‘Ultimately, it’s my money’: Chris Hipkins defends using taxpayer-funded private super scheme for holiday home
Labour leader Chris Hipkins. Photo / Mark Mitchell
Labour leader Chris Hipkins has defended using a generous publicly funded private superannuation scheme to pay off the mortgage of his family holiday home.
“Ultimately, it’s my money,” Hiphins said.
As an MP, Hipkins benefits from MPs’ superannuation entitlements. For every dollar of their salaries MPs pay towards their schemes, the taxpayer matches this with a contribution of $2.50, although the contribution is capped at 20% of an ordinary MPs’ salary – which works out as $36,240 as of June 1.
Hipkins confirmed he pays the maximum contribution, but he also contributes to KiwiSaver, meaning the full amount of contribution will not be paid towards the super scheme that owns his home.
MPs are allowed to direct these savings into private superannuation funds, which Hipkins has done.
These private schemes often own property, like second homes in Wellington or holiday homes. MPs can use the homes that are owned by their superannuation schemes. Melissa Lee, Jenny Salesa, Erica Stanford and Judith Collins declared similar schemes in the most recent register of pecuniary interests.
Hipkins confirmed in a media conference today that contributions to the superannuation scheme can be used to pay the mortgage on his holiday home.
“It’s a savings scheme, so yes it can be. It’s just the same as you contribute to a managed fund, for example,” he said.
“Ultimately, it’s my money, it’s my retirement savings so I am investing my retirement savings.”
Hipkins did not appear to think that funnelling a portion of his retirement savings, plus taxpayer contributions, into the home was inconsistent with Labour’s policy of wanting to pivot savings towards highly productive investment.
In his State of the Nation speech earlier this year, Hipkins said “for too long, too much capital has been locked up in housing speculation – driving up prices, while businesses struggle to find the investment they need to grow”.
“This is a holiday home that my family has owned for about 40 years. I feel very fortunate that I am in a position where I can have a holiday home, and I don’t begrudge any other New Zealanders who have that,” he said.
“I think that is a different argument to that we sort of have a default setting in New Zealand where people own lots of rental properties.That has been sort of a default, and a reliable investment for a lot of families and they have gone into that market with all of the right intentions. But we do need to tilt the playing field away from that.”
Hipkins’ pecuniary interests have declared the ownership of a second property in Raumati, a popular holiday area north of Wellington, which is owned by a superannuation trust.
He has declared a property in Raumati since he became an MP, although it is not clear it is the same property – his first declaration said it was a rental. In his 2013 register of interests, the existence of the private retirement scheme was registered for the first time.
The private retirement scheme is named after the street on which the holiday home is situated, suggesting the scheme and the house have a strong association.
Hipkins would not say whether the contributions to MPs’ super schemes were fair.
“I would like more of a focus on retirement savings for all New Zealanders. And there is certainly more opportunity for us to do more in that space,” he said.
He would not say whether employer contributions should rise to the level enjoyed by MPs.
“In an ideal world, employer contribution rates would be higher,” Hipkins said.
“I am not making that commitment but I would like to see higher retirement savings rates. The salaries that Members of Parliament get are high by the standards of everyday New Zealanders,” he said.