New Zealand First's KiwiSaver policy is a nice idea but almost impossible to achieve, Dunedin financial adviser Peter Smith says.
NZ First leader Winston Peters wants all babies born in New Zealand to be automatically registered for a KiwiSaver account and receive a $1000 kick-start from the government.
He also wants some of those KiwiSaver accounts to be only used for tertiary education fees.
If the person did not go on to further study, the money would stay in their account to go towards their first home and retirement, he said.
Mr Smith, the principal of the Kepler Group, said it was already possible for children under the age of 17 to have a KiwiSaver account, as many parents and grandparents had already opened the accounts while acting as guardian.
They did not get the $1000 initial investment but could contribute any amount at any time.
''The idea of using KiwiSaver funds for student fees looks good but could be very messy.
"I can imagine Inland Revenue tearing their hair over trying to keep track.''
The idea of using funds for first-home buyers could be good but Mr Smith questioned where the funds were going to come from.
The amounts being added for people under 17 were small.
''I see nothing from Mr Peters stating how the accumulation for fees or house purchases can be achieved.''
The after-school jobs and birthday $20 gifts would add up to not much after 17 to 20 years.
The effect of inflation would make the purchasing power ''virtually nothing'' in today's money.
The $1000 on its own, at 5% per annum, only grew to $2292 in 17 years, he said.
From figures supplied from the University of Otago, the minimum fees were at least $5000 and the university estimated it cost about $11,000 a year to live, including rent and food, giving a total of at least $16,000.
To get a ''reasonable figure'' in today's money for a person to go to university, someone would have to save a minimum of $150 a month over the 17 years to accumulate $48,000 to start university.
Under current legislation, any young person with a KiwiSaver account was obliged to contribute unless they took a contribution holiday as they turned 17.
''Many young people get caught out with this, by having after-school or holiday jobs where the employer deducts funds into their KiwiSaver fund, resulting in less earnings than expected,'' Mr Smith said.
Massey University academic Claire Matthews said NZ First's policy was misguided.
A clear message from the public had been that changing KiwiSaver created a level of ongoing uncertainty, discouraging some people from joining and making others resentful of their required membership.
The suggested changes should not be supported for that reason alone.
''The NZ First policy has a similar flaw to the Labour Party's KiwiSaver policy in trying to achieve multiple objectives.
"The NZ First policy is arguably worse ... by trying to turn KiwiSaver into a general-purpose savings vehicle,'' Dr Matthews said.
KiwiSaver
Under current legislation, children under 17 can have a KiwiSaver account. They do not get the $1000 initial investment but can contribute any amount at any time. The funds are locked in until the child reaches retiring age but they do not get the tax incentives until they turn 17.
