Australian superannuation savings should soon be transferable to New Zealand under an agreement currently being negotiated between the two governments.
According to a spokesperson for Michael Cullen, New Zealand Finance Minister, trans-Tasman super portability was likely to come into effect within months. “It is reasonable to anticipate that ongoing work between Australian and New Zealand officials over coming months may deliver tangible gains before the end of the year,” the spokesperson said.
Cullen flagged the news in a speech to the Australia-New Zealand Leadership Forum in Wellington last month, saying the proposals “will allow the free flow of savings between the KiwiSaver Workplace Savings Scheme and Australian retirement savings accounts”.
Until the introduction of the KiwiSaver regime last year, most New Zealanders did not have individual superannuation accounts which locked in savings until age 65. According to the latest government data, over 670,000 members have now signed up to KiwiSaver accounts.
Over 450,000 New Zealanders live in Australia, the bulk of whom would have accumulated some superannuation savings. In his speech Cullen also pushed for the mutual recognition of imputation credits between Australia and New Zealand – a long-term source of friction between the two countries. “For the Single Economic Market to have benefits to both countries, and to remain relevant to business needs, we believe it makes no sense to deny imputation credits when dividends are paid across the Tasman,” he said.
Lianne Dalziel, New Zealand Commerce Minister, said the Australian government has at least agreed to reconsider the imputation tax issue. “The previous [Australian] government were not interested in talking about it. There’s not that intransigence from the Labor government,” Dalziel said.
Last week Dalziel also signed a groundbreaking deal with Nick Sherry, Australian Superannuation Minister, removing the need for most investment issuers to produce a separate disclosure document for both countries. Under the ‘Mutual recognition of securities offerings’, Australian and New Zealand providers can now use their home country prospectuses to raise money in either jurisdiction.
Dalziel said that could save issuers up to $50,000 in compliance costs and bring about “a wider choice of investment opportunities”. The agreement will also see regulators in both countries sharing more information as well as administering the mutual recognition scheme together.