Then enter Winston who wants it as well, and will pay for it, apparently with tax cuts.
Of course the tax cuts are completely unaffordable, but it doesn’t make the compulsion a bad idea.
I personally am not for compulsion, but it seems the only way to solve our never-ending inability to save.
Here is what possibly is the defining argument: a bloke called John O'Malley, who works for Deloitte, has written a paper on creditor and debtor nations.
That is when you take all of a country's financial dealings with the world and work out who owes what.
Places like Germany and Japan and Switzerland are what they call "creditor nations". They are owed money.
The debtor nations owe the money. It will not surprise you that New Zealand is a debtor nation.
Australia, which is where the paper originated, is what they call a "switcher nation". In other words, Australia has been a debtor, but the numbers have reversed dramatically. Net foreign liabilities have gone from 63% of GDP in 2016 to 32%, to now 24%.
If it keeps going, you're a creditor nation.
How have they done this? Well, it's through a number of things because economies are complex, but no small contributor has been superannuation.
Former Labor Treasurer Paul Keating introduced compulsion in 1992 from employee and employer, and they have never looked back.
Yes, they had the usual arguments – it cuts into pay rises, it's unaffordable, etc. But 30-something years later the proof is in the numbers. We have an average KiwiSaver of $30,000-ish. They have an average of $130,000-ish.
Recently, for the first time, they could say a person starting work and working for 40 years on an average salary could look forward to retiring in comfort.
So, a problem solved. They don’t debate retirement and its cost, and the wealth created makes them on the verge of being a creditor nation, joining the heavyweights like Japan and Germany and Switzerland.
So New Zealand or Australia? Who would you rather be?
Mike Hosking is a New Zealand television and radio broadcaster. He currently hosts The Mike Hosking Breakfast show on NewstalkZB on weekday mornings - where this article was sourced.
Here is what possibly is the defining argument: a bloke called John O'Malley, who works for Deloitte, has written a paper on creditor and debtor nations.
That is when you take all of a country's financial dealings with the world and work out who owes what.
Places like Germany and Japan and Switzerland are what they call "creditor nations". They are owed money.
The debtor nations owe the money. It will not surprise you that New Zealand is a debtor nation.
Australia, which is where the paper originated, is what they call a "switcher nation". In other words, Australia has been a debtor, but the numbers have reversed dramatically. Net foreign liabilities have gone from 63% of GDP in 2016 to 32%, to now 24%.
If it keeps going, you're a creditor nation.
How have they done this? Well, it's through a number of things because economies are complex, but no small contributor has been superannuation.
Former Labor Treasurer Paul Keating introduced compulsion in 1992 from employee and employer, and they have never looked back.
Yes, they had the usual arguments – it cuts into pay rises, it's unaffordable, etc. But 30-something years later the proof is in the numbers. We have an average KiwiSaver of $30,000-ish. They have an average of $130,000-ish.
Recently, for the first time, they could say a person starting work and working for 40 years on an average salary could look forward to retiring in comfort.
So, a problem solved. They don’t debate retirement and its cost, and the wealth created makes them on the verge of being a creditor nation, joining the heavyweights like Japan and Germany and Switzerland.
So New Zealand or Australia? Who would you rather be?
Mike Hosking is a New Zealand television and radio broadcaster. He currently hosts The Mike Hosking Breakfast show on NewstalkZB on weekday mornings - where this article was sourced.
4 comments:
1. set SUPA to end in 40yrs
2. make Kiwisave compulsary 2 5/5% contributor/employer of gross
3. rising 1% a year for 5yrs so 10/10% of gross
4. no early pull outs only retirement 50+
5. no using it as a financial base for loans.
6. stop parliament fiddling with it, esp National/ACT
end SUPA in 40yrs everyone today can sort a private scheme on top of Kiwisaver
MikeNZ
get rid of SUPA in 40yrs on a %slide based on age.
those older get bigger % and 20yr olds get 0%
- Kiwisaver compulsory 5%/%5 contributors /Employers
parliament not aloud to fiddle with it. (note National/ACT willtry).
- only take out on retirement 50+
- no using K/S as a financial instrament (as surity)
- Kiwisaver Increase contributions 1% a yr for 5 yrs to 10%/10%
-Voluntary increase after that.
This is a long term retirement funding for ordinary people.
How can Kiwisaver money be protected from an avaricious Minister of Finance with an addiction to spending?
Its a good idea and has been for 50 years. However we are nation of beneficiaries with less taxpayers to support the increasing number, so should we be taking a portion of those benefits and putting that money into beneficiary accounts as well. I say yes and at double the rate.
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