Andrew Bayly says people with significant KiwiSaver balances might want to invest in specialist areas while still keeping some of their money in passive funds. Photo: RNZ / Angus Dreaver
People with large KiwiSaver balances should be able to invest in specialist funds such as those targeted at climate change or horticulture, National says.
The National Party wants to let people split their KiwiSaver investments across multiple providers, saying it would drive innovation and competition and push down fees.
The party's leader Christopher Luxon made the pledge in Auckland yesterday.
He also promised to pull back on lender regulation which would mean rolling back measures brought in by Labour including the Credit Contracts and Consumer Finance Act (CCCFA) and the Conduct of Financial Institutions Act (CoFI).
The government introduced the CCCFA law in 2021, but it moved to ease the rules last year after complaints from banks and borrowers alike they were too restrictive.
National said it would still maintain tight restrictions on predatory pay day lenders.
Consumer affairs spokesperson Andrew Bayly told Morning Report the KiwiSaver split was recommended in a report produced by a group that came together to look at ways to improve the capital market.
Now that there was $100 billion invested in KiwiSaver it was time to look at giving savers a choice.
He made it clear the party did not want everyone splitting up their KiwiSaver, it was intended for those who had accrued large sums.
"Some people now have quite significant KiwiSaver balances and what we're saying is, you should be able to have a choice: whether you want to have some in a passive fund or whether you want to put some into some other kind of fund."
While some existing funds already offer the chance to split savings, flexibility needed to be more widely applied.
It would open up the opportunity to have some money as passive savings, and then invest in specialist areas such as horticulture, climate-related investments, housing or those funds investing directly in New Zealand businesses, Bayly said.
On why National supported the removal of two pieces of legislation that encourage ethical behaviour and safeguard people from unfair pressure, Bayly said there was already "a plethora" of laws and rules protecting borrowers and investors, including banking and insurance codes.
He used the example of one business that had five employees working full-time on applying the CoFI law to its firm, yet a representative was unable to explain any benefits of the new law.
CoFI was about documenting a whole lot of detail when the focus should be on the high risk lenders in the market, Bayly said.
Backing from KiwiSaver provider CEO
Sam Stubbs Photo:
KiwiSaver provider Simplicity chief executive Sam Stubbs said more choice for investors was positive and hopefully it would result in more competition.
"I can certainly see from our perspective that we would probably offer more choice in things like funds that would specialise in start-up companies, or build-to-rent housing, issues like that. I can see that happening.
"The issue will be though, will that choice bring complexity and will that complexity lead to higher fees."
Stubbs said there was already a lot of diversified funds with more than 130 KiwiSaver funds on offer.
The government of the day would need to work closely with Inland Revenue on any changes because the beauty of KiwiSaver was its simplicity, he said.
On National's plans to repeal the two consumer protection laws, he was sympathetic to the idea that the rules that already existed before the laws were introduced could have been strengthened to provide the same protections.
Stubbs said the regulators would need to be well equipped and willing to enforce the laws.
