National gives 'cast iron guarantee' it won't make any changes to KiwiSaver if elected

The Government trying to quietly introduce GST onto KiwiSaver fees could be its sneakiest move yet, according to the National Party. 

Revenue Minister David Parker was forced to make a stunning U-Turn on the legislation on Wednesday after only introducing it on Tuesday. 

The changes were dubbed "a brand new tax" by experts.

Parker on Wednesday admitted the move was embarrassing but denied the Government tried to sneak the legislation through without the public knowing.

But National Party Finance spokesperson and deputy leader Nicola Willis said it was unbelievable the Government tried to push the plan through without notifying the public via a press release.

Willis described it as one of the "sneakiest" things the Labour Government has done.

"A press release went out about this Tax Bill and it did not contain the words 'KiwiSaver', and yet when we went and read the fine print, there in the regulatory impact statement was this new GST… that was going to create $225 million more in tax revenue for the Minister of Finance each year," she told AM on Thursday.

"I think that's a bit sneaky."

Willis said the legislation was collective negligence from the Government.

"It's all a bit suspicious," she said. "This isn't one guy's failure - this is the Government collectively saying, 'We're OK with putting a tax on New Zealanders' KiwiSavers.'"

While the last National Government made changes to KiwiSaver - including slapping a tax on employer contributions and ditching the $1000 kickstart - Willis ruled out making changes to it if she were Finance Minister. 

"Nope," Willis said when asked by AM host Ryan Bridge if National would touch KiwiSaver. "You have my cast iron guarantee."

Meanwhile, Business Desk investments editor Frances Cook said the Government's backtrack was a heavy blow to public trust in the KiwiSaver scheme.

"I understand where there was a case for changing the way that fees are taxed on things like managed funds in general, but your KiwiSaver? KiwiSaver's arguably already overtaxed, especially compared to other countries.

"It's not great. Usually, retirement funds are protected from taxes - you're not sticking more of them on."

Parker declined to appear for an interview with AM for a second day running on Thursday.

He said on Wednesday he believed the proposal was misrepresented.

"We would obviously have preferred that the people we thought would come out in support of this had," Parker said. "The fact that they haven't caused us to reverse our position. We think that was the right thing to do as the furore around this was denting public confidence in KiwiSaver."