National once derided KiwiSaver and Working for Families. Now the Labour schemes are part of its pitch to voters.
Christopher Luxon hailed National’s new compulsory KiwiSaver policy as a big step towards, say it with me, “fixing the basics and building the future”. “National will back New Zealanders to get ahead, build a bigger nest egg, and retire with greater financial security,” he said on Sunday. His promise was echoed by finance minister Nicola Willis, in a social media video also devoted to touting future financial security. “It’s all part of our plan to fix the basics and build the future,” she signed off, in what will be remembered as a masterful piece of linguistic innovation.
National’s enthusiasm for KiwiSaver represents a slight pivot from its position when the scheme was first announced in 2005, which was, to paraphrase, that it was all a dumb waste of time. Back then the party’s finance spokesperson Bill English told the National Business Review it was a “pretty expensive solution to a badly specified problem”. His boss John Key went further, comparing the scheme to a “glorified Christmas club”. A couple of years later, English criticised the minimum employee contribution rate, which at that stage was 4%, saying those on lower incomes couldn’t afford that level of expense. The following year, it was reduced to 2% by the newly elected National government. The party proceeded to further water the scheme down, removing the $1,000 government kickstart payment in 2015 and halving the maximum yearly government contribution in last year’s budget.
Luxon and Willis had no time for that kind of carry-on as they took to the stage at their party conference this weekend. English once got the nickname Double Dipton. He may as well have been Double Dipshit to his National compadres. In contrast to his 2006 assertions, Luxon and Willis made it clear that KiwiSaver was addressing a highly specified problem. “In a more uncertain world, New Zealand needs higher savings and greater financial resilience. Compulsory KiwiSaver will help deliver both,” Luxon said. He reinstated a kickstarter payment, this time promising $1,500 to newborn babies, while dismissing the idea that low-income earners couldn’t afford a 6% contribution, saying those who were in significant hardship could opt out.
The turnaround may be necessary to realise a longstanding, bipartisan policy goal: making sure millennials don’t get the same state benefits as their parents. With more retirement savings in the bank, my sadsack generation might not need to claim NZ Super at age 65. At the least, we should be able to make do with a bit less cash from the government each week.
National’s new stance makes sense as a long-term play to hurt me, personally. Its new attitude to Working for Families is harder to explain. National has made the scheme a part of its pitch to butter-starved voters, highlighting its moves to lift the income thresholds at which families receive assistance and expand the in-work tax credit as tangible cost-of-living relief.
That’s something of a contrast to its position when Working for Families was announced by Helen Clark’s Labour government in 2004. Then Key called it “communism by stealth” while deriding it as “a giant welfare package” which was pushing up people’s mortgage rates.
This is not to say National is in love with every Labour policy. It’s been scathing about the cost-of-living measures its rivals have put forward recently, with campaign manager Simeon Brown calling its promise to institute a $20 fare cap on public transport a “fanciful” and poorly costed extravagance. Luxon has written off its plan to set up a New Zealand Future Fund as “commercially illiterate” and an “absolute load of drivel”. Both men have described eliminating the $5 fee on prescriptions and allowing three free GP visits per year as costly and untargeted.
That’s politics. You’ve got to call your opponent a fool and a wastrel to win, particularly if you’ve presided for three years over a recession, rising unemployment, a near-record amount of insolvencies and a lingering crisis-level cost-of-living reality. But it’s worth taking the criticisms with a grain of salt. National may think free doctors’ visits and capped fares are stupid right now but elections have a habit of turning today’s stupid into tomorrow’s sensible promise to voters. If Labour wins in November, history would suggest that National will be going into the 2035 election on a key policy plank of five free GP visits and a moderate expansion to the future fund.
