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New Zealand

National plan to use KiwiSaver to pay student flat bonds


State universities promise students a way to weather the price shocks of flat living, but they’ll have to dig into their savings to get there

National Party leader Christopher Luxon and housing spokesman Chris Bishop today announced a policy allowing young people under the age of 30 to access Kiwi Saver accounts for high-value flat bond payments.

This primarily student-focused policy will be unveiled on the University of Auckland campus and the new school year will begin with an exhibition of clubs and campus organizations.

Under the national system, students can withdraw four weeks’ worth of rent at once as a security deposit payment.

Bishop said the policy was originally proposed by the Young Nationals.

“Collecting apartment bonds is a real problem for many young people,” he says. “The security deposit payment can cost up to four weeks’ rent, and if you look at the average rent around Auckland or Wellington, it can be up to about $2,500.”

Luxon said the situation was “incredibly tough” for students, who often lacked large amounts of cash to get around.

Under this policy, the funds will be channeled directly to Tenant Services and held by Bond Services until fate is decided.

Bishop said the policy would focus only on bonds, without considering fees and other transaction costs.

While students are often ‘cash poor’, they ‘often have a decent amount of money’ [their] Kiwi Saber”.

He said it was a “common-sense legislative change” to help young people enter the labor force, but conceded that young people would lose some of the interest they could have earned on Kiwi Saver. .

The Owen Glenn building at the University of Auckland was bustling with students returning to classes after a mid-semester break, many of whom will have to work hard to make ends meet.

Luxon said it was well received among students on the floor and dismissed the idea that the policy was an attempt to buy student votes.

He disagreed that students tended to vote left-wing, and said National University was doing “exceptionally well” among its age group.

“What we’ve seen in the last 18 months is that young people actually know enough about why good economic management is important to them,” he said.

An exhibition at the University of Auckland campus where National announced.Photo: Matthew Scott

Student reactions to the policy were even more mixed. A student named Shaw, who was waiting to enter the lecture, said the idea sounded sensible, but many students don’t really care about such details.

“However, it seems sensible because the cost can be a big issue for people who have to change apartments on short notice,” he said.

Another student said it was a good idea, but he wasn’t sure if he would vote nationally.

At a Young Act stall, a student named Abby disagreed with the policy, saying it would shave off vital savings for the future.

“National seems obsessed with digging deep into KiwiSaver,” she said. “It’s not for that.”

At the Greens stall, there was a surprising amount of agreement with Young Act supporters.

Green MP Gorliz Gurlafman said the policy was simply “moving money”.

“It sounds even more embarrassingly ambitious for the big party policies that by this point in the election and election cycle should actually have bold ideas to make things easier for students.”

He said the Greens’ rental protection policy would help all renters of all ages by forcing higher rental standards and long-term financial assistance to renters.

“This affects people of all ages, and taking money out of retirement is not the way forward, as it undermines people’s ability to live well in old age. , is not transformative.”

The Green Party’s policies have drawn criticism from the centre-right, with Akt housing law spokesman Brooke van Velden saying they are attacking landlords.

For national universities, dipping into KiwiSaver allows them to keep their promises to their students without losing the favor of their landlords. So that’s the mass of votes they count on.

At a post-cabinet press conference, Prime Minister Chris Hipkins called the policy “another example of the National Party constantly raiding Kiwi Saber”.

“Ultimately, the main message young New Zealanders take out of this is that they will have to wait longer to retire and have less retirement savings.”

Hipkins wondered whether many cash-strapped young New Zealanders had enough money in their KiwiSaver accounts to pay off the bonds.

https://www.newsroom.co.nz/national-digs-into-kiwisaver-to-pay-for-student-flat-bonds National plan to use KiwiSaver to pay student flat bonds

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