The Pacific money dilemma: Survive today or save for tomorrow?

As election-year economic promises ramp up, Pacific families are weighing two competing visions of financial security: save more for retirement under National’s KiwiSaver overhaul, or keep more money in the weekly pay packet under the Greens’ tax plan.

Over the weekend, National unveiled major KiwiSaver changes, while the Greens announced a tax package aimed at easing cost-of-living pressure.

Victoria Ongolea, Pasifika financial wellbeing advocate, says the reality for Pacific households is more complex.

“For some, it will be beneficial, but for some, it will be harmful,” she tells PMN News.

Ongolea says families already stretched by low wages, casual work and wider family obligations may struggle with higher compulsory KiwiSaver contributions, even if the long-term benefits are clear.

“Sometimes it’s a short-term pain for long-term gain.”

Watch Marama Davidson's full interview below.

National’s KiwiSaver package would make contributions compulsory for all workers from July 2028 and gradually lift default contribution rates to a combined 12 per cent by 2032, matching Australia.

But economists warn compulsory contributions could squeeze low-income households.

Shamubeel Eaqub, chief economist at Simplicity, says workers on lower incomes may struggle to absorb reduced take-home pay.

Families will decide whether to vote for a party that promises long term savings or short term tax relief. Photo/File

“For the bottom 60 per cent of incomes, they are going to struggle if they have less take-home pay,” he told RNZ.

That concern may be especially relevant for Pacific families. Stats NZ figures show Pacific households had the lowest average annual disposable income among the largest ethnic groups at $51,483, compared with $67,585 for European households.

The package also includes a $1500 “Baby Boost,” automatic enrolment at birth, parental leave KiwiSaver top-ups, and employer contributions for workers over 65.

Agnes Loheni, former National MP and Waitākere candidate, says National’s Baby Boost reflects what many Pacific parents want.

“As a mother of five, I know every parent wants to give their children the best possible start.”

Under the Greens' tax policy, those earning less than $40,000 per year would be $27 better off each week. Photo/File

The parental leave KiwiSaver top-up could particularly benefit women, who retire with less savings than men.

Te Ara Ahunga Ora Retirement Commission says women have KiwiSaver balances 24 per cent lower than men, a gap of about $9240.

Pacific women continue to have larger families on average, 2.03 births per woman compared with 1.56 for European women. National estimates a mother with two children could gain an extra $15,000 in KiwiSaver by retirement.

Elle Wuthrich, Pacific financial adviser, says it’s important for women to save and be more aggressive in their investments.

“A lot of women end up taking time out of the workforce to have children, but also in our culture, it’s quite common for us to take time out to look after elderly parents,” she says in an earlier interview.

While National is focused on long-term savings, the Green Party is pitching immediate relief through a tax-free threshold on the first $10,000 earned, alongside higher taxes on top earners, wealth and large corporations.

Marama Davidson, Green Party co-leader, says their tax policy was designed with low-income families in mind.

“We’re thinking of South Auckland school students who are working 30 - 50 hours a week, often night shifts, to help their whanau pay the bills instead of being able to focus on their schoolwork,” she tells Pacific Mornings. “The kuia who cares for her very sick husband and cannot often afford the transport costs to get him to his life-saving treatment.”

As parties sharpen their election pitches, Pacific voters may increasingly judge policies by a simpler measure: which promises make everyday life more affordable while still protecting the future.