The FSC has launched a website and is running a campaign backed by Age Concern, Consumer NZ and the Taxpayers’ Union.

It aims to highlight and change what are described as some of the highest taxes on retirement savings to be found anywhere in the world.

The campaign says long-term savers, like those in KiwiSaver, are losing about half their KiwiSaver earnings to the impact of tax. It also claims people with term deposits are being over-taxed.

But Graeme Tee, of Private Asset Management, said it was not the place of the FSC to launch such a campaign. “They are a lobby group lobbying for their members.”

He said the campaign was a distraction from the issue of fees, which would have a much bigger impact on long-term savings than tax.  “FSC members are all out saying the same thing, go for higher-risk funds, pay more fees. You’ve got to ask if that’s a sensible thing… this [campaign] is taking the heat off fees, who’s that benefitting?”

Barry Read, of IDS Ltd, said the aims of the campaign were good but the FSC was the wrong body to drive it. “It’s people who provide these products starting a campaign to say we should lower the tax so more people use the product, it’s coming from the wrong source.”

He said few investors gave much thought to the tax they paid on their savings. “This is more an industry issue.”

Chris Douglas, of research house Morningstar, said the tax system for managed funds in this country was not punitive by international standards. “But it’s always trying to push for these things.”