Jenee Tibshraeny: NZ Herald Wellington business editor on Nicola Willis hinting towards KiwiSaver changes in Budget 2025

Finance Minister Nicola Willis has talked up how changes to KiwiSaver, due to be announced at the Budget, will boost members’ balances.

She's offered up some hints - but it's unlikely the Government will help by opening up its wallet.

NZ Herald Wellington business editor Jenee Tibshraeny speculates further ahead of Budget day.

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Episode Transcript

Speaker 1 (00:00):
Now Nichola Willis has been dropping the bread crumbs, hasn't
she when it comes to the budget, confirming today she
will be making some changes to Kiwi Savior, but wouldn't
say any more genative. Traine, as The Herald's Wellington Business editor, Hey,
you know, hey, Heather, So it sounded like the opposite
of what I was expecting. I was expecting that she
was going to do some sort of means testing and
actually take things away from us when it came to
Kei Wei Saver. But now it sounds like she's going

(00:21):
to beef it up. What's going on?

Speaker 2 (00:23):
Well, no, I think you're right. I think Nikola Willis
will means test that five hundred and twenty dollars contribution
that the government gives you if you contribute a certain
amount to your Keii Saver every year. That costs the
government about a billion dollars a year. It's a lot
of money. I wouldn't be surprised if the government means
tests that so that higher income earning people, perhaps people

(00:45):
earn more than say one hundred and eighty thousand dollars
a year, so that they don't get that payment. I
think she'll push on with that this is just my guess,
but I did wonder because she has said, look, we
want to boost people's kei wei saver balances, you know,
help them prepare for their retirements. So I thought, well, okay,
you want to boost you want to boost those So

(01:06):
how do you do that? There are a few ways
of doing that. Either we as members contribute more, our
employers contribute more, or the government contributes more. I asked
Simon Watts today, the Revenue Minister, whether the government would
consider cutting the tax that employers pay on the contributions

(01:26):
they make to our balances, and he said no, So
that that was you know, if the government chose to
cut that tax, that would have meant that here we say,
members would have more money in their balances, you know,
which would help us in their retirements. I had wondered
whether that would have been a way that they could

(01:47):
have boosted our balances, but the Revenue Minister said no.
So I'm playing we're playing the rule and rule out
game here. If they're not going to cut the tax
they're going to means tests this contribution that the government makes,
then how on earth are our balance is going to rise?
That only leaves us with some options, and that's basically

(02:08):
us putting more money in.

Speaker 1 (02:10):
What about the possibility of them means testing cutting off
the wealthiest people no government contribution, but then beefing up
the government contribution for the poorer people.

Speaker 2 (02:20):
Yeah. Look, that's totally an option, and I haven't you know,
I have played the rule in a rule I came
with the government, but I haven't gone to that length.
But that would make sense. You know, if you say
your lower income you get a larger government contribution, or
even you are self employed, which means you can't get
an employer's contribution contribution, so then maybe the government gives

(02:41):
you a larger contribution.

Speaker 1 (02:43):
Yeah, yeah, I mean it's clear the politics if you
take it, we take away with one hand, give with
the other. They're hardly going to compel people to put
more of their own money, and are they in a
cost of living crisis so we can rule that out.

Speaker 2 (02:53):
No, you know, I wouldn't rule that out. I think, well, well,
you know, we're guessing, but we desperately need to save
more for our retirements. In Australia, the contribution rate is
much higher. I wouldn't be surprised if the government said
over time we're going to up that yeah rate, the
minimum from three percent to four percent. Will it go

(03:14):
down well with people? I'm not too sure, but I
wouldn't I wouldn't rule it out.

Speaker 1 (03:18):
Yeah, over time, I think is the key thing. Jenna.
As always, Thank you so much, Jene to Bstrainey, the
Herald's Wellington Business editor. For more from Heather Duplessy Allen Drive,
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