superannuation

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Nat-onomics: $30 million up in flames

Written By: - Date published: 1:15 pm, April 17th, 2010 - 11 comments

Vernon Small calculates that if the Cullen Fund had continued getting its monthly contributions, rather than just the one-off $250 million the government gave in July, we would be $30 million better off by now. Predictably, the financially illiterate Key apologists are having a cry about being shown to have stuffed this one up so badly.

Restart Cullen Fund payments

Written By: - Date published: 7:17 am, April 16th, 2010 - 24 comments

It’s time for the Nats to reverse what Vernon Small (with 20/20 hindsight) has labeled the “dumb, short-sighted decision” to can contributions to the Cullen Fund. We’ve already lost $25 million and Treasury says we’ll lose billions more. If we don’t make this investment now, superannuation will become unsustainable sometime after 2030. Perhaps that’s the Nats’ aim.

Kick in guts for recesson victims

Written By: - Date published: 9:59 am, March 3rd, 2010 - 10 comments

The recession has forced tens of thousands of people out of work. There are now 276,000 jobless Kiwis. The lucky ones (only a third of the officially unemployed) can get the unemployment benefit. Now, the Government is letting inflation eat into their meager benefit payments. Benefit payments are meant to be adjusted for inflation. This […]

Shifting the centre

Written By: - Date published: 8:05 am, November 30th, 2009 - 51 comments

Well the productivity task force is reporting back today and some of their ideas have been forward released. As we expected they are a grab-bag of unpalatable, short-sighted and frankly mad measures from the loony right including putting interest back on student loans, flat tax and means testing free childcare. As the official announcement comes […]

Key & English lose us $21mil in 3 months

Written By: - Date published: 3:23 pm, November 4th, 2009 - 40 comments

Back in February, former currency speculator John Key and former Treasury adviser Bill English started talking about suspending contributions to the Cullen Fund, which was set up to help fund superannuation. ‘It’s losing so much money’, they wailed. Some people pointed out that the markets were already recovering, that investments could now be bought at […]

Exchange rates, Kiwisaver, breaking promises, & the art of doing nothing

Written By: - Date published: 2:35 pm, October 31st, 2009 - 8 comments

A range of interesting political/economic comment today in the Herald: Fran O’Sullivan joins the left-wing and groups like Federated Farmers in calling on the Key Government to sort out monetary policy. At the moment, the Reserve Bank is tasked solely with controlling inflation with interest rates as its only real tool, while the exchange is […]

John and Bill cost us $7 million in two months

Written By: - Date published: 12:00 pm, September 23rd, 2009 - 47 comments

You’ll remember that in the Budget National decided to suspend payments to the Cullen Fund, which is designed to help fund the future cost of superannuation. At the time, John Key and Bill English said we were losing money on the Fund and we couldn’t afford to borrow to put money into it. They compared […]

Nats ignored Treasury’s warnings on cancelling Cullen Fund payments

Written By: - Date published: 2:27 pm, June 27th, 2009 - 18 comments

In the newly released Budget papers Treasury acknowledges that cancelling the Cullen Fund contributions would only reduce debt by 5% (more than offset by increase in assets) and it will put our ability to pay for superannuation at risk in the long-term: While the contributions holiday component of the package helps to reduce gross debt, […]

Cullen’s two cents

Written By: - Date published: 2:24 pm, June 3rd, 2009 - 8 comments

Quite rightly, Michael Cullen has avoided getting involved in the debate over National’s starvation diet for the New Zealand Superannuation Fund, known as the Cullen Fund. As chairman of an SOE, he should keep out of partisan politics. Still, he couldn’t resist sending a subtle message. In today’s Dom there is a letter to the […]

Super projections

Written By: - Date published: 9:27 am, June 3rd, 2009 - 19 comments

I’ve had a crack at working out how much we lose by cancelling the Cullen Fund contributions according to the Treasury’s figures in the Budget. I come out with a loss of $7.5 billion by 2023. That’s a little lower than the figures Guyon Espiner was leaked, which were presumably based on more detailed modelling. […]

DPF agrees, cancelling Cullen Fund rips off NZ

Written By: - Date published: 6:46 pm, June 2nd, 2009 - 39 comments

DPF writes on the cost of cancelling contributions to the Cullen Fund: First of all, it is true that under the 11 year contributions holiday, the Super Fund in 2030 will be worth only $81 billion instead of $118 billion – a $37 billion difference….Over the 11 years 2009 to 2020, there would be $19.5 […]

Journalists not falling for Nats’ $8 billion con-job

Written By: - Date published: 4:23 pm, June 1st, 2009 - 67 comments

This part of Vernon Small’s article today deserves an extended quote: “The numbers are stark. If full payments resume in 2020, contributions will have to be more than $1b a year higher than if we continued as normal now. Even then, from 2020 till 2030 the fund will be $37b smaller than it would otherwise […]

No super contributions = worse net debt

Written By: - Date published: 7:08 pm, May 28th, 2009 - 114 comments

I’ve had a dig into Treasury’s numbers and worked out that they expect the Superannuation Fund will make a 13% return next year, falling to 11% a year by 2012. Those figures seem pretty good, not too optimistic. It’s what the Fund made in ordinary years before the crunch and bear in mind the Fund […]

What would Key the Investor do?

Written By: - Date published: 10:27 am, May 11th, 2009 - 15 comments

Here’s a question for Mr Key but you can play along too. What if you could buy into an asset that performs well usually but had a very bad year last year? Because of that bad year, the price is now at historically low levels but the outlook over the short and long term is […]

Suspending the Cullen Fund

Written By: - Date published: 8:00 am, May 5th, 2009 - 47 comments

Bill English seems set to suspend the government’s contributions to the Cullen Fund. Here’s a little-known fact, one that Bill English probably doesn’t want you to know: The Cullen Fund made money in March, the sharemarkets are rising and we’re making money on that. In fact, the Cullen Fund out-performed the market. The markets might […]

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