New Zealand has one of the world's worst retirement taxes. ACT will fix it

“New Zealand has one of the harshest tax regimes for retirement savings in the world, punishing people who do the right thing and save for their future. ACT will fix it by scrapping tax on KiwiSaver earnings,” says ACT Leader David Seymour.

“ACT has compared the retirement savings systems across 38 OECD countries, along with seven major economies outside the OECD, revealing just how badly New Zealand treats people saving for retirement.

“New Zealand is one of just three OECD countries that tax both contributions to retirement savings and the investment earnings those savings generate. The other two, Australia and Turkey, offer substantial tax concessions that New Zealanders miss out on.

“31 of the 38 OECD countries exempt investment earnings in their main retirement savings schemes from tax. New Zealand is an international outlier.

“The damage is done over decades. Every dollar taken in tax today can’t be invested and compounded towards a more comfortable retirement.

“ACT will remove tax on KiwiSaver earnings, allowing New Zealanders to keep more of their own money growing for retirement.

“A 20-year-old builder earning $60,000 would accumulate an additional $209,486 in KiwiSaver by age 65 under our policy. A retiree saves an extra $1000 per year.

“Other parties want to force your money into KiwiSaver, then tax you. ACT says it should be your choice, but if you save for the future we will let you get the full benefit of compounding returns instead of taxing you every step of the way.

“Every time you get taxed on your earnings you don’t just lose that money, but all the future savings that would be compounded from it.

“The OECD has also recognised the problem ACT is solving. Its 2026 Economic Survey of New Zealand warned that our unusual taxation of retirement savings discourages people from building private retirement wealth and contributes to an imbalance between investment in housing and financial assets.

“The OECD recommended shifting tax away from contributions and earnings towards withdrawals in retirement. ACT goes a step further for savers by removing tax on qualifying earnings while preserving tax-free withdrawals.

“While other political parties propose making KiwiSaver compulsory or increasing mandatory contributions, ACT wants to make saving more rewarding.

“A country builds wealth when more people own assets, have savings, invest in productive enterprise and have the confidence to think decades ahead."