PRESS RELEASE
Professor Robert MacCulloch
Matthew S. Abel Chair of Macroeconomics
University of Auckland
Sir Roger Douglas
NZ Finance Minister 1984-88
Matthew S. Abel Chair of Macroeconomics
University of Auckland
Sir Roger Douglas
NZ Finance Minister 1984-88
The NZ Initiative, which is funded by our largest corporates, has attacked super savings for all. One of its former staffers is Prime Minister Luxon's Chief Policy Adviser.
Its Chair argues NZ received economic benefits from Rob Muldoon killing our fledgling compulsory savings scheme as PM in 1976. The Initiative and its Business Roundtable forerunner have for the past 40 years deliberately promoted Muldoon's unfunded Pay-As-You-Go pyramid-style retirement scheme, causing a national disaster.
What have been the costs? Half of all Kiwis retire with almost no financial savings. The typical Australian retires with half a million dollars. We now stand divided. One half is sorted with ample savings; the other half with nothing. Inequality has shot up. The worst is yet to come. An unreported $2 trillion debt mountain has been dumped on our children's shoulders. It must be paid by them. Had a private firm hidden this liability like our government, then those responsible would've gone to prison. Why not politicians and their close advisors?
What does the NZ Initiative and its political allies stand for? Making people dependent on the State by opposing them having their own million dollars worth of savings, funded by tax cuts? Today's youth, under Initiative-promoted policies, are being forced to pay for their parents and grandparents' retirement. Choice has been denied them. The only way they can escape is to leave NZ.
4 comments:
Robert i don't believe you wrote this, I didn't understand much of what you mean and there is no context around any of it. This is very different from the excellent retirement paper you wrote and published. Perhaps put another link to that aswell?
Gentlemen, Most people should be excited to see the first tranche of each years taxation go into their own IRD managed fund by IRD . Yes they have still payed their tax and the funds have not been wasted , they have been saved .
The issue that has not been reasonably explained is how the NZ Government services that our taxation paid for previously, will be replaced until the programme gains some substance .
Please advise NZ and let momentum start for an individual personal tax paid superannuation fund.
This post mischaracterises my column in the Business Herald on Thursday. The column did not oppose compulsory savings. In fact, it included the following passages:
“None of this is to deny that contributory, save-as-you-go systems have real virtues. They can strengthen personal responsibility, reduce reliance on the state, and give workers a clearer sense of ownership over their retirement income. They are also more likely to be fiscally sustainable than pay-as-you-go schemes like NZ Super. Many countries have adopted such systems for precisely these reasons.
If New Zealand were designing a scheme from scratch today, there would be a strong case for making a funded component a central pillar.”
The column’s purpose was much narrower: to correct the claim that New Zealand “lost” a trillion dollars in the 1970s, a claim that overlooks opportunity cost, the political realities of the era, and the pension system already in place.
Reasonable people will differ on retirement income policy. Debate is healthy. But it is helped by engaging with what is actually written.
In the short term, this sounds eerily like the UK Chancellor who
" asks those with broad shoulders to bear the financial burden for all the others". So the solution will be hard Left economics -i.e. redistribution of available resources without planning for productivity - bankruptsy.
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