18 Feb 2024
National will provide KiwiSavers with more freedom and choice over where they invest, as well as cutting financial red tape for borrowers and lenders that is not fit for purpose, National’s Commerce and Consumer Affairs spokesperson Andrew Bayly says.
National’s plan to boost domestic investment will:
- Allow KiwiSavers to invest in more than one provider, driving innovation, boosting competition and putting downward pressure on fees
- Cut financial red tape that is stifling investment, including the failed CCCFA
“The money in every KiwiSaver account belongs to the person who saved it – but the current rules mean Kiwis have to have all their KiwiSaver savings with just one provider.
“That restriction is limiting investment choices, and potential returns, for savers.
“As the sector grows and matures, some KiwiSaver providers are looking to diversify their investments into different classes of assets – such as start-ups and Build-to-Rent investments. However, under the current settings, savers who want to access these new investments are forced to shift all their savings to that provider – limiting choice and competition.
“KiwiSaver plays an increasingly important role in the New Zealand investment environment, as generations of savers continue to accumulate assets. But restrictions on savers and fund managers are pushing up fees and limiting investment opportunities.
“Increasing flexibility and choice for KiwiSavers to allocate their savings across multiple providers will encourage innovation, and higher potential returns over their lifetime.
“That’s why National will give KiwiSavers the flexibility to split their savings across multiple providers to provide more choice, improve investment options and competition. Improving competition is the best way to put downward pressure on KiwiSaver fees.
“National will also roll back some of the financial red tape introduced by the Labour Government which has proven unworkable.
“This includes the Credit Contracts and Consumer Finance Act (CCCFA), which was supposed to go after predatory pay day lenders, but instead has stifled access to credit and resulted in borrowers being subjected to highly intrusive questioning from their bank, with every purchase, membership, or subscription up for scrutiny.
“Someone looking to start a business by extending their mortgage shouldn’t have to tell their bank which brand of cat food they buy or justify their Netflix subscription.
“National will maintain tight restrictions on predatory lenders, but significantly reduce the scope of Labour’s other changes to the CCCFA.
“National will also repeal the recent Conduct of Financial Institutions Act, which was meant to manage financial misconduct, but will impose additional burdens on lenders, making credit more expensive and harder to obtain, even for basic services such as overdrafts and mortgages.
“Cutting financial red tape and unlocking the enormous potential of KiwiSaver is part of National’s broader plan to strengthen the economy so we can reduce the cost of living, lift incomes for all and deliver the public services New Zealanders deserve.”