Labour unveils KiwiSaver policy – what's different to National's proposal

The Labour Party would make employer KiwiSaver contributions compulsory, even when employees reduce or pause their own contributions, and lift the rate to 6% by 2032, should it be elected in November.

It’s part of the political party’s KiwiSaver election policy, which also includes progressing the Government’s already-planned increase to the employee default rate to 4% as well as banning new total remuneration contracts that include KiwiSaver contributions in salaries.

Despite Labour leader Chris Hipkins criticising the Government last year for cutting the annual Government KiwiSaver contribution – and the party’s policy document today saying that was a reason Kiwis can’t trust National – there is no mention in Labour’s policy of restoring it to the amount it was before the coalition’s change.

Some aspects of Labour’s policy, announced in Wellington today, echo what National proposed in June with its own KiwiSaver policy – notably, providing a KiwiSaver contribution for parents on paid parental leave (though Labour’s would come a year later) and extending employer contributions to workers beyond the age of 65.

There are clear differences, however, with National’s policy pushing both employee and employer default rates to 6% by 2032 (Labour’s is just employers), making KiwiSaver compulsory for workers and automatically enrolling babies in KiwiSaver with a $1500 kickstart. There is no such policy for babies proposed by Labour today.

Hipkins on Sunday said KiwiSaver was one of Labour’s “proudest legacies”, but he wanted “to make it work better for people”.

Labour leader Chris Hipkins (right) and finance spokeswoman Barbara Edmonds, pictured in May, have released details of the party's KiwiSaver policy. Photo / Mark Mitchell

Labour would make employer contributions compulsory from July 2028 and lift them to 6% by 2032, “including when employees reduce or pause their own contributions”.

There is no information provided in the policy document on how quickly the rate would rise between July 2028 – when it is currently meant to be 4% – and 2032. Labour said it will be phased in “carefully, giving people and businesses certainty”.

However, the schedule could be similar to National’s plan for a 0.5% increase each year to 6%.

Labour said it would set the employee default at 4%, remove the minimum contribution rate and give people “more flexibility to adjust their contributions as circumstances change”.

The Government is already increasing the employee default rate to 4% by April 2028. There is no mention of any further increases by Labour in the party’s policy document.

This is different from National’s proposal, which is to make KiwiSaver compulsory for workers and continue increasing the employee default rate to 6% in 2032, so both employer and employee contributions give a combined 12%, matching Australia.

Labour’s other offerings include banning new total remuneration contracts, extending employer contributions to workers over 65 from July 2028, providing a KiwiSaver contribution for parents while they are on paid parental leave and a promise to “explore” more flexible options for self-employed New Zealanders.

The promise of contributions to parents on parental leave doesn’t have a date assigned to it. However, a glance at the party’s costings shows it won’t come into effect until 2028/29, which is a year later than National’s plan for it to be introduced from July next year.

Labour said that due to making employer contributions compulsory and increasing those to 6%, there will be more revenue from the Employer Superannuation Contribution Tax.

By 2030/31, it is estimating this to be $317.5 million, which Labour says will help offset the cost of the paid parental leave policy, as well as higher costs the Government needs to meet as an employer itself.

Labour has used the same costings as National for its parental leave policy – $35m in 2030/31.

It has not provided an estimate for how much more the Government may need to pay in employer contributions, saying this “will be managed through the Budget process”.

In its own policy, National estimated the impact of its proposals for the Crown as an employer would be $104.3m in 2030/31.

National chose not to include additional Employer Superannuation Contribution Tax, in its policy document, revenue which would offset some cost, arguing this was “highly sensitive” to other factors.

“To present the most conservative estimate on the net cost of this policy, we have opted not to offset the fiscal impact by any additional revenue from higher Employer Superannuation Contribution Tax,” National said.

Jamie Ensor is the NZ Herald’s chief political reporter, based in the press gallery at Parliament. He was previously a TV reporter and digital producer in the Newshub press gallery office. He was a finalist in 2025 for Political Journalist of the Year at the Voyager Media Awards.