Photo: RNZ / Angus Dreaver
National is promising to allow people to split their KiwiSaver between multiple providers.
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.
"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."
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.
"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.
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."
Labour leader Chris Hipkins said the laws were there for a reason.
"Ultimately what we're trying to do here is make sure the banks and financial institutions are being responsible in their conduct. It is a regulated area for a reason - because ultimately these are consumer protections that the National Party are proposing to wind back."
Editoral note: This article has been amended for clarity, changing the word "funds" in the first sentence to "providers", as providers can already invest in multiple funds.