Prime Minister Christopher Luxon on rumours of a leadership coup, National's KiwiSaver policy and why an OCR cut ‘would be fantastic’

Following the National Party's release of its first key election policy, Christopher Luxon says he "absolutely" will be leading the party into next year's election.

This comes with speculation of a leadership "coup" by Chris Bishop with Newstalk ZB host Mike Hosking telling Luxon on Monday that Bishop was coming for him.

Luxon said he did not think it was the case. Bishop was a good minister and a good friend, he said.

“It’s hard to take it seriously … I’ve been reading this stuff and hearing this stuff ever since I came here but I’m very focused on what I’ve got to do.”

When asked if he would lead the party to next year’s election, Luxon said “absolutely”.

Luxon's confidence follows National's release of its first key election policy on Sunday.

If elected into Government next year, Luxon says National will increase KiwiSaver contribution rates for employers and employees, with the aim of getting to a 6% contribution rate for both employers and employees - this would be 12% overall - by 2032.

Following this year’s Budget, the Government made changes to KiwiSaver. These include employer and employee contribution rates increasing to 3.5% from April 2026, and to 4% in April 2028.  It’s currently at 3% - KiwiSaver members can choose to stay at the current 3% rate and still be matched at this rate by their employer.

'A commonsense thing'

In a speech marking National's two years in Government, in Upper Hutt on Sunday, Luxon said: "If elected next year, National will continue to increase contribution rates for employers and employees, so individual balances grow faster, whether you’re saving for retirement or a deposit on your first home."

"Those additional increases will start from 1 April 2029, rising by 0.5% per year until 1 April 2032, to a 6% contribution rate for employers and employees."

"This means National will double KiwiSaver contributions. And it will mean a combined rate of 12%, matching Australia," Luxon said.

But that "match" isn’t the same - Australia’s scheme is compulsory and employers must pay at least 12% of an employee’s ordinary time earnings.

Speaking to Hosking on Monday, Luxon said this election policy was a bottom line for the party. 

“It has to happen because we have to put the country on a much better pathway on savings and investment."

New Zealand First already announced its KiwiSaver election policy in September, proposing to increase employee and employer contributions to 10% and making KiwiSaver compulsory. At the time, NZ First leader Winston Peters said KiwiSavers and employers would receive tax cuts to cover the increases. 

Luxon told Hosking it was positive his coalition partner wanted to increase contributions as well, but the means with the way they would go about it might be different. 

“I don’t actually know why it’s so political. I think it’s actually a commonsense thing. If you look at places like Ireland and Australia that are wealthier, they actually have higher retirement savings.”

Speaking to RNZ on Monday, Luxon said National did not want to make it compulsory because they wanted to give people flexibility if they were going through a difficult period.

Labour leader Chris Hipkins welcomed National’s “conversion” to supporting KiwiSaver, telling RNZ there would need to be a transition plan to support people on lower incomes so they could get KiwiSaver and maintain their contributions. National opposed KiwiSaver when it was introduced by the then-Finance Minister Michael Cullen.

“Increasing KiwiSaver contributions is a good thing, but without a plan to support people in the process of increasing KiwiSaver contributions, a lot of Kiwis are going to be hit really hard by it," Hipkins said.

Luxon told Hosking there will have to be some tweaks on the margins from time to time when it comes to KiwiSaver. 

"Setting ourselves on a pathway - this is a long-term thing. It gives people time to adjust ... It's incremental steps - it makes all good sense."

Superannuation

Speaking to RNZ, Luxon said National had a full commitment to National Superannuation.

“We think that should be an entitlement. It shouldn’t be means tested or asset assessed as it is in Australia, and we think that’s important because people need to have that clarity and that certainty going forward.”

“But what we know in the years ahead is that we’re going to need to augment that,” Luxon said, with New Zealanders having to have bigger KiwiSaver balances.

“Us making this commitment and doing it gradually so employers and employees have time to adjust - I think that’s a good thing.”

When asked about the Government’s decision to half its contribution, which was a major incentive, Luxon said: “Well, the major incentive actually is that if your employer is going to put 3% in today and ultimately 6% in the future, that is the major incentive and the major driver of you building up that wealth and those funds.”

The Government’s contribution was important at the beginning, Luxon said, but now 93% of people were part of the scheme and it was a compelling scheme.

Cross-party action?

Te Ara Ahunga Ora Retirement Commission recently released its Review of Retirement Income Policies 2025. As part of the review, Retirement Commissioner Jane Wrightson called on cross-party action when it came to the retirement system.

“Decisions, such as whether to change the age of eligibility for NZ Super or make KiwiSaver compulsory, cannot be made without considering the system as a whole," Wrightson said.

National's policy at the last three elections has been to raise the age of superannuation - with its proposal to keep the NZ Super age at 65 until 2044, and then it will be gradually bumped to 67.

Last Thursday, Finance Minister Nicola Willis told interest.co.nz that any cross-party discussions on retirement - and with that KiwiSaver and Superannuation - started with political parties being prepared to accept that the current settings for superannuation are becoming increasingly challenging and that change would be needed.

“I haven’t seen that acknowledgement from opposition parties yet," Willis said.

“Certainly I have seen that acknowledgement across the coalition and that was why, despite it not being in any of our manifestos, we were able to agree in this year’s Budget that increasing contributions to KiwiSaver was a good idea,” Willis said. 

Last Friday, Labour’s finance spokesperson Barbara Edmonds told interest.co.nz that Labour was committed to keeping the age of superannuation at 65.

“Beyond that, we have always been open to constructive, bipartisan work to better secure New Zealanders’ retirement incomes.”

“Let’s not forget that it was Labour who established KiwiSaver and the NZ Super Fund. In Budget 2023 Labour extended the 3% government contribution to KiwiSaver for those on parental leave, recognising the unpaid nature of childcare.”

Edmonds said: “We appreciate the Retirement Commissioner’s important work and we will consider her recommendations as part of our ongoing policy considerations.”

Labour has yet to release a policy on KiwiSaver.

Official Cash Rate

With the Reserve Bank's Monetary Policy Committee (MPC) set to review the Official Cash Rate (OCR) on Wednesday, Hosking asked Luxon for his thoughts. The OCR's currently at 2.5%.

Luxon has been outspoken in the past about the OCR, telling Hosking in August he personally thought the Reserve Bank should have been more aggressive with its cut.

“Last time I spoke about that I got into serious trouble,” Luxon said on Monday.

"Forecasters have been talking about a 25 basis point [cut], which would be fantastic because that would be the ninth cut that we've had under [this] government."

"And if that gets transmitted out to commercial rates which it will do, that put lots of money in people's back pockets," Luxon said.

When asked about the value of the New Zealand dollar and what it says about the economy, Luxon said “we’ve still got work to do but it’s obviously very good for our exports and that’s been a good thing … The dollar is a floating dollar and we’ve got to get the fundamentals of this economy right”.

Bringing up the United States Federal Reserve and the openness about how each member voted and whether this could be done here with the Reserve Bank’s MPC, Luxon said: “We’ve started to.”

“We have the formal committee meetings and they’ve actually started to express what the votes were.”

Luxon referred to the MPC’s OCR decision in August, which saw a cut from 3.25% to 3%.

Two members of the Reserve Bank’s six-member committee voted for a 50-point cut which would have dropped it from 3.25% to 2.75%.

While you didn’t know how certain people voted, Luxon said: “You do want some coherence so you get a clear beam from that group as to what they actually are thinking."

Wednesday marks the last OCR announcement for 2025 and there's some changes awaiting the Reserve Bank.

New Governor of the Reserve Bank Anna Breman will start on December 1. And Christian Hawkesby, who has held the Governor role on a short-term basis having previously been Deputy Governor with responsibility for Financial Stability, will finish up at the Reserve Bank on November 30.