Bernard Hickey details the key news overnight in 90 seconds at 9 am in asscociation with BNZ, including Prime Minister John Key's confirmation of a pensions working group to consider a compulsory KiwiSaver scheme.
Key told a post-cabinet news conference he was open to the idea of a compulsory KiwiSaver scheme, but said he supported the current universal New Zealand Superannuation scheme.
He said New Zealand had a savings problem and too much foreign debt.
He noted any scheme would have to be 'Kiwi-skewed' one, referring to the problem currently where 75% of Cullen fund and KiwiSaver money is invested overseas, despite our own savings and capital shortage. Your view? Comments below please.
Meanwhile, United Future leader Peter Dunne has introduced an income splitting bill to parliament and has the agreement of the government to get it past a first reading and then have it considered by a select committee.
But the cost of income splitting is estimated at NZ$450 million and it is accused of benefiting rich families more than anyone else. Your view? Comments below please.
Meanwhile, Japanese GDP grew at an annualised rate of just 0.4% in the June quarter, well below the 2.3% forecast by economists.
This worsened fears about a global economic slowdown and triggered moves into safe haves such as (ironically) the Japanese yen and the US dollar.
The New Zealand dollar briefly dipped below 70 USc after the Japanese GDP figures.
The US 10 year Treasury bond yield fell to a 16 month low of 2.58% on the global growth fears and worries about impending deflation.
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24 Comments
All good stuff BH but we have a cracka from Labour ....." Mrs King said that since going into Opposition, Labour had done a lot of work on inter-generational welfare dependence. "You have got to put a big emphasis on teen parenting and teenage pregnancies. That is where the inter-generational stuff starts."....great isn't it....WHY didn't Labour make a start on this 0ver 10 years ago!
Welfare is a vote winner .. why would Labour want to change it when they were the ruling party?
You're on to it MattS....but it makes for great sliced pork and promises to bring them many votes from fatheads...and if the incompetents get back in, we can expect a raft of measures designed to boost future Labour support.....and we know what that will mean!
i liked you better when you were a real Wally...but i guess you still are judging by some of your posts?
The problem with an overabundance of government employees is not that they "pretend" to work, but they actually LOOK for things to do.
Showerhead rules, a resource consent regime that's anal to the max... ...you know of more examples than I can list.
Given also not that they're not the sharpest knives in the drawer, they'll come up with regulations such as restricting travel in bus lanes to 50 metres before an intersection, but don't think through the consequences of a general inability of the driving population to accurately estimate that distance.
The solution can only be to identify areas where there's a resource shortage to address a proven need or where valued-added can be generated with more resources and move pencil-pushers there with a rigorous performance (results)-based remuneration.
Exactly the sort of thing I used to do in the private sector, come to rhink of it....
+ 1000. Well said Fred !!
Rob you old coot...help us all out Rob...tell us why King and Co had to wait until they were booted out for incompetence before they got round to doing " a lot of work on inter-generational welfare dependence".....
While you're at it Rob...see if you can dig up the data on the economic cost of the inter-generational welfare....!
They have a lot of time on their hands now....I mean they are not riding around in limos' screwing up the country at our expense...
regards
"He said New Zealand had a savings problem and too much foreign debt"......haaaaahahaha...what a bloody joke....it's like yelling up at a skydiver soon to impact the ground at terminal velocity..." you have a problemmmmm.....you forgot your parachuuuuu...........bugger"
RE income splitting...
Much better than the current situation;
When the govt gives: based on a couple
But when the govt takes: based on individual
Yep, that sounds fair ..
It doesn't sound like a bad idea although then it'd hardly be fair to single people on high income? I suppose that'd be a good incentive not to remain single LOL.
Neither major party has a clue, and if they did, they'd be voted out by a selfish majority of hip-pockets. The single exception may be David Parker.
I'd been hopeful that the Greens might have put 2 and 2 together, but theyre just drifting into race and socialism.
Wayne Lochore has put it very well - someone has to come up with a better way, fiscally. Ethical investment will be part of that, legislation against sponging/piggybacking/leaching might be a part of it, and the Arab concept of loaning without interest absolutely has to be part of it. We also have to account properly for 'natural capital', which we have never done.
Seriously, though, no system (not even mass voluntary/goodwill/unpaid) maintains 9 billion people on the planet in 2050, given the stage of depletion we 7 billion have already achieved. The most likely scenario is a systemic failure, slow domino style, as every failure is addressed individually. The chances of 'putting out the fire with gasoline', or 'the old woman swallowing the fly', are high. In any case, social stress will probably negate a big-picture strategic approach, as will the part of society wired to off-load responsibility to beliefs/ religions - be they secular or 'the free market'.
The Greenland Norse (Jared Diamond / Collapse) eventually chose to chew the uncooked hoof-bones of next-year's herd. They knew they wouldn't have a herd if they did so, and knew they'd run out of firewood. I doubt they'd have voted for a party which told them they were stuffed, though. They died out with stained-glass, finery, and coin in hand.The debt that mattered, was in natural capital. Any between them became irrelevant.
We're slow learners.
Re: Green's, yes I agree, I joined/supported the party for a while until I could clearly see the Green aspect is a hollow shell filled by left wing socialities who really dont have a clue or interest. For me being green and being far right or left wing are fundimentally exclusive, ppl can only be one thing or the other they are to far from being moderates for that to work...
ie you cant change the way we do things to a more green economy without some hardship...or impact on workers, and they dont want to change and they will fight it tooth and nail until economic conditions or nature does it for them. This luxury is about run out IMHO....
regards
My concern with compulsory saving is three fold,
1) Where does our money get invested....there have been enough comments that the various funds are not investing enough of a % in NZ but offshore...So my first concern is, is this just a back door tax that the govn of the day re-directs at will or is it really a pension scheme who's aim is to better the members the most?.....I suspect it will become the former...it will end up being a subsidy tax on the lower and middle income earners to business NZ...ie regressive.
2) Net gain....at present I am over-paying on my mortgage, it gives me a solid return to pay down debt I cannot lose by, a compulsory savings scheme would probably force me to stop doing that and expose me to risk I dont want and a lower return...
3) Incompetance of fund managers, personally I think I do a better job at less cost...I buy the shares I think are going to do well and I sell them when I think not at my own pace....
Bearing in mind the second Great Depression is at our doorstep I really object to the Govn taking more of my money away to give to losers to give out to other losers.
So bearing in mind the above three points I and others could actually be worse off by the time I retire with a compulsory scheme.
regards.
Quite right Steven, this is more herding by big government, big finance and big business.
So 18% (in Australia) of earnings is forcibly directed into someone else's "care" no matter if I would be better off paying down a mortgage , buying gold or using it to start a business. All directed by the full force of the law. Is this really necessary?
They had some spiv on TV the other day saying what a wonderful thing it would be for the country blah blah blah, turns out surprise surprise,he's a fund manager. Practically drooling at the prospect he was.
Want folk to save more, just stop stealing from them by inflation.
I can understand what they are trying to do, I think a compulsory scheme of some sort has merit....the biggest problem for me is they will screw it up...some ppl will be thankful they were forced to save, others hacked off because they are worse off at the end then if they had done their own thing.
Fund managers are a pox IMHO...they are barely competant (with a few exceptions) and consider they deserve fat fees whether they win or lose your money...Ive lost enough with the a*holes that I want nothing from them.
regards
Cleaning up the financial industry would be a start, but they decided not to do that in 1987....to many vested interests.
I do think the pension industry is one huge con (there are some exceptions).....they do nothing a reasonably switched on individual cannot do themselves IMHO...and when the individual does it they are exposed to the risk....with a fund you have no idea on the risk they are taking....until you lose your shirt... Effectively your retirements is close to one of the biggest financial commitments / outcomes you take on, and ppl seem ignorant of its workings.
regards
this is a relevant read, Steven:
http://theautomaticearth.blogspot.com/2010/08/august-16-2010-deflation-…
he puts it very well.
Thanks the Guardian's poll in that is interesting, here's me thinking Im probably in the minority on the doom and gloom front but 75% of the ppl polled also think we have a tough time ahead....shows how out of touch or maybes its out of care the Pollies are with the real world me thinks. NZers I suspect might still be the other way around, we have not really been bitten yet...hardly a scratch really.....yet.
As for the article Im trying to save and get rid of debt as fast as I can, and no way am I taking on more, its totally rational to my mind and seems rational behaviour as noted in the piece...I suspect in a few years we will indeed be seeing pay cuts, or loss of jobs and when you take a new job on thats at a lot lower wage....Im lucky my debt is low I can survive some pay cutting...but then of course I wont be able to pay down debt as fast...others with huge mortgages cant....
So you can understand the fear Pollies have of deflation, but really they have not seen it in their lifetimes but they have seen inflation....so they are more afriad of inflation despite what the data is telling them....Why? I suspect because the financial system has crippled and now owns the real economy and the Pollies so what the banksters says goes...and they want others to suffer because their bonuses / returns are not big enough...I seem to recall someone saying if they dont have bread well let them eat cake....it didnt end well for her either.
Every day I wonder why the Pollies who are meant to be leaders and have vison are so blinkered....why they refuse to consider the effects of Peak oil and do nothing or worse encourage expansion....and on top of that refuse to accept the science behind AGW....because its breaks their lifestyle expectations and those of their constituancy....hello the brick wall of reality....
regards
Good article PDK, thanks for the link. I like the fact that he highlights the important connection between money supply and inflation and deflation.. Inflation is simply the increase in money supply and deflation is the decrease in money supply. He also nicely points out that money supply is all debt.
If you apply the principles in the article to the NZ situation, since our own measure of money supply M3 (debt backed money supply of $204 Billion) is declining, it can be concluded that NZ is in deflation. (People in NZ are doing the sensible thing and paying back debt, and saving rather than spending).
However according to Austrian economic theory, a central bank should LOWER interest rates to ward of deflation and re-stimulate inflation (more business borrowing). Begs the question; what the hell is Bollard up too then?
Not only Kiwisaver but other managed funds would be great.
Does income splitting necessitate more accountants / tax planners / civil serpent bureaucrats to over-see the whole she-bang ?
Ain't we got enuff of them already , milking the system , thanks to Michael Cullen's incessant tinkering ( 1999-2008 ) with the fiscal levers .
your name - perhaps you should divulge your name.
just out of interest.
Wednesday Bailout here we come:
"The taxpayer may be tapped to help prop up South Canterbury Finance in a $750 million recapitalisation plan involving overseas…" herald story
Do I remember BH suggesting this was on the cards!......
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