The Government has quietly dropped one of National’s 2023 election promises to renters, with Housing Minister Chris Bishop confirming the party will not let young people dip into their KiwiSaver to pay a rental bond after all.
Bishop was asked about the policy at a post-Cabinet media conference on Monday, and he made clear it is going nowhere. “We have not made any progress on that,” he said. “I took some initial oral advice from memory, and the short answer is it’s way more complicated than we thought it would be. So we’re not intending to progress that.” He added that the idea had ended up in what he called the “nice idea, but too difficult basket”.
It is a notable retreat from a policy National sold hard during the last campaign. In July 2023 Bishop pitched the plan as a way to ease the cash crunch that stops younger New Zealanders moving into a flat. People under 30 would have been able to draw on their retirement savings to cover a bond, capped at five years’ worth of payments, with the money sent straight to Tenancy Services and returned to the KiwiSaver account once the tenancy ended.
At the time Bishop framed it as a practical fix. “Getting together up to four weeks’ rent in advance was not easy for many people, particularly for students and young graduates, who don’t have a lot of cash,” he said when the policy was unveiled. The mechanics, he explained back then, were simple enough. “The money will be transferred from their KiwiSaver account to Tenancy Services and returned to the KiwiSaver account when the tenancy ends.”
Almost three years on, the practical fix has run aground on the practicalities. Asked by reporters whether renters would still be able to use KiwiSaver for a bond, Bishop confirmed the work had stalled almost as soon as it began, with officials warning him the plumbing was far harder to build than the slogan suggested. You can read the full exchange in RNZ’s account and 1News’ report of the media conference.
Prime Minister Christopher Luxon did not dwell on the loss. Pressed on the shelved promise, he pointed to a different KiwiSaver change the Government has delivered. “The good news is, we’ve done KiwiSaver for farmers. So that’s great,” he said, referring to recent moves to bring self-employed and contract farm workers into the scheme.
The quiet burial will not surprise the experts who picked holes in the idea the moment it was announced. When National launched the policy in 2023, retirement and budgeting specialists lined up to warn that raiding a retirement fund to cover a landlord’s bond solved the wrong problem. Susan St John, of the University of Auckland business school, called it “stop-gap, short-termism” and said the country did not want to see KiwiSaver balances “used for different purposes” other than retirement.
David Boyle, of Mint Asset Management, told interest.co.nz that politicians too often treated KiwiSaver as “a little pot of gold” for solving one-off problems. “If you keep tweaking around the edges, it becomes something that it wasn’t designed to be,” he said, pointing to the investment returns young savers would forgo while their money sat as a bond rather than compounding in a fund. Ruth Smithers, chief executive of budgeting network FinCap, was blunter still, saying her organisation generally saw accessing KiwiSaver early “as being an absolute last resort”.
The Greens went further at the time, arguing the policy treated a symptom while ignoring the disease. Co-leader Chlöe Swarbrick said she could not understand the logic. “I genuinely for the life of me, cannot understand how anyone can look at the housing crisis and conclude that a key issue is tenants needing to raid their retirement savings because landlords have set rent and bonds too high,” she said, warning the scheme risked pushing rents and bonds up rather than down.
For renters, the upshot is that nothing changes. The deposit barrier that the policy was meant to lower is still there, and tenants who cannot scrape together a bond will keep doing what they already do, which is to seek help from Work and Income or borrow from family. The Government’s answer to that gap, for now, is the existing hardship and bond assistance available through Work and Income rather than a KiwiSaver workaround.
National, meanwhile, is not retreating from KiwiSaver as a campaign theme. Far from it. The party is heading into this year’s election with a much bigger set of plans for the scheme, including making it compulsory, lifting the default contribution rate to 6 percent, automatically enrolling newborns, paying a Government contribution to people on parental leave, and making employer contributions compulsory for workers over the age of 65. Those are weighty changes to the savings of millions of New Zealanders, and they will draw their own scrutiny in the months ahead.
The contrast is the story. A modest, renter-focused idea that promised quick help has been put aside as too hard, while a far larger reshaping of KiwiSaver is being readied for the campaign. Voters who care about how the parties propose to manage their retirement savings, their rents and their household budgets can compare where every party stands using Newswire’s voting tool ahead of the November election.
What do you make of National dropping the KiwiSaver bond promise, and do you trust the bigger KiwiSaver plans now on the table? Share your thoughts in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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