Most New Zealanders don’t want the government to drill more withdrawal holes in KiwiSaver, a new Financial Services Council (FSC) survey has found.
The FSC poll of 1,000 people found the majority of respondents opposed proposals to enable members to tap their KiwiSaver accounts for wider purposes ranging from buying sheep to purchasing a second home to funding a holiday.
About two-thirds of those surveyed were not in favour of allowing KiwiSaver withdrawals to buy business assets while 60 per cent said the same for livestock purchases.
But support for drawing down on KiwiSaver accounts to acquire a business was a closer call with only 51 per cent against while a minority (45 per cent) were opposed to withdrawals for farm-buying reasons.
Using KiwiSaver to purchase a farm “is already possible under current settings”, the FSC report says.
However, about three-quarters of respondents said KiwiSaver withdrawals should not be approved to buy shares or a second home: more than 80 per cent rejected the idea of draining money from the retirement savings system to fund member holidays.
During the 2023 election campaign National floated the prospect of prising open KiwiSaver for a number of new reasons including rental bond payments, buying investment properties, funding business purchases and acquiring sheep or other livestock.
While the government has yet to deliver on any early withdrawal expansion plans, lobby groups continue to press for change.
Data compiled by Investment News NZ found KiwiSaver withdrawals for all reasons (including retirement, emigration etc) hit a high of almost $6 billion during the 12 months to March 31, representing close to half of member contributions for the period.
The FSC poll did find, though, the majority of respondents supported most of the May budget KiwiSaver changes such as extending the contributions regime the 16- to 17-year-old cohort (62 per cent) and increasing the baseline employee/employer contributions to 4 per cent each.
Nonetheless, two-thirds of those surveyed did not back the move to slash the member tax credit in half while just 47 per cent agreed that limiting the government contribution to those earning under $180,000 was a good idea.
Kirk Hope, FSC chief, said in a release that the “lack of broad support for any changes to early withdrawal settings show that New Zealanders value KiwiSaver as a retirement savings tool and want it protected and improved.”
“A long-term strategy would be the appropriate avenue to raise ideas and policy changes to improve KiwiSaver,” Hope said. “This would ensure KiwiSaver continues to serve its purpose while enabling investment into infrastructure, housing, and innovation – benefiting both savers and the economy.”
The FSC, due to host its annual conference in Auckland this week, has advocated for a strategic review of KiwiSaver, “drawing on industry expertise and international best practice”.