KiwiSaver and the Financial Markets Authority (FMA) have seen just minor annual adjustments in the no-thrills budget handed down by Finance Minister Grant Robertson last week.
The sixth Robertson annual special included a small bump upwards in the core FMA budget of about $67 million last year to just under $70 million in the 2023/24 version.
Overall, the FMA stands to receive $76 million in the new fiscal year with extra funds to cover a litigation fund (cut from $7 million last year to $5 million) and other capital spending.
While the 2023/24 allocation represents a dramatic slowdown in funding hikes compared to recent budgets, the regulator is expected to hit an annual spending limit of about $80 million over the next few years: most of the FMA budget is funded by industry levies.
According to government forecasts, the cost to the FMA of administering the Financial Markets (Conduct of Institutions) Amendment Act – or COFI – alone will rise from $5 million last year to almost $14 million by the 2025/26 period.
As well as COFI, the regulator is taking on several extra responsibilities including oversight of new climate-reporting obligations.
Similarly, Robertson left KiwiSaver largely untouched in the latest budget, bar a move to top-up contributions of those on paid parental leave.
The paid parental leave KiwiSaver contribution payment will add about $6 million to government spending in the 2023/24 period, increasing to $6.8 million by the 2026/27 year.
But the token sop to gender inequality issues aside, the third budget in the ‘wellbeing’ series has disappointed those looking for deeper reforms of the KiwiSaver system such as the Financial Services Council (FSC).
“We’d like to start the process for a long-term, substantive review of KiwiSaver as a priority,” FSC chief, Richard Klipin, said ahead of the budget last week.
Nonetheless, the local financial services sector is set to receive its mandated boost from KiwiSaver in the coming 12 months with the budget forecasting total flows of almost $11 billion – or a year-on-year increase of $1 billion.
While the government-supplied KiwiSaver member tax credit annual filip remains steady at just over $1 billion, total employee and employer contributions will jump from $8.7 billion last year to $9.7 billion during the 2023/24 year.
Employer and employee KiwiSaver contributions have been booked in the budget since 2019 to represent the payments that flow through the IRD.