ACT proposes removing tax on KiwiSaver investment earnings

The Act Party has announced a policy to abolish tax on investment earnings within KiwiSaver and other superannuation accounts. This proposal would replace the current Government contribution, which can reach up to $260.72 annually, for members who receive employer contributions.

Leader David Seymour unveiled the plan at a campaign launch in a Penrose industrial warehouse in Auckland. He stated that the changes would allow returns to "stay invested and generate savings for generations to come".

The party claims the tax relief from removing investment tax would be more substantial than the lost Government contributions. Act's projections suggest the policy could reduce government revenue by approximately $1 billion annually, or $2.4 billion over four years including the savings from ending contributions.

The impact of the policy would vary based on individual circumstances and investment returns. Act provided case studies suggesting a 20-year-old builder earning $60,000 could have an additional $209,486 by age 65, while a 25-year-old nurse earning $100,000 might gain over $217,000.

How it developed

• Sun 4 Oct, 3:42pmThe total plan cost is estimated at $2.4 billion over four years, including benefits from ending the government contribution.

Where reports differ

• One report estimates the annual revenue loss at $1 billion, while another states the total plan would cost $2.4 billion over four years.
• Labour's Hipkins argued the plan would transfer wealth from low-income accounts to high-income accounts, whereas Act claims it provides greater relief.

Compiled from reports by NZ Herald, The Post, 1News, Stuff and RNZ.