Federated Farmers is pushing the Government to advance proposed KiwiSaver changes before Parliament rises for the election, warning that young farmers and other workers living in employer-provided housing have already waited long enough.
The organisation says the KiwiSaver (First Home or Farm) Amendment Bill could remove two practical barriers that currently prevent some people from using their KiwiSaver in the same way as other first-home buyers.
Federated Farmers dairy chair Karl Dean says the Bill being added to Parliament’s Order Paper this week is a positive step, but not enough on its own.
He wants the legislation to receive its first reading before Parliament rises so it can move to Select Committee.
“These changes are long overdue and will make such a meaningful difference for young farmers across the country,” Dean said.
What would change?
The Bill would make two significant changes.
First, it would allow people living in service tenancies to use their KiwiSaver to buy a first home without having to move into that property immediately.
Second, it would allow some first-time farm buyers to use KiwiSaver towards the purchase of a farm held through a company, trust or partnership they majority own and control.
Under the current rules described by Federated Farmers, these arrangements can create problems even when the buyer is genuinely trying to purchase their first home or first farm.
Why service tenancies are a problem
Many rural jobs come with accommodation.
A farm worker may live in a house provided as part of their employment.
The same can apply to rural teachers, police officers, military personnel and some tourism workers.
That can put them in an unusual position.
They may want to buy their own home and use KiwiSaver towards the deposit, but they may not be ready to immediately move into that property because their job requires them to keep living in service accommodation.
Federated Farmers says the proposed change would recognise that reality.
The issue is not that these workers do not want to become homeowners.
It is that their employment arrangements can make immediate occupation impractical.
Who could benefit?
Federated Farmers says the change would have implications beyond agriculture.
People potentially affected include:
farm workers
young farmers
rural teachers
country police officers
military personnel
tourism staff
other workers living in service tenancies
Dean said these workers should have access to the same first-home withdrawal opportunities available to other KiwiSaver members.
The proposed change would allow them to purchase a home while continuing to live in employer-provided accommodation for work.
A technical rule is also affecting farm purchases
The second major issue relates to how farms are commonly purchased.
Federated Farmers says first-time farm buyers can face problems if the farm is bought through a company, trust or partnership rather than in the individual buyer’s own name.
That matters because farming businesses are often structured through companies, trusts or partnerships for operational, financial or succession reasons.
Dean described the current restriction as an impractical technicality.
“Current rules only allow it if the farm is in the buyer’s own name. That’s an impractical technicality that needs to be changed,” he said.
The proposed Bill would allow a first-time farm buyer to use KiwiSaver where the farm is purchased through an entity they majority own and control.
Why Federated Farmers is pushing now
Timing is the main issue.
With the election approaching, Parliament has limited sitting time remaining.
Federated Farmers is concerned the Bill could be left unfinished if it does not receive its first reading before the House rises.
Dean said the organisation had made KiwiSaver reform one of its 12 policy priorities for the current parliamentary term.
“The Government said they were going to make these changes, and we plan to hold them to that promise on behalf of our members,” he said.
Federated Farmers argues the first reading itself would require only a relatively small amount of parliamentary time and is urging the Government to make it a priority.
It is also calling on opposition parties to support the Bill.
Why this matters for younger farmers
For many younger farmers, buying property is already difficult.
Farm prices are high.
Deposit requirements are significant.
Interest costs can be substantial.
And many people spend years working as employees or contractors before they are in a position to buy land themselves.
KiwiSaver can become one of the few large pools of savings available to a younger buyer.
If the rules prevent those savings from being used simply because of the legal structure of the purchase, Federated Farmers argues the system is failing to reflect how modern farming businesses actually operate.
The same principle applies to rural workers who want to buy a residential property while remaining in employer accommodation.
But the change still needs scrutiny
Although the proposal is designed to remove practical barriers, it would still need careful examination at Select Committee.
Any expansion of KiwiSaver withdrawal rules raises questions about how eligibility is defined and how abuse is prevented.
For example, lawmakers would need to be satisfied that:
the buyer genuinely qualifies as a first-time farm purchaser
the company, trust or partnership is genuinely controlled by the buyer
the arrangement is not being used to access retirement savings for unrelated investment purposes
service tenancy rules are clear enough to distinguish genuine employment accommodation from ordinary rental arrangements
Those details matter because KiwiSaver is primarily a retirement savings scheme, even though first-home withdrawals are now a well-established part of the system.
The challenge is to make the rules practical without weakening the safeguards around early withdrawals.
A broader rural workforce issue
The debate also highlights a wider problem in rural employment.
Many workers live in accommodation tied directly to their job.
That arrangement can be convenient, but it can also make long-term financial planning more complicated.
Someone may be earning steadily, saving through KiwiSaver and preparing to buy a home, but their employment means they cannot immediately occupy the property they want to purchase.
That puts them at a disadvantage compared with someone doing similar work in a city who rents privately and can move into a purchased property straight away.
Federated Farmers argues the law should recognise that difference.
The political test
The Bill now becomes a test of parliamentary priorities before the election.
Federated Farmers is not asking the Government to complete the legislation before the House rises.
Its immediate request is narrower.
It wants the Bill to receive a first reading so the proposal can move to Select Committee and continue through the legislative process.
That would allow MPs, affected workers, farming organisations and the public to examine the detail.
If the Bill does not progress before Parliament rises, the process could be delayed further.
For young farmers who have already been waiting for the promised changes, that is the outcome Federated Farmers wants to avoid.
What happens next
The key question is whether the Government allocates time for the Bill’s first reading before Parliament rises for the election.
If it does, the legislation can move to Select Committee, where the detail can be tested and submissions heard.
If it does not, the proposed changes risk being pushed further into the future.
For Federated Farmers, the principle is simple.
People should not be prevented from using their KiwiSaver for a legitimate first home or first farm simply because their job comes with accommodation or because a farm is purchased through a common business structure.
The organisation says the policy has already been signalled.
Now it wants Parliament to finish the next step.
Source: Federated Farmers.