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Paul Goldsmith wants to cut 'nice-to-have spending', including NZ Super Fund contributions, saying National 'can’t and doesn’t want to outspend Labour'

Paul Goldsmith wants to cut 'nice-to-have spending', including NZ Super Fund contributions, saying National 'can’t and doesn’t want to outspend Labour'
Paul Goldsmith. Image from National Party website.

National’s finance spokesperson Paul Goldsmith wants to suspend Crown contributions to the New Zealand Super Fund for four years.

He said in a speech on Thursday, this was “an obvious place to start” in terms of “temporarily holding back nice-to-have spending”.

“That alone would reduce core Crown debt by $9 billion over four years,” Goldsmith said.

During a select committee on May 20, Goldsmith mentioned suspending Super Fund contributions, as well as winding back government contributions to KiwiSaver members as a means of cost-cutting.

Asked by at the time whether this was in fact National Party policy, Goldsmith said, “They’re examples of things we should be thinking about in the short term.”

On Thursday, he didn’t mention cutting KiwiSaver contributions, but was more definitive about Super Fund contributions.

The National-led Government in 2009 suspended Super Fund contributions. These were resumed in 2017 when the Coalition Government came into power.  

As at May 31, the Super Fund had a 9.5% annual rate of return since inception (before tax and after costs).

Goldsmith said other spending initiatives to go under National would include the government commitment in response to Covid-19 to investing $1.1 billion to create nearly 11,000 jobs to restore the environment.

“We would free up most of that money for more useful spending,” Goldsmith said.

“The $400 million Tourism Fund is nothing but hand picking a few lucky tourism businesses, like the Bungee Jumping bailout, that make a good photo opportunity. Again, we would free up most of that money for better use.”

Goldsmith also wanted funding for first-year fees free tertiary education and KiwiBuild gone.

"The National Party can’t and doesn’t want to outspend Labour," Goldsmith said, noting he would maintain "critical health and social spending".

“Our sense is we need to demonstrate a path back below 30% [net core Crown debt to GDP], in the first instance, within a decade, give or take a few years.

"It is difficult, given the extent of the global uncertainty, to plot an exact path right now. But we would commit to setting that out clearly in our first budget.”

Treasury, in its Budget Economic and Fiscal Update released in May forecast debt to GDP reaching 54% by 2023.

Like Finance Minister Grant Robertson, Goldsmith said he wanted to reduce debt to GDP by growing the economy, not hiking taxes.

“We won’t introduce new taxes. We will adjust the income tax thresholds in our first term for inflation, and will do so regularly thereafter. We will also cancel the Auckland fuel tax and not increase fuel taxes in our first term,” Goldsmith said.

He didn't mention National’s intension to introduce congestion charging.

Goldsmith also wanted to get Treasury to play a greater role in overseeing government spending.

“I would task Treasury with substantially beefing up its core role of imposing discipline through its Regulatory Impact Statements process and cost benefit analyses. It is nowhere near assertive enough. The previous National Government had room for improvement in this area; the current Government has made a mockery of those processes.”

The Government on March 23 decided departments won’t have to provide Regulatory Impact Assessments for regulatory proposals responding directly to COVID-19, until August 31.

Goldsmith said he was prepared to spend more on infrastructure.

National will on Friday make the infrastructure announcement it was supposed to make on Tuesday when Todd Muller resigned as Leader.

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Paul Goldsmith is a hack, I like him less that Robertson lol. The author here is great. Can we just send Jenee over to sort Finance? At least she understands banking, dollar-cost-averaging, can comment on crypto/fintech, understands financial history, schools of economic thought, etc.

God knows we need more people with something between their ears in parliament. To be "fair" though, Grant Robertson has grown a lot in the portfolio. Tibshraeny as an associate Finance Minister would be fantastic!

When she acknowledges what underwrites money, I'll agree with you.

Pensions are an expectation that tomorrow will deliver. Physically. Forget the number question, as we've seen, anyone can generate numbers. The question is what, and how much of that what, the numbers can be cashed in for; tomorrow and all the following tomorrows.

I doubt anyone in the NZ govt understands crypto.

Nobody understands crypto J.C. Including crypto investors.

crypto "investors" lol. You mean speculators. To be fair the whole stockmarket is just a speculators gambling casino now, run by the central banks. Maybe temporarily suspending payments isn't such a stupid idea, at least until forward P/E ratios make sense again.


Adrian Orr should use his magical money printer to pay into the super fund.

It's a better use of currency debasement than goosing house prices.


Basically, National wants the poor to become poorer and the rich to get richer. So what's new Same old, same old. National has no imagination. Interesting that Labour has a better proposition.


It is healthy to have a society with richer people and poorer people if the richer people are generating their wealth from productive enterprise instead of rentier capitalism.

Labour and National are unfortunately two sides of the same useless coin. Both lack a vision for our country that features egalitarianism, meritocracy or a sustainable future.

It will be interesting to see if National are still keen on their vision of us becoming a Chinese vassal now that the rest of the western world is waking up to the nature of the CCP.

what if egalitarianism , meritocracy and sustainability were incompatible with each other?

That's hypothetical conjecture (they aren't). But I would say pick any two.

meritocracy and egalitarianism


Heh. Scheidel's longitudinal study shows that, since the Stone Age, inequality has been a constant feature except during periods of The Great Levellers (mass-mobilisation war, pandemics, state failure, transformative revolution). These levelling periods all have one thing in common - extreme violence wrought upon the established order and a high body count. Then, once the Levelling stops and the bodies are buried, and inexorably, inequality returns. Joel Kotkin refers to our current arrangements as neo-feudalism, and he may not be far off the mark.....So yes, AndrewJ, one can have at most 2 of them 3.......or 1.1-1.8 of 2.....

So what's your grand plan Brock? Seems you have a handle on what we shouldn't do .. how about some constructive ideas on what we should do?


I'm glad you asked Hook, although I would have thought it was bleeding obvious.

Enact policies to incentivise business creation and disincentive housing speculation. You know, like the exact opposite of what we currently do.

I wouldn't be surprised if he also withdrew the government annual contribution to Kiwisaver members.
What sort of Infrastructure is Collins going to announce today - more roading, more roading. Boring, boring.

I'm still betting that she is going to announce her resignation from the National Party.
Gotta keep the streak going.

Good one, is Nikki coming back ?

Yup Logic ..roads to kingdom come and no walking/cycling over the bridge..suck it and get into your car.

Well worth a listen;
Interview with Rod Oram talking to Heather Du-Plessis Allen regarding Nationals economic plan going forward,well worth a listen,approximately 18.40 Weds 15/07.

Goldsmith...another of those experienced types we keep hearing about from National;
Goldsmith attended Auckland Grammar School and the University of Auckland.[2] Goldsmith then worked as a press secretary and speech writer for Phil Goff (Labour), Simon Upton (National) and John Banks (then a National MP).[3] In 2000 Goldsmith became a public relations adviser and worked for Tranz Rail and the University of Auckland.[3]
Goldsmith graduated with an MA in history.[2] He has written the biographies of John Banks, Don Brash, William Gallagher, Alan Gibbs and Te Hemara Tauhia as well as a history of taxes, Puketutu Island and a history of the Fletcher Building construction company.[3]


Yep. Have mentioned before that I really don't understand what it is that Goldsmith brings to the table. He seems bereft of ideas and doesn't really provide much in the way of constructive opposition, or alternative approaches. He seems to carry himself like a banker (yes I said banker, not...) but that surely doesn't qualify him to run finances.

Not a good idea.

Goodsmith definitely sounds like he's got the go for it from his new leader to bandie about policy points.
At least this looks alittle better form the Nats in terms of direction from the shadow front bench.


Encouraging what amounts to a deficit in the nation's pension pot seems extraordinarily short sighted.

If borrowing money to invest in our nation's pension pot is a good idea why not double or treble the amount we borrow? I was taught the best way of getting the most from your money was to pay off debts before making investments. Of course if our govt has massive savings (like China??) then investment in a pension pot makes sense.

you do know they tax the super fund and have already got back a large amount, and the tax amount is far higher than any interest they pay, not only that they are getting the money from the RBNZ so in reality the loan could be forgiven or even extended forever.
i always laugh when people tell me national are the best money party, the only investment they know about is rental houses they do not have the experience, skill or knowledge of any other forms of investments


Suspending payments to the superfund doesn't reduce the govts real commitments, it just leaves them off the balance sheet for a few more years, eventually we have to catch them up. Can kicking at its finest.


Typical National.

Underinvestment in education, health, the environment, rehabilitation programs and building standards all result in bigger costs down the road and are all hallmarks of National and general right wing economic thinking.

The disregard for our environment is embarrassing;

Goldsmith said other spending initiatives to go under National would include the government commitment in response to Covid-19 to investing $1.1 billion to create nearly 11,000 jobs to restore the environment.

“We would free up most of that money for more useful spending,” Goldsmith said.

Yes I found this part of the release very concerning.


Did National not learn it's lesson from last time they suspended contributions to the Super Fund?? During one of the biggest bull runs in history no less. Such short sighted thinking once again. If you're wondering how much that decision cost us here's the data.

in that same period i made enough of the markets to pay for my house cash, and this time around have made enough to semi retire meanwhile the (money party) national stumble around with no idea


Well, this is going to sink National's small chance of winning. Winston must be happy that they are putting their feet in their mouth.
Or may be Judith knows that Goldsmith will commit harakiri soon and fade away ?

But we won’t need Super in the future, we have KiwiSaver!

super fund kicks in to fill the hole before kiwisaver comes through, but you are correct kiwisaver was designed to eventually replace the government funding retirement from the tax, plus as a bonus they have another source of income (tax on kiwisaver) in the form of offshore earnings being taxed


He's right and wrong. Even at current government bond yields, it's morally hard to argue we should be borrowing to allow NZSuper (despite good past performance) to take a one-way bet on global stock-markets. It's the classic risk vs reward trade off.
If however we continued contributing to NZSuper, with the money ring fenced to only be used to fund long term, large, hard to value NZ public infrastructure assets such as urban rail (light or heavy), large scale housing, new tolls roads, the intensification of under-utilised land e.g. into high value horticulture, sustainable water schemes etc it could be very positive for the nation.
NZSuper is one of the only sources of funding in the country that can look at investments through a 20+yr lens rather than the 3yr electoral cycle lens govts often use. Plus NZSuper doesn't need to be able to access instant liquidity/valuations as the chance of regular drawdowns are almost non-existent (unlike Kiwisaver or private equity). None of the politicians seem to get this, but harnessed properly it could be very valuable.

I rate this comment. At least one commentator or understands what we are talking about here.

The argument is maximising long run outcomes for NEW ZEALAND. Everyone is rambling on about the historic long run return of the NZ Super Fund without considering the net economic cost of that money today.
Instead they are becrying the lack of will to borrow to invest in offshore opportunities when onshore we have significant infrastructure deficits and declining levels of productivity. Currently the NZ Super Fund strategy relies on every other country increasing their productivity. It seems crazy that our idea to get rich is to clip the ticket on everyone else's gains when we could instead be focusing on domestic capital projects.

But, I guess that's the Kiwi way.

Isn't the point of the Super fund to pay for Super with its dividends? Doesn't "Investing" in NZ infrastructure e.g. roads or rail just mean that the government or taxpayers would be paying the "returns" on that "investment" through fees or PPP payments? That makes zero sense to me because it's not helping fund Super. Otherwise we already have a land transport fund that is already "investing" in infrastructure.
That's why the Canadian pension fund likes investing here- it's NZers who will end up paying for Canadian pensions.

So why can the dividends of increased labour productivity (created through smart domestic capital investment today) not 'pay' for superannuation?

You articulate it well, I'm not sure where the value in NZ Super is other than being forced saving by the nation. Two people at the RBNZ could replicate the Funds offshore stock index exposures via ETF's and save $100's millons annually in fee's and wages. The fact that many investments are long-dated and marked by the Fund themselves (or auditors, consultants) means there is little genuine visibility on performance. I also have doubts they are the right vehicle for domestic infrastructure investment.

Goldsmith seems to be taking a narrow view of finance, he is thinking about the government accounts, as he should, but these are only part of the national accounts, which is where he should be primarily focussed.
What about the current account?

Are National simply going to pursue the Labour/National/Bureaucratic Elite policy of prioritising capital inflow over goods and services outflow? Of giving priority to Foreign Banking and Housing? What about prioritising kiwi owned SME profitability, instead? You know, the productive bit of the economy that only gets lip service, despite being the only sector that creates jobs for the future and makes the country richer?

Does he understand that government borrowing from overseas entities destroys exporters' profitability by pushing up the currency? That foreign capital inflows into an advanced economy usually increase either debt or unemployment, as Michael Pettis has shown? That the NZD is a closed system, bound by the advanced mathematics of double entry bookkeeping? That every credit creates a debit?

The answer is likely that, yes, they'll continue the policies they had before of capital inflows and inflating asset prices, at the expense of many other New Zealanders present and future. They will support land speculation but not small business productivity.

No, the answer is no, he doesn't understand any of that. But I don't think any of the past 6 or 7 finance ministers (including the current one) understand that either...

Understanding how an economy works is not the role of a finance minister (apparently). It only requires the ability to extend and pretend.

To be fair, it is hard to understand. Particularly as the entire area of finance and economics is framed to encourage Banking friendly ideas and policies, the fact that they bugger the people is framed out. Thus we get deeper and deeper into debt, with no way out apparently. The way out is to create valuable stuff and valuable services that can be sold at a profit. Profitability is the key, as that allows for higher wages and investment in better machinery, creating a virtous circle of increasing productivity.

Ownership matters. Size matters. Smaller businesses have room to grow, larger ones tend to get parasitic as they reach the limits of growth. Politicians and bureaucrats suck up to the big ones, who do a very good job of promoting their interests very convincingly. SMEs are all different, they are impossible to herd and thus have no real voice.

Goldsmith is right about the useless spend projects to create nothing much. He needs to consider getting rid of 20,000 drones in Wellington, who not only cost zillions, but are destructive of wealth for the rest of us.

The "big government bad, private good" argument has been proven to be a fallacy many times, including a sterling example of how to respond to a pandemic.

my favorite is what the cost was to build under the MOW against what it now costs us to build under private enterprise, no surprise the cost have risen

Unfortunately MOW was a victim of the mood of the time. MOW built to a standard that the private sector never achieved, and let's not forget their most basic achievement of keeping the rain out of buildings, something that seems to have become a real challenge in recent decades!

What the hell is he thinking?! If anything, they should be going the other way. Particularly on Kiwisaver. The only way that we will be able to keep retirement affordable down the line is by encouraging more people into Kiwisaver and the best way to do that is with GOVT incentive. Lets follow aussies lead and turn kiwisaver into a tax shelter.

That he even mentioned cutting government contributions to Kiwisaver is concerning. There are many pragmatists who don't like the idea of Kiwisaver but joined because it just made financial sense, so I can't imagine that would be a popular move.

Nothing wrong with frontline workers. It's the Wellington drones the problem. Writing papers to each other, very busy with no outcome from it.
The latest con is Co-design. (Hold an all day meeting, including a session wandering about sticking post it notes with your idea on the wall)

I work in some govt offices at the moment. And yes there are a lot of these drones you speak of. However I seriously doubt there is 20k of them, it is probably more like one in ten to one in fifteen of all actual workers. And it does appear to have got better over the past 10 years or so. For instance in my current spot, I know of about 2 or 3 out of about 30 people I work with directly. Almost all are doing core work for their agencies that has a direct result in the real world (justice applications, statistics for the economy and treasury for economic and social policy tuning, economic development work).

The bigger problem in government is getting people to actually work, instead of taking 6h days, having every 2nd or 3rd day off due to "health issues" etc. School holidays many govt workplaces almost halve in terms of people turning up to work, at the moment the morning traffic in Wellington tells you this. If you really want to drive govt efficiency, that would be my first place to focus, making people actually show up and work their hours.

In saying this, there is a whole stack of people working in government that are working hard core, in response to COVID. I know a few who haven't had a day off in months and are working long long hours. Some of these people were the "drones" who people quickly realised weren't providing value where they were so were re-pointed to the COVID response. Suddenly they have a lot of very good and important work to do...

In an emergency, you actually want latent capacity in your public service. It's much like how people are now realising that super efficient JIT warehousing systems are hopeless in a crisis as the spare capacity that was previously thought of as "waste", quickly becomes emergency supplies. Same with workers in government.

National always claim they are about financial responsibility but then they do a press release doing the opposite. The Superfund has been the best investment made by the Government.

Goldsmith is not cut out to be a Finance Minister.

'Save' budget costs on one of the few budget items that actually produces a massively positive return long term?? Its a fundamentally flawed idea...
These guys don't understand investment basics, for every $1 we give the Super Fund, it will likely return $20 in the future

Any person with half a brain will know that the population is aging, life expectancy is outstripping any current retirement savings by a huge margin and we need increased retirement savings, not less....

If the super fund is returning 9.25% p.a. and paying annual tax on the earnings in 20 years it will pay the govt back that $1 purely in tax,
.....and also increase the value of that original $1 up to $3.51 which continues to grow

This excludes the actual impact of investing that money into the real economy in order to grow it, i.e. funding businesses providing jobs in the productive sector

This is investing in something bigger than simply paying actual expenses in other budget areas which ultimately end up with the original $1 being worth $0 at the end of the financial year

I've just started receiving my super, and am grateful for it. It doesn't amount to much but as I age & my savings dwindle, I'm sure it will become more important. I'd like to see the NZG develop a token system for all beneficiaries. Part cash & part supermarket (mainly) tokens (no booze or cigies allowed). What chance?
I don't have a problem of National stopping govt contributions to the super fund, but no tax as well.
As for the rising price of housing underwriting our feeling of wealth, that's pretty standard world wide & comes about because most people can't create wealth. Most people can only be a small part of the very few who have the ideas & the balls to carry them out, which I estimate to be 1 in 10. Therefore 90% of the people can only get by by working for others, so their life's potential wealth is both limited & concentrated, you guessed it, mainly in their homes. Sigh.

I'd like to see the NZG develop a token system for all beneficiaries.

I assume when you say "all beneficiaries" you do include superannuation in that as well, of course, since it makes up over half of the total benefit spend.

"That alone would reduce core Crown debt by $9 billion over four years,” Goldsmith said."

It wouldn't reduce net debt 1 cent though would it. The $9b of debt is balanced by $9b of superfund investments.

In the longterm suspending payments would be very detrimental to Crown debt. If we don't have the SuperFund, how, other than more debt, are we going to fund the boomers Super payments?

This is all a bit depressing, all we are seeing is the Nat's regurgitating the same tired old ways of their recent do nothing decade.

“I would task Treasury with substantially beefing up its core role of imposing discipline through its Regulatory Impact Statements process and cost benefit analyses. It is nowhere near assertive enough. The previous National Government had room for improvement in this area; the current Government has made a mockery of those processes.”

Fine, but it also needs to be imposed on local government.