Back to the future with NZ First

On Sunday New Zealand First leader Winston Peters trekked to West Auckland — ‘‘the home of traditional hard-working Kiwi battlers’’ to announce two policies he hopes will resonate with that constituency nationwide.

Each had a ‘‘back to the future’’ flavour, as Mr Peters announced that his party would campaign on compulsory superannuation, and regaining ownership of the Bank of New Zealand.

As Mr Peters well knows, New Zealand once had a compulsory superannuation savings scheme, introduced by the third Labour government in the early 1970s. It was scrapped by National in 1975 and replaced by a universal superannuation scheme.

Mr Peters joined that National government in the 1978 election, and its credo of keeping universal superannuation at age 65 sacrosanct remains a core part of his political DNA.

National, meanwhile, citing unaffordability, campaigned on raising the superannuation age in the 2023 election and has said that will be its policy again in 2026.

During the former election campaign NZ First called for KiwiSaver to be made compulsory from someone’s 18 birthday, and after commencing employment.

The party is doubling down on that in 2026, wanting KiwiSaver enrolment compulsory at birth, augmenting that with an automatic immediate Crown contribution of $1000 for citizens only.

Mr Peters believes that will generate a nest egg for ‘‘the KiwiSaver Generation” and normalise savings as a lifelong habit.

Whether that would be the case is an imponderable, but other nations, notably Australia, have some form of compulsory superannuation. Its scheme kicks in once someone begins employment, and has grown to be the fourth-largest pension fund in the world.

New Zealand does have the Cullen fund so it has made steps, albeit not as dramatic, in that direction.

However, Mr Peters will need to convince a country reluctant to embrace anything which smacks of obligation that it should go down this path again.

The last time Mr Peters tried, a 1997 referendum, when in coalition with National, on introducing a compulsory retirement savings scheme, resulted in a resounding rejection: 92% of voters said no, with a turnout of 80%.

NZ First will likely also face huge hurdles in implementing the second major policy announced by Mr Peters: that the government buy back the BNZ.

Today BNZ is owned by the National Australia Bank but it was once a state-owned asset. Its slip out of New Zealand’s clutches began in 1990, when the then National government had to act to prevent its collapse, bailing it out to the tune of $380 million.

Two years later the Australian firm bought it in a deal valued at $NZ1.48 billion; today the bank is valued at many billions more than that and its multimillion annual profits flow out of New Zealand and across the Tasman — a state of affairs which dismays Mr Peters and his Nationalist with a capital ‘‘N’’ leanings.

NZ First proposes that BNZ be bought back and merged with the already taxpayer owned Kiwibank to form the “National Bank of New Zealand’’ — an entity of sufficient size and captilisation to be able to compete with the other major banks, which are also all Australian-owned.

Again, this is a step up from previous NZ First policy; in 2023 it campaigned on establishing a ‘‘New Zealand Infrastructure Bank’’ and creating a Crown guarantee for New Zealand-owned banks to expand and compete with rival banks.

Simply buying an existing bank — and likely making it the central government banker — would be a simpler process, but to do so comes with the rather large proviso that the current owners of BNZ are at all interested in selling.

Then there is the even larger proviso of how a cash-strapped government is meant to afford such a deal, if it were even possible. Mr Peters has posited that it could be achieved through a mix of bond issues, having the BNZ invest in long-dated Crown debt, investment from the Crown’s sovereign wealth fund and from ACC funds, and keeping Kiwibank’s existing capital base.

Despite Mr Peters pointing out that many countries have a state-owned bank as an active player in their financial systems economists have, largely, doubted that buying back the BNZ is in any way a viable option.

That is as may be, and they may well be right, but economics may well not be the decisive factor if — as seems entirely possible — NZ First is in a position to decide the composition of the government following the November 7 election.