Federated Farmers hails rural banking report
Federated Farmers says the final report into banking competition is a significant step forward for rural New Zealand - and a vindication of the farming sector's concern.
That's Agriculture Minister Todd McClay's response to repeated calls from Federated Farmers to allow young farmers to use their KiwiSaver funds to buy their first farm, flock or herd.
An online Federated Farmers petition calling on the Government to make urgent changes to KiwiSaver rules remain active. And the farmer lobby has been reminding the Government that on the campaign trail of the 2023 election, McClay stood up in front of young farmers in Morrinsville and made a promise that he would make it happen in the first term of the new Government.
McClay, who spoke at the Primary Industries Summit in Christchurch last week, urged Federated Farmers to be patient.
"We're working through it. We'll get to it, I guess," he told Rural News.
"If that's all they're complaining about, it's because all the other things they campaigned on have been done, and farmers are in a much better place," he says.
"I suppose if all we'd done is KiwiSaver and not fixed the freshwater rules, or the RMA, or all the things that were harming farmers around climate change from the Labour government, there would be a much longer list.
"But we're working through that now. We've just got to get it right and make sure it's fair to all New Zealanders, but it was a commitment we made, and we've still got a year and a half to go before the election."
Finance Minister Nicola Willis signalled at Fieldays that the Government may change the rules to allow farmers to withdraw their KiwiSaver to buy their first farm.
However, the Government has poured cold water on a Feds request to allow withdrawals so that sharemilkers could buy their first herd.
The Government is also facing criticism from some KiwiSaver fund managers, who warn that allowing farmers to use their KiwiSaver funds to buy a first farm or herd could be problematic.
Sam Stubbs, co-founder of KiwiSaver fund Simplicity, says this could weaken KiwiSaver's core purpose as a retirement savings scheme and offers only marginal benefits to a small group of people, while impacting millions of members.
Stubbs believes the changes, if approved by the Government, would have limited impact on farmers.
"KiwiSaver isn't well-suited for self-employed individuals, including many farmers, as it lacks employer contributions and government subsidies have been whittled away over time," he says.
Feds outgoing dairy chair Richard McIntyre says KiwiSaver is designed to help New Zealanders grow their wealth to financially support them in their retirement years, but farmers tend to take a different pathway to financial security.
"For a young dairy farmer that pathway is to get into sharemilking early, build up equity and a herd, and to eventually buy their own farm. It's a well walked progression pathway," he says.
