NZS is a simple, universal scheme. This means it has low transaction costs and generates few behavioural distortions.
Pension payments are often seen as costs to the economy. However, pensioners do spend their pensions – thousands of jobs depend on this! Pensioners also deliver extensive services outside a market framework. Examples include looking after grandchildren, augmenting health, education and other social services, and contributing to democracy and civil society.
New Zealand has long had low domestic savings rates, and this favours the non-tradable over the tradeable sectors. Much of this imbalance reflects the decision to repeal the 1974 “Kirk scheme” with its strong compulsory element and replace it with Muldoon’s “pay as you go” scheme set in place from1975.
We need to address the contribution compulsory savings schemes can have on economic development.
Compulsory savings schemes such as KiwiSaver accumulate savings that are then invested in, for example, housing and in wealth-creating businesses and infrastructure.
KiwiSaver investments may include start-up businesses, New Zealand businesses’ growth into international markets, and capital deepening. In aggregate these investments could become big enough to rebalance the economy from the non-tradeable sector such as housing to the export-orientated sector. This includes knowledge-intensive manufacturing and services businesses which give rise to new sources of wealth.
Were KiwiSaver compulsory, with the contribution rates set at a higher level, then aggregate savings and investment would start to look more like those of a more highly developed economy. The Harvard Atlas of Economic Complexity provides insights into the relationship between a country’s prosperity and the sophistication of its export mix.
The debate over age of eligibility for pensions has been linked to life expectancy. This expectancy is linked to socio-economic and lifestyle factors such as diet, smoking and housing quality.
There is potential for the health and wellbeing sector to work more effectively in keeping people with chronic and other health and disability issues engaged in the economy and society.
It is insightful to muse on the relationships between sociology and biomedicine when longevity has enormous financial as well as wellbeing implications. An example is sarcopenia, the age-related progressive loss of muscle mass, especially in the legs. It typically impacts from about age 60 but can start much earlier. It is associated with health issues such as loss of strength, stability and independence, with diabetes and with cognitive impairment.
Success in its treatment seems within our grasp, however it does not seem to offer many lucrative patentable drug opportunities. Much basic science needed to make progress with sarcopenia is known, however many scientists and clinicians struggle to integrate different disciplines needed for practical clinical solutions.
However, these solutions are emerging, and AI is becoming a more precise tool with massive computational power. Such are the opportunities when hard science meets hard sociological challenges, and life for many becomes more productive and longer.
Dr Peter Winsley has worked in policy and economics-related fields in New Zealand for many years. With qualifications and publications in economics, management and literature. Peter blogs at Peter Winsley - where this article was sourced.
New Zealand has long had low domestic savings rates, and this favours the non-tradable over the tradeable sectors. Much of this imbalance reflects the decision to repeal the 1974 “Kirk scheme” with its strong compulsory element and replace it with Muldoon’s “pay as you go” scheme set in place from1975.
We need to address the contribution compulsory savings schemes can have on economic development.
Compulsory savings schemes such as KiwiSaver accumulate savings that are then invested in, for example, housing and in wealth-creating businesses and infrastructure.
KiwiSaver investments may include start-up businesses, New Zealand businesses’ growth into international markets, and capital deepening. In aggregate these investments could become big enough to rebalance the economy from the non-tradeable sector such as housing to the export-orientated sector. This includes knowledge-intensive manufacturing and services businesses which give rise to new sources of wealth.
Were KiwiSaver compulsory, with the contribution rates set at a higher level, then aggregate savings and investment would start to look more like those of a more highly developed economy. The Harvard Atlas of Economic Complexity provides insights into the relationship between a country’s prosperity and the sophistication of its export mix.
The debate over age of eligibility for pensions has been linked to life expectancy. This expectancy is linked to socio-economic and lifestyle factors such as diet, smoking and housing quality.
There is potential for the health and wellbeing sector to work more effectively in keeping people with chronic and other health and disability issues engaged in the economy and society.
It is insightful to muse on the relationships between sociology and biomedicine when longevity has enormous financial as well as wellbeing implications. An example is sarcopenia, the age-related progressive loss of muscle mass, especially in the legs. It typically impacts from about age 60 but can start much earlier. It is associated with health issues such as loss of strength, stability and independence, with diabetes and with cognitive impairment.
Success in its treatment seems within our grasp, however it does not seem to offer many lucrative patentable drug opportunities. Much basic science needed to make progress with sarcopenia is known, however many scientists and clinicians struggle to integrate different disciplines needed for practical clinical solutions.
However, these solutions are emerging, and AI is becoming a more precise tool with massive computational power. Such are the opportunities when hard science meets hard sociological challenges, and life for many becomes more productive and longer.
Dr Peter Winsley has worked in policy and economics-related fields in New Zealand for many years. With qualifications and publications in economics, management and literature. Peter blogs at Peter Winsley - where this article was sourced.
2 comments:
Dr Winsley. There is plenty of money for NZ super. Plenty for decades to come. Let me explain.
Unfortunately this country likes to front load benefit payments , and in particular with arderns lot, even encouraged kids out of school and onto a waiting benefit. They then decided to increase the benefit so these parasites could live a great life without having to contribute. That's the lefts vision for a great NZ.
Rather than front load, WHAT IF (2 great words, what if) all those that can work were made to contribute while they could? The dole money is shifted to the pensioners. Simple!
The left will be absolutely furious at such a suggestion......it goes against their ethos trying to make everyone the same as the lowest common denominator ( and in this country that's a really, really low bar), but I know it would work as everything the left puts forward never works, so im definitely on the right path. :)
Well said, Peter. Particularly intriguing is the potential for the health sector to help people with chronic health and disability issues to remain engaged in the economy and society. Let's hope for good things to emerge in that space. David Lillis
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