How can National support the finance sector?

The incoming government can support the mortgage and finance industry by providing stability, promoting the importance of advice and increasing financial literacy, industry leaders say.

Their comments come as New Zealand prepares for a new government after preliminary 2023 general election results show National and ACT are in a position to govern, with the final result to be determined after thousands of special votes are counted. 

Incoming Prime Minister Christopher Luxon welcomed 23 new National MPs to Parliament on Monday, telling Radio New Zealand Morning Report that he would “get cracking” with building a relationship and starting a conversation on arrangements with each of the individual political parties involved, details of which he said would be “kept private”.

Ryan Edwards (pictured above left) managing director of The Adviser Platform acknowledged that the incoming government had “a lot of things to tackle” and said that he hoped the financial services sector would be treated largely as “business as usual” and “avoids further uncertainty”.

All sides of politics recognise the importance of advice and education and acknowledge the levels of underinsurance and low retirement savings that Kiwis are struggling with, he said.

“After years of change, the government can best support the industry by providing stability and allowing the industry to get on with the job of helping Kiwi families without constant tinkering with policy or regulation,” Edwards said.

Edwards said that he supported National’s undertaking to wind-back the CCCFA, telling NZ Adviser that this may “reduce uncertainty and create efficiency” in what had been a challenging market for borrowers.

He said industries generally thrived with less red tape and government intervention rather than more. It was therefore important that incoming government “reduce barriers to entry” and “promote the importance of advice”.

“Tackling financial literacy via increased awareness and education would be a great place to start as those who receive sound financial advice are generally far better off than those who do not,” Edwards said.

Financial Services Council NZ CEO Richard Klipin (pictured above right) said in a statement earlier this week that the industry body for the financial services sector looked forward to working with the incoming government to pursue policy that could strengthen the financial resilience and wellbeing of all New Zealanders.

Klipin said that there were many opportunities to achieve this, and that the Prime Minister-elect had set “a number of clear policy signals” at the FSC annual conference in August, at which New Zealand First Leader Winston Peters and the ACT Party also outlined their priorities.

“The FSC will work constructively with his government to ensure new policy settings are well informed by the collective expertise of the industry,” Klipin said.

Klipin said that the rising cost of living was the most pressing issue for Kiwis and that this needed to be addressed for both the short and long term. He also reiterated that a full review of KiwiSaver was due, to ensure New Zealanders received the best possible returns to prepare them for retirement.

“It is time for some fresh thinking and innovation with KiwiSaver. It has been a huge success for Kiwis and now is the time to capitalise on that success,” Klipin said.

The mortgage and finance industry has spoken in favour of National’s win, supporting its policies which include full reinstatement of interest deductibility on rental properties in April 2026, a wind-back of the Credit Contracts and Consumer Finance Act and a reduction in the bright-line test from ten years to two years.

In a statement provided to NZ Adviser on Monday, an ACT spokesperson said that its policy was to “immediately reinstate” mortgage interest deductibility from April 2024.  This was “now a matter for negotiations” which the party would not be conducting through the media, the ACT spokesperson said. 

What are your thoughts on National’s win and how the incoming government can support the mortgage and finance sector? Share your thoughts in the comments section below.