parent on paid parental leave: National would pay a Government contribution into the parent's KiwiSaver, even if the parent isn't contributing. It would be paid at the default rate on their parental leave payments, starting in July next year. Labour's costings show its version would start in 2028/29, a year later. The Herald's report of ACT's policy does not mention parental leave.

A worker over 65: National and Labour would both make employers keep paying. ACT's announcement, as reported, doesn't cover this group.

Someone who has paused their savings: RNZ reported that Hipkins cited 83,400 people on a savings suspension, and more than a million working-age members contributing nothing at all. Under National, people on a suspension would have to start paying in again unless they met the hardship test. Under Labour, they could stay paused, but their employer would still have to pay. ACT would not force anyone to contribute.

None of these changes happens unless the party behind it gets into government after the November election. National's and Labour's main changes would not start until July 2028.