Mood of the Boardroom: The KiwiSaver conundrum (NZ Herald)

Mood of the Boardroom: The KiwiSaver conundrum (NZ Herald)

A narrow majority of business leaders believe New Zealand’s large capital pools should play a greater role in funding critical infrastructure.

Just over half (54%) of respondents to the Mood of the Boardroom survey say infrastructure development should rely more on investment from the NZ Super Fund and KiwiSaver funds. A further 28% are unsure, while only 18% oppose the idea.

Supporters see an opportunity to keep capital working at home and create long-term benefits.

“KiwiSaver funds will have $295 billion to invest in New Zealand if the opportunities are there,” says Simplicity founder and chief executive Sam Stubbs.

“It will create many high-paying jobs. But if sent overseas, it will create exactly zero jobs at home. Go figure.”

Some point to international precedents where retirement savings have been successfully channelled into infrastructure, with one calling it a “proven model globally.”

Others urge caution, noting that fiduciary duties require investment decisions to prioritise returns. “It depends on returns. The primary focus is to ensure we have sufficient to meet retirement commitments,” says a banking CEO. An experienced chairperson warns against “poor quality, poor return projects promoted by politicians” that risk good money chasing bad.

A similar point was raised by Milford Asset Management CEO Blair Turnbull: “We strongly support sustained investment in New Zealand’s infrastructure, underpinned by long-term bipartisan planning and a robust governance framework that leverages both public and private capital. In the context of KiwiSaver, we welcome the expansion of listed infrastructure opportunities, provided we remain anchored to the scheme’s core purpose: safeguarding long-term retirement savings.”

Executives stress the need for strong governance, commercial mechanisms such as tolling, and bipartisan planning. Some also argue for policy reform, including compulsory KiwiSaver and an Australian-style superannuation model to build a larger domestic capital base.