The change would be phased in, going up 0.5 percentage points a year a year from 2029.
“If you’re a New Zealander who does the right thing by working hard and saving for the future, you deserve to get ahead. National backs you every step of the way,” Luxon said.
Employer contributions would also go up. As the Government is the largest employer in the country, it would be on the hook for an additional $90 million a year for each of the 0.5 percentage point increases in contribution rates.
National says departments would need to find this money from their existing baselines, which would put further pressure on public service funding.
The party said some funding for the cost pressures would be “met from future Budget allowances if required”.
People will still be able to opt-out of KiwiSaver if they choose, or to contribute at a lower rate if they wish. The bottom 3% rate will remain, if people choose it.
The Budget this year also included a halving of the KiwiSaver Government contribution rate, which, compounding over time, will reduce balances from where they would have been. National has also campaigned on lifting the age of eligibility for superannuation from 65 and may do so again at the next election.
Luxon made the announcement at a Christmas function for National’s Lower North Island region. The policy announcement was not heavily anticipated, with Luxon as recently as this month downplaying the likelihood of a policy announcement.
Luxon’s speech was billed as a reset, following several gloomy polls and rumours of a leadership change.
He appeared at a lectern with a new slogan, “Fixing the Basics, Building the Future”.
The second part of the slogan mimics the slogan used by Australian Prime Minister Anthony Albanese in his successful campaign for reeletion earlier this year. National is not the only party to look across the ditch for ideas: Labour’s Medicare card has echoes of card of the same name which was central to Albanese’s campaign.
Luxon’s speech, well received by party faithful, included an acknowledgment that the economic turnaround had been slow to come and that the past few years had been tough.
He trailed an attack on Labour’s borrowing record, saying the Government’s interest bill was nearly $10 billion a year, “which is more than the total cost of Police, Corrections, the Ministry of Justice, Customs and Defence added together”.
“Or put another way that’s the equivalent of five Dunedin hospitals that could be built each and every year,” Luxon said.
A member of the audience audibly mumbled “s**t”
He called Labour’s record of stimulatory responses to economic shocks “sugar-rush economics”.
“The country can’t afford another cost-of-living payment, or another surge and crash in house prices,” he said.
Luxon also gave the clearest acknowledgment that the economy had been through a challenging time under his leadership.
“I understand that it’s hard going for some right now, as we experience a challenging, but ultimately healthy and essential pivot in the New Zealand economy,” Luxon said.
He also talked warmly of a return to rising house prices, which had been a contentious topic in National, with Luxon speaking warmly of “modest, consistent” price rises, while Housing Minister Chris Bishop has talked warmly about falling house prices in the interest of improving affordability.
“Most economists are picking house prices will pick up a little in the next 12 months as interest rates continue to fall, providing some relief to those homeowners pushed into negative equity in recent years,” Luxon told members.