ℕ𝕒𝕥𝕚𝕠𝕟𝕒𝕝 𝕡𝕣𝕠𝕡𝕠𝕤𝕖𝕤 𝕂𝕚𝕨𝕚𝕊𝕒𝕧𝕖𝕣 𝕤𝕡𝕝𝕚𝕥, 𝕒𝕝𝕝𝕠𝕨𝕚𝕟𝕘 𝕣𝕚𝕤𝕜𝕪 𝕤𝕡𝕖𝕔𝕦𝕝𝕒𝕥𝕠𝕣𝕤 𝕒𝕔𝕔𝕖𝕤𝕤 𝕥𝕠 𝕂𝕚𝕨𝕚𝕊𝕒𝕧𝕖𝕣

ℕ𝕒𝕥𝕚𝕠𝕟𝕒𝕝 𝕡𝕣𝕠𝕡𝕠𝕤𝕖𝕤 𝕂𝕚𝕨𝕚𝕊𝕒𝕧𝕖𝕣 𝕤𝕡𝕝𝕚𝕥, 𝕨𝕠𝕦𝕝𝕕 𝕣𝕠𝕝𝕝 𝕓𝕒𝕔𝕜 𝕥𝕨𝕠 𝕗𝕚𝕟𝕒𝕟𝕔𝕚𝕒𝕝 𝕝𝕒𝕨𝕤

O

pposition National is promising to allow people to split their KiwiSaver between multiple funds.

They also want to roll back measures brought in by Labour including the Credit Contracts and Consumer Finance Act (CCCFA), and the Conduct of Financial Institutions Act (CoFI), saying these amount to red tape.

National Party leader Christopher Luxon announced the policy at the Financial Services Council in Auckland on Thursday morning. The council's members include major insurers, fund managers and KiwiSaver and workplace savings scheme providers.

"We think it's a sensible change to drive competition, to give savers more choice and to support innovation in the sector," Luxon said.

"There is nearly $100 billion now of capital built up in KiwiSaver, but we're not using it as effectively as possible.

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"Giving Kiwis the choice to spread their savings across multiple providers will ensure fast-growing companies looking to attract investment from Kiwisaver products. Providers will have more opportunities for investment.

"KiwiSaver can, and it should, play an important role in capitalising the New Zealand economy, fuelling that growth, and innovation for the future."

I remember listening to heartfelt submissions on loansharks in the last term and the changes we made to the law. Now National is promising to get rid of the measures we put in place to protect vulnerable people from being exploited. Shameful. https://t.co/c3wVanvIDg

— Marja Lubeck MP (@MarjaLubeck) August 17, 2023

In a statement, National's Commerce and Consumer Affairs spokesperson Andrew Bayly said allowing people to invest in multiple KiwiSaver providers would drive innovation and competition, and put downward pressure on fees.

We don't do bottom feeder policies. pic.twitter.com/QaIqlRiXyh

— Christopher Luxon ChatGPT (@rugbyintel) August 17, 2023

"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," he said.

He said the CCCFA had been intended to restrict predatory pay-day lenders, but it had instead stifled access to credit and led to borrowers being subjected to intrusive questioning from their bank over their spending.

The government introduced the law in 2021, but it moved to ease the rules last year after complaints from banks and borrowers alike they were too restrictive.

In one case, a Dunedin mother said she was told by a bank it would only consider giving her a mortgage if she returned to work within 90 days of giving birth.

Lenders and budget advisors have since said the law appeared effective at clamping down on loan sharks, but time would tell whether it would need further changes.

"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," Bayly said.

The CoFI had been meant to manage financial misconduct, Bayly said, but would instead impose burdens on lenders - making credit more expensive and harder to get.

The law was passed in June 2022 but is not set to take effect until late March 2025. It sets up a licensing regime for banks, insurers and other lenders administered by the Financial Markets Authority.

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They would also need to set up their own fair-conduct programmes, and subject them to regulations banning some sales incentives - such as bonuses for selling a certain number of insurance policies.

Luxon called the removal of the two laws "common-sense regulatory changes".

"The current rules have lost all realtionship between risk and responsbility and that has to change. So we're going to maintain the tight restrictions on predatory lenders but we are going to narrow the scope for the remaining legislation, largely rolling back the government's recent changes.

"In reality those changes have just loaded costs and delays onto anyone looking to borrow even a small sum of money."

"Instead of introducing new rules and new regulators, the focus should actually be on cleaning up the rules that we already have and enforcing those rules in a fair and predictable and certain way."

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