Winston Peters is proposing to establish a new state-owned KiwiSaver fund, saying private schemes were a "pot of gold" for providers, but not savers.
Speaking at the NZ First conference in Christchurch today, Peters said KiwiSaver providers had extracted excessive fees from savers. Since it was formed five years ago, providers had "sucked off $325 million from the people paying into the scheme".
According to Peters, an "independent source" had told him that over the next 30 years, the amount of fees would climb to $22 billion.
"KiwiSaver is a pot of gold - for the providers - not the savers."
Peters today proposed that a scheme on the same footing at the New Zealand Superannuation Fund, called KiwiFund, which would be government guaranteed.
Return would be "a lot higher" than they were in private providers, Peters said.
"Our plan is to change KiwiSaver so that it is a truly Government backed and managed retirement fund. Because of the economies of scale and the elimination of hordes of ticket clipping fund managers costs will be greatly reduced. People who pay in to KiwiSaver will get their full return," Peters said.
"Unlike KiwiSaver providers - our fund would be government guaranteed and it will have a lot higher return for savers. Remember, private providers in Wall Street destroyed the retirement plans of millions of Americans through their ticket clipping and risky investments."
The establishment of KiwiFund was a "bottom line" policy required in any coalition negotiations after the 2014 election.
Funds would be used to buy back land and "assets" within New Zealand.
After the speech, Peters suggested private schemes would be allowed to continue alongside KiwiFund, but he believed that people would see the higher returns on offer and be attracted by them.
The Crown guarantee of the fund would cover the capital invested, and would not guarantee returns.
Peters said he respected the independence of the NZ Super Fund, and would not dictate how money was invested in KiwiFund. Its mandate would require a higher level of investment than was the case for NZ Super, he said.
In the course of this weekend's conference, Peters has accused the Reserve Bank governor of behaving like a "Haitian witch doctor", and called for inquiries into the insurance sector and banks fees.
Also at the NZ First conference today Peters said there was an "obvious" need for a new state owned insurance company, saying another severe earthquake was a certainty.
Insurance companies had failed in their duties in rebuilding Christchurch, wasting months "haggling over claims," he said.
"We warned from the outset that the insurance industry would rip off both the people of Christchurch and all premium payers nationwide," Peters said.
"Generations of insurance payments gone and now insurance companies have the audacity to restore profits by ratcheting up premiums everywhere."
Peters said Christchurch showed that New Zealand should have a genuinely state owned insurance company.
"We did have our own insurance company once - State Insurance - but it was sold so it could be a cash cow for the Insurance Australia Group by the fourth Labour Government. It is obvious that we need to set up our own insurance company once again," Peters said.
"Because if there is one certainty in these uncertain times it is there will be another severe earthquake."
- © Fairfax NZ News
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