Closing arguments

Written By: - Date published: 4:07 pm, November 2nd, 2008 - 58 comments
Categories: election 2008 - Tags:

Six days to go. Here are the five big issues that I am finding can turn swing voters to the Left. There are others as well (see our Standard line series) but these have been effective points in my experience. Over the next few days, you’re bound to find yourself talking to people who are planning to vote National or ACT. Try out these arguments on them

ACC. The fact that ACC is so widely used, there are a million claims a year, makes it an important issue. Despite its faults, ACC is a world-leading system and people depend on it. Labour wants to cut its cost, reducing car registration by $80 and employer levies by 20%. National wants to privatise it. Private insurers can collapse and have every incentive to avoid payouts. Nobody wants ACC privatised, not business, not the medical profession, not legal experts, and, most importantly, not ordinary people. Nowadays, when I hear someone is going to vote National or ACT, I just mention they want to privatise ACC and it’s usually enough to switch them to the Left. Why Labour hasn’t made more of this, I don’t know.

Kiwisaver. 850,000 people have joined Kiwisaver so far, and that number will soon reach one million. Chances are good a swinger voter you talk to is either in Kiwisaver, close to someone who is, or planning to join. If National gets into government, every Kiwisaver would be worse-off, even after you count National’s tax-cuts, because they’re going to cut Kiwisaver in half. Rather than your employer putting in the equivalent of an extra 4% of your income into your Kiwisaver, National would reduce that to 2%. That will cost every Kiwisaver hundreds of thousands of dollars over their career. By cutting Kiwisaver, National would also cut domestic saving, meaning we have to borrow more from overseas.

Tax. National’s tax cuts are less than $10 a week more than Labour’s for most people. Many people actually get smaller cuts from National – if your income is less than $24,000 or $44,000 if you get Working for Families, you get larger cuts from Labour. The only people who get big cuts from National are people like John Key on really large incomes.

Trust. After all these years, the only ‘trust’ issues they have on Clark is that she once signed a picture for charity that she hadn’t painted, her drivers drove really fast one time, and her billboard picture is ‘too nice’. These are not substantive issues, they have no bearing on whether someone can be trusted to govern. National tries to hide its policies, its senior MPs have been caught out revealing a secret genda, and some senior MPs have broken Parliaments rules. They have a track record in government of low growth, high unemployment, lower wages, higher crime, and running down public services like health and education. National always has been and remains the party of the wealthy; they cannot be trusted to act in the interests of ordinary Kiwis.

Experience. Key’s business experience is not an asset in the current economic conditions. He has no experience running an economy. In fact, his economic experience is making money doing exactly the kind of deals that have led to this financial meltdown in the first place. One of the guys who got us into this mess is not the kind of person to lead us out of it. In Clark, Cullen, and the other senior ministers, we have a very experienced team with a record of low unemployment, high wages, high growth, and stable government.

58 comments on “Closing arguments”

  1. paw prick 1

    hmm Trust??
    800,000 pledge card,
    EFA
    Owen Glen,
    Condoning Winston peters lies
    December mini budget (why not now)
    Wasting OUR money on muckracking and smear (did HC know about that or not??)
    Cash for passports with Shane Jones etc.
    Shall i go on……..

    pull the other one ………..it plays jingle bells

    [lprent: Classing this as a probable flamer troll from subsequent comments, I’ll leave a note on the latest comment.]

  2. paw prick, more like poor prick. You’re going to be feeling pretty raw when Labour wins the election now aren’t you “bro”.

  3. John 3

    You forgot the lie about who paid for Mike Williams’ trip under trust.
    Vote Greens for socialism with integrity.
    Why does Labour have to be the majority left wing party?
    All governments fade and Labour are showing intellectual fatigue.

  4. higherstandard 4

    Closing arguments – more like the usual half truths and smears.

    John

    How can I take the greens seriously when in the mailbox today I get their beautiful pamphlet plus their local candidates flier encouraging me to vote for them…..

    “Party vote Green to preserve our North Shore coastline from Global Warming sea level rises. We have the long term strategies needed to reverse this disaster”

  5. Quoth the Raven 5

    HS – Argue the points or take it back to kiwiblog.You are the worst of the trolls. Where’s D4J at least he was entertaining.

  6. paw prick 6

    Very weak response!
    And yes I am poor because Labour take the export dollars I earn to subsidise people like you.
    ps Im not your bro

    [lprent: I’m flagging you as a probable flamer troll from your comments. Nothing said of any major import, looks like it comes out of a troll phrasebook, and shows a distinct lack of thought. Look at Policy and lift your standard.]

  7. higherstandard 7

    QTR

    Privatising ACC – this is a lie, introduction of competition into one part of ACC is what is planned.

    Kiwisaver – meh, not certain the country can afford 4+4 at present let alone individuals.

    Tax – it’s all a red herring from Labour and National – the best way to make more money is to lift incomes in the country the best way to do that is to increase productivity.

    Trust – I don’t trust either of the two major parties, and Clintons little rave once again confirms he’s one of the most petty little bigots in the NZ blogosphere.

    Experience – In reality it’s about even if you look at the two parties – as I’ve said numerous times you might just be able to scrape together a reasonable cabinet if you could choose MPs from all sides – there is certainly a lot of dross there though.

  8. Socialism is Poison 8

    ACC
    Business people who’ve survived 9 years of Labour remember how much more effective and responsive ACC was when subject to competition. But then the Standard would want supermarkets run by the state – just like how it happened in the Soviet Union.
    TAX
    Somehow the left forget that tax is paid by taxpayers, it doesn’t just magically appear in the government’s coffers. In my world view, individuals are better able to determine how they spend their own money.
    TRUST
    Can’t add much to Paw Prick’s comments, particularly after Clark’s comments in today’s HoS about sticking with Winston. Has this woman no shame?

    The trouble is John Key is a slippery, spineless person with limited real experience and who stands for nothing and has got the KiwiSaver policy wrong. Even though Helen Clark is an untrustworthy, power hungry, amoral, unprincipled totalitarian I’m not sure that swapping her out for John Key is best for NZ.

    [lprent: The Standard is a program running on a machine. It doesn’t have opinions and doesn’t want anything. The posters (see the About) do have opinions but they often differ.

    I see that you got caught by one of my anti-troll filters, but apart from ascribing a mind to a program, this is almost rational.]

  9. Pascal's bookie 9

    hs, “Clintons little rave once again confirms he’s one of the most petty little bigots in the NZ blogosphere.”

    At least he’s got opinions mate.

    Far better than some that just blather on endlessly about how ‘they’re all the same’ or ‘it doesn’t matter’ or ‘they all suck equally’ or even worse, just try to divert the conversation away from any specific points towards empty generalities like ‘we need to raise productivity’.

  10. Daveski 10

    ACC does appear to be a case of principle over pragmatism

    Kiwisaver – the 2 John’s ad got booted into touch because of the KS cut in half spin so you’ve shot yourself in the foot on that one. You ignore the fact that only a smaller minority of NZers has enrolled in KS and that the 2+2 is more sustainable, more accessible and more affordable.

    Tax – even under National’s policies, highest tax earners are still paying a higher marginal rate and average rate than they were 9 years ago thanks to the envy tax Labour spitefully introduced. Moreover, you haven’t acknowledged Labour’s own flip flop on tax cuts nor the massive inefficiency of using WFF to redistribute wealth.

    Trust – you’re supposed to lead with your strengths. Even in the last week, Labour has demonstrated it can’t be trusted. Helen knew nothing about what here party president was up to? Reneging on tax cuts? Trust a party that will work with Winston? Yes, this one’s about trust and it’s a good reason to vote anyone except NZF and Labour. Should we trust Batman??

    Experience. Yes Labour have been steady but have undoubtedly wasted an opportunity to improve our economic indicators over the last 9 years which would go a long way to meet the general objectives of the left. You ignore English’s wealth of experience in the Treasury. Given Key and English’s experience, again you would wonder why you would want to attack on these lines.

    Frankly, National looks like it will sleep walk to an election victory. They certainly haven’t been on their A game all the time and they’ve often been clumsy and poorly managed. However, Labour’s vision does appear largely about retaining power for power’s sake.

    Rather than basing this election on policy and achievement, Labour and their lackeys have focussed on personalising their attacks on Key and running diversionary tactics eg secret agendas.

    Labour should lose but it could be a good election to lose.

  11. higherstandard 11

    PB

    Raising productivity as the primary means of increasing wealth and wages in NZ is endorsed by both the major parties.

  12. Pascal's bookie 12

    No shit hs?

    Blow me down with a feather. It’s such a counter intuitive idea.

    Most of the actual discussion is about how we best do that. That’s what I meant about specifics vs generalities. Restating the goal time and time again is kind of redundant. But carry on.

  13. paw prick 13

    What is a flamer Troll??

    [lprent: someone who tries to start mindless heated discussions about nothing. I don’t like reading them so I nip them in the bud for newbies to the site. Around here it is required that you use your brain in discussion at least some of the time. To anticipate your next question, I am your unfriendly BOFH (try google)]

  14. paw prick 14

    dose eveyone get flagged who dose not agree with your partys behaviour

    [lprent: Nope. Have you read the Policy yet?.

    There are a lot of people who comment here that disagree with my preferred party, and the preferred parties of other posters and moderators. However they don’t do it by looking like mindless idiot trolls. At present you don’t look like you’d be able to write comments to the point that you’d add to the discussion/argument.

    Lift your standard or leave.]

  15. higherstandard 15

    PB

    ermm I thought that was the point I was making in relation to tax being a red herring in terms of being a major issue ?

  16. higherstandard 16

    Paw prick

    Yes

  17. paw prick 17

    they are not NOTHING
    Remember you are campaining on TRUST.

    [lprent: Only to people who think at a very shallow level. ]

  18. Fiona 18

    Thank-you for these closing arguments Steve. I rang an aunt this afternoon, who I know is a swinging voter. She has her reservations about both National and Labour. She has a dozen grandchildren so I pointed out National’s ACC privatisation would cost her sons and daughters dearly, with the various mishaps of childhood.

    I also annotated the tax cut schedule of both parties. So useful to have it in front of me. LOL She was quite alarmed at National’s mercenary scheme.

    The killer crunch came when it was pointed out that Nationals plan will cost every Kiwisaver hundreds of thousands of dollars over their career.

    Thank-you again. I do believe Labour just scored a number of votes from that family.

  19. gomango 19

    Where is this reference to privatisation of ACC? I have only seen talk by national of opening ACC up to competition.

  20. gomango, what do you think opening it up to competition would mean? Private companies doing what a public organisation once did. That’s privatisation. sure, we would still own the acc organisation but the accident compensation system would be privatised

  21. max@gmail.com 21

    ACC – They sure as hell need some competition what with the crazy costs and every increasing beaucracy and lack of cover options
    KiwiSaver – Makes it more flexible for small businesses
    Tax – Tax tax tax, like death. Blah blah blah, it should be lower. Labour idealogically fear lower taxes.
    Trust – LOL! Trust Labour to lie? Yes.
    Experience – Experience can turn to contempt and then senility quite quickly.

    recaptcha: gimbling Congress. how apt.

  22. marco 22

    ACC, I spent 2 years on a waiting list for a shoulder operation. The shoulder used to partially dislocate in my sleep and was incredibly painful.
    Competition can be good if introduced well and regulated to ensure people get the best service possible, so I’m prepared to cut the Nats some slack on this one.

  23. higherstandard 23

    Fiona

    “She has a dozen grandchildren so I pointed out National’s ACC privatisation would cost her sons and daughters dearly, with the various mishaps of childhood.”

    No it wouldn’t – ACC is not being privatised and the part of ACC that may be opened up to competition would not impact one iota on the various mishaps of childhood.

  24. max@gmail.com 24

    And dont get me started on the health debacles around the country eg: kapiti coast an hbdhb, aye Annette and hubby?

  25. George 25

    Trust, i honestly don’t think Helen and the labour party remember the meaning of the word. Suppourting Winston through his saga is condoning corruption, not really surprising when you think that these are the people who gave us the EFA, to legitimise the theft of taxpayer dollars, i.e. CORRUPTION.

    FUA

  26. Aqualine 26

    Beware of privatisation schemes dress up as “choice: ”

    Private- public partnerships such as those put forward by National have one simple formula. Privatised profits and socialised costs. No competition. No better value. Just more costs to burden poor old Joe Public. See Electricity.

    Same deal from National for the roads with the exception that they are fully privatised since they are to be built on crown land and the public will pay via tolls…. and of course the general neglect of public roads which will effectively become bullock tracks.

    Beware of privatisation schemes dress up as “choice: ”

    I recommend George Monbiot ( monbiot.com) on the subject of private public partnerships. Full of detail.

  27. paw prick 27

    what is this? China?
    ever heard of free speach?
    My points are valid ones which point out the hypocracy in this thread.
    perhaps it is you who needs to be better informed. I think the work Shallow would apply to those who only would vote for Labour because they have become dependent on the state! and are therefore willing to turn a blind eye to its lack of morals!

    [lprent: This site is privately owned and paid for by me. It is not public property. Tell me would you also start yelling stupid comments in the middle of your neighbors house and call that ‘free speech’?

    I expend a considerable amount of effort to make sure this site is worth while running. One part of that is making sure that the comment stream does not descend into a sewer. That means that I can and do request a standard of behavior be complied with. The behavior I demand is that commentators don’t write comments that annoy the crap out of me because they are too crass and unthinking – especially since I have to at least scan them.

    It is no accident that this site is currently rated as #2 on the local measurements after just over a year. It takes effort – something that you obviously don’t put into the thought that generates your comments. You are a guest, nothing more. Make enough good comments of whatever persuasion, and you’ll be treated as a honored guest. Cause me too much effort (like writing another of these notes) and you’ll be banned.

    Incidentally, I’ve been treating you gently (as most commentators around here can attest). Usually I’m somewhat more abrupt and simply would have banned your arse out of here. However you do show signs of being better than a troll, but I’m rapidly running out of toleration. If you wish to control how a blog site is run – then set up your own. But if you want to comment here, then raise your standard. ]

  28. max. Labour is decreasing ACC costs by 20%. How would paying profits to some foreign insurer keep costs down? Because even the experts don’t think it will

  29. paw prick. calm down. lynn just asks that people adhere to standards of conversation on this blog – those standards are laid out in the policy page.

    also, he’s testing you as a new commentator who is commenting quite a bit to see if you’re the kind of person who flies off the handle when criticised. You know, the kind of person who starts comparing a blog site with comments exhibiting a huge range or disagreeing views to communist China.

  30. HS. Woodhouse, the guy who designed the scheme, said privatising it would be a big mistake (and opening to competition is privatisation – you’re moving the ownership of the service providers from the public to private). he also said you can’t just privatise part of the scheme without undermining the rest of it. there is a large amount of cross-subsidisation which would be lost by privatising the Work Account, increasing costs for the other accounts.

    macro. Privatising ACC would not increase capacity in the health system.

  31. max@gmail.com 31

    Steve, you mean Labour are saying they will try to reduce ACC costs by 20%?

    ACC has been long an inefficient state run monopoly.

  32. randal 32

    reading that lot I am totally depressed.
    what a whinge from start to finish
    I know this blog is non partisan but letting some of these right wing nutters go off or should I say on and on is almost like therapy
    the standard should be charging you dweebs
    hehehehehehehe
    and boring too

  33. max. no it isn’t. it is cheaper and more comprehensive than accident compensation schemes elsewhere. That’s what the PWC report says.

  34. max@gmail.com 34

    Randal, your insightful commentary is priceless, literally.

  35. higherstandard 35

    Clinton

    So you’re implying that the work account at the moment cross subsidises the other accounts.

    So how then do you suggest that costs are going to increase in the situation as outlined by Fiona ?

    The are certainly good arguments for not privatising ACC but Fiona’s isn’t one of them.

  36. Interesting you should wrap this blog on Experience, Steve. I canna say I agree with the word so much as its intuitive conclusion — that Clark, Cullen in the travail, as the French might say, before us in respect of financial meltdown and likely prolonged global recessionary impacts here — are the more capable and communities conscious mindset.

    Elsewhere I have written about security and stability being the twin prongs of progess; now I sense that instead of progress the more important word will be survival. In that respect the attributes you put up for the Labour leadership and as I see them the newly-arrived talents to that team, then more power to them.

    National, however, do come across strong on money and its management; though necessity might well bring the two sides closer together on that score. Yes, folks’ experience related to me tells of money meanness more than management for the so-called country party. Bad old days! Compassionless. Yet to be fair in good times they do look good. However, in the circumstances of Labour’s actual income tax cuts and putting more spend/save into pockets and purses the vote next Saturday will come in on a realisation that no matter how good National looked only weeks ago they’ve been overtaken by circumstances..

    Giving fair reason to hope that hard work and getting the vote out along with a solid coming together of parties resolved for the good of the country post-Election will pay off.

    Something everybody will want.

  37. max@gmail.com 37

    So why are labour proposing to try and reduce costs by 20%?

    Just because other countries acc schemes are even more inefficient than NZ’s doesnt make it an efficient scheme.

  38. HS. that’s what the Merrill Lynch report on privatising ACC says. The private insurers would make $200million profit essentially by taking the money that now goes to subsidise other accounts. That would leave a hole in the budgets for the other accounts. The integrity of the entire system would be undermined. That’s not what I say, that’s what the experts say, like the man who designed the system.

  39. Chris G 39

    wow I love all the tories posting here. wah wah boo hoo. eg. max at 8:17 … What a ridiculous rant.

    Great post Steve, quality points and as far as I’ve read no ones properly undermined them in the slightest.

    Even the Tories agree we need more of a saving culture in NZ, yet they want to cut arguably the best saving initiative in the country, in half. Great idea….just like cutting back super in the 90s… Do they ever learn?

    re: “Given Key and English’s experience”
    Sorry, wheres Key’s experience other than launching speculative raids on the economy? (Makes him really smart)
    Add to that (if) elected he will be the most inexperienced PM in NZ history unless I’m corrected otherwise.

    And to paw prick and your self proclaimed ‘valid’ points:

    eg. “Condoning Winston peters lies
    December mini budget (why not now)”

    Budget now… during an election campaign?
    Winstons lies? What about your boy Johnnys tranzrail eyes and Rodneys deafening silence over that?

  40. max. just because you privatise something doesn’t mean you make it more efficient.

  41. “Nowadays, when I hear someone is going to vote National or ACT, I just mention they want to privatise ACC and it’s usually enough to switch them to the Left. Why Labour hasn’t made more of this, I don’t know.”

    It’s because they’re spending too much time campaigning on Trust and Experience, and thus giving Key a platform to attack Labour every day of the week.

    This negative campaigning is not particularly attractive, and means we’re devoid of the hope we were showered with in elections previous. Talk the policy, talk vision.

  42. max@gmail.com 42

    Thats not the argument Steve.

    ACC is an inefficient monopoly, that is agreed by Labour as they are promising to cut 20% costs out of it if they return to power.

    Allowing othr providers to offer more choices and creating some econoomic drvers for reform in acc, rather than political rhetoric, will help dismantle a scheme that is destined to strangle tomorrows wrokers

    [no, Labour can cut the cost by changing the law and leaving the cost of old claims from National’s privatisation on to private insurers for longer – currently, the Government will take over the burden in 2014, Labour would push that out to 2019 (the Government is being generous to take over the cost at all). The cost of the system is the same, except we won’t be paying. SP]

  43. Ianmac 43

    As I heard it the NZ ACC and the NZ Pharmac were two of the systems that other Western countries admired because they were free from political interference. The intent for National to Privatise ACC, make political decisions on medical choices, and for that matter, tell the Kiwisaver how to invest to 40%, fills me with sadness, and anger.

  44. Aqualine 44

    Road Hogs:

    Private public partnerships in roading are supposed to allow National to commission roads the public wouldn’t otherwise be able to afford.

    The following article by George Monbiot shows just how the public in Britian has been ripped off by corporate road hog schemes.

    http://www.monbiot.com/archives/2004/11/30/road-hogs/

  45. gomango 45

    Steve – your language doesn’t make sense. You say again and again the nats will privatise ACC. As far as I am aware thats not correct – if you can prove me wrong I’ll happily accept that. Opening up that particular market to competition is not the same thing as privatising ACC.

    Do we say Solid Energy has been privatised by Labour? Do we say Air NZ has been privatised by Labour? Do we say Kordia has been privatised by Labour? How about these: Kiwibank (via NZPost), Public Trust, Radio NZ, TVNZ, Genesis, Meridian , Landcorp, Mighty River, Transpower, Timberlands, NZ Venture Fund, Learning Media Ltd, Animal Control Products……..

    They are all crown owned companies or SOE’s that compete with privately owned companies. You can’t describe any of them as privatised, you can describe them as existing in a market open to competition. Like the nats have said they’ll do with ACC.

    I’m not arguing the merits of either the status quo or what national are proposing, but neither is privatisation and saying “privatise ACC” is emotive – a dog whistle to the left if you like – and not a policy national have said they’d implement. If ACC is as efficient as some claim then it will compete and prosper like some (not all) of the other SOE’s.

    [ACC’s efficiency arises from its monopoly position. Your examples of SOEs snd COCs miss the point -they compete in markets but Labour hasn’t privatised them. Right now, the worker compensation system is publicly owned, National would make it partly privately owned – that’s privatisation, just because we’re not selling an organisation does not mean we’re not hanidng over ownership to private companies. SP]

  46. gomango 46

    The argument about kiwisaver is slightly incorrect. The real reason 850,000 people have joined up (and the sole reason me, my wife and numerous children also joined up) is the massive degree of subsidy available, primarily from the taxpayer (ie you are getting a little bit of your own money back) and secondarily from the employer (anyone slightly familiar with economics will know that sooner (most likely) or later (less likely) this subsidy will disappear as employers rejig pay rates, conditions etc to return to their “normal” risk adjusted rate of turn. Or they’ll take their capital and invest in something (or somewhere) else.

    Every economist (except presumably for Peter Conway), including all advice from Treasury, has time and time again stated that the current version of Kiwisaver is an incredibly expensive, inefficient and ineffective way of raising NZ’s domestic savings rate. There is also plenty of evidence to suggest that Kiwisaver won’t markedly change NZ’s domestic savings rate, it just changes how people save as they substitute away from other savings to capture the KS subsidies on offer. As has happened in OZ (yes I know it is compulsory there but the economic incentives are the same) Though the one happy effect of a scheme like kiwisaver is aggregating savings into more defined pools which allows portfolio management companies to make a lot of recurring, locked in for 30 years risk free fee income. Thanks Michael! say all the foreign owned Kiwisaver providers.

  47. Jared 47

    Chris: Every politician has to start out somewhere, so your little tirade about experience is rather redundant. At least Key brings fresh vision than a stale career politician looking to secure her job rather than the future of the country. If we are going on political campaigns, having a campaign of “trust” and merely attacking the opponent at every chance than talking about policy is not a positive campaign. Trust is not signing a painting that wasn’t hers, speeding to get to a rugby game, the whole NZ First debacle. That, is not what I would consider trust.

  48. gomango 48

    Steve – at least you are now saying National may/will privatise the industry, that is very clearly not the same thing as privatising ACC. Like most of those SOE’s I listed, the government will continue to own ACC – consumers will be able to choose between ACC and other providers (like TVNZ and it’ competitors, like Solid Energ and its’ competitors, like Public Trust and its’ competitors, like Kiwibank and its’ competitors etc etc etc. They all exist in privatised industries, but the SOE’s and other crown entities are not privatised themselves.

    And how can you possibly say something like “ACC’s efficiency arises from its monopoly position.” Have you had no exposure to economics?

    Unless you are arguing that because the ultimate owners of ACC are those paying ACC levies (in all their forms) the monopoly super profits that go to the owner are actually benefitting those who pay the levies as they are the owners, though thy cant take a dividend. You’re right – I can’t work out that logic either. I’m pretty sure we haven’t reinvented basic economics with ACC – holders of monopoly power never, ever are the most efficient providers of a service, though they are invariably the most profitable. I’d be concerned if the Nats sad they’d privatise the accident compensation industry and allow only one firm to offer insurance services, but thats not what the are saying.

    And being a student of ACC finances you would know that they are underfunded (in terms of their liabilities versus current assets) to the tune of around 4 billion dollars (that was before this years market falls) and at best won’t be until around 2017 before they have actuarial solvency across all their pools. So in a sense it is good for the crown balance sheet to retain the monopoly, but unfair to levy payers as they are paying subsidies this year to service claims that arose years and years ago.

  49. r0b 49

    Every economist (except presumably for Peter Conway), including all advice from Treasury, has time and time again stated that the current version of Kiwisaver is an incredibly expensive, inefficient and ineffective way of raising NZ’s domestic savings rate.

    Really? Got some links there? Seems unlikely, given that Treasury were extensively involved in the development of KiwiSaver. The joint Treasury / IRD overview of the enhanced KiwiSaver package Executive Summary begins:

    As a policy to improve private savings, the enhanced KiwiSaver package stacks up well. Its design combines a number of the more successful elements of international saving schemes, such as automatic enrolment, lock in and matching contributions (from the employer and government). Further, the tax incentives are targeted at those that are least likely to be saving to start with i.e., low to moderate-income earners. As a result, we consider that the package will have a material impact on private savings and that any potential impact on consumption will be limited.

    Here’s the IRD IRD KiwiSaver Annual Report 1 (30 June 2008):

    Membership of superannuation schemes, both corporate and personal products, was in decline prior to the introduction of KiwiSaver. Many corporate superannuation products were being closed to new members, wound up or incorporated into master trusts to improve administrative efficiency. Individual superannuation schemes were also affected as individuals favoured alternative vehicles for retirement savings.

    Many providers interviewed for the evaluation consider KiwiSaver’s introduction has stimulated the managed funds industry by broadening the nature of the superannuation market. … Despite concentration in the market, there is diversity evident in both providers and products, providing competitive opportunities for innovation in distribution, service and investment approach.

    KiwiSaver concentrates savings for investment here in NZ. Though it is very early days we can start to see the effects in helping to deal with the current financial crisis:

    According to funds industry performance analyst FundSource, net outflows for the quarter of $48.6 million would have been much uglier without KiwiSaver inflows of $353 million. … Mr Atkins said the high voluntary uptake suggested a big proportion of the funds would be invested in growth assets. “This will provide a boost to the financial services industry, with greater funds under management also potentially boosting local equity markets.”

    There is also plenty of evidence to suggest that Kiwisaver won’t markedly change NZ’s domestic savings rate

    No there isn’t, there’s one debatable study, and you have to chose their worst case scenario to reach this conclusion.

    Sounds to me gomango, that you get all your “information” off KiwiBlog. You need to get out more.

  50. gomango 50

    actually my memory was faulty – I’ve just checked the last ACC annual report – currently (as of march 2008) ACC is underfunded to the tune of 8 billion – over the 2008 financial year the deficit grew from 5.6 billion to 8.0 billion……… and that was all growth in liabilities (increase by $4.2billion gross!!!!) as asset performance was actually positive in the 2008 financial year (grew by 800 million).

    Total assets 13.2 billion, total liabilities 21.2 billion……. hmmmmm – that sounds like a negative equity position to me.

    gross income in 2008 year from operating activities 4.0 billion (thats us paying levies, around $1000 for every man, woman and child in NZ (somehow I don’t think I should be paying $6000 to insure my family), expenditure 3.0 billion leaving 1 billion to go into the reserves. That 1 billion represents $250 for every man, woman and child in NZ – and essentially it is how much we are being “overcharged” by ACC due to its monopoly position.

    So i really challenge any statement along the lies of “ACC efficiency”. If any government is serious about running an efficient workers compensation scheme in NZ here is how to do it.

    1. Transfer sufficient funds from the Guardians of NZ Super to ACC so that ACC s now fully funded. Has no effect on the consolidated crown balance sheet – its only an internal accounting movement. That still leaves the Super fund with a nice lump of cash to play with as they currently plan to ramp up their staff by 40 over the next 2 years.

    2. Put in place a coherent regulatory regime that has relatively onerous reserving policy, plus put a tender out to insurers for a scheme – paid out of general tax revenue – to cover non earners – thats currently around 800 million per annum.

    3. Require ACC to have a return on capital in line with Government borrowing costs – that immediately makes ACC 10% to 15% per annum more efficient than the private sector. Unfortunately governments (including our current one) get greedy and see monopoly SOE’s as an alternative to tax income and demand ever higher dividends.

    4. Then open the market to competition. ACC would prosper as they have scale, an embedded market position plus should have a contract from the govt to insure non earners as well as a significantly lower cost of capital.

    That would be the logical way to improve outcomes for all stakeholders but ideology always trumps logic.

  51. max@gmaail.com 51

    I agree with gomango Steve, your plan quacks like a duck and therefore is a duck.

    Comeon, come clean, Labours planning to privatise ACC cause its a blackhole.

    And I notice, *just* before the election, ACC manages to provide some options for cover plus regarding payment amounts and cover (all very badly explained – no doubt a rush job) for the self employed. How convenient eh.

  52. gomango 52

    rob – if you demand that i spend hours looking for links i will but I have been to presentations over the last 18 months where economists from the following organisations have all made the point that the latest version of kiwisaver is inefficient and an expensive subsidy given the result achieved:

    ANZ
    Westpac
    CBA
    Treasury (alright, i admit this was over a few drinks after listening to the ANZ view)
    Deutsche Bank
    ABN AMRO

    There is always an official line that govt departments follow which often varies from the internal consensus – I know, I have worked in policy areas at the big building on the terrace.

    Personally I am for kiwisaver even just for the signal it sends, it will be seen as one of the better things Cullen did even if you debate the right structure – I don’t really care too much about the form but the government doesnt really need to be pouring in the subsidies that it does – the scheme would be viable without them. Most people on higher incomes have far better options to save with than via kiwisaver, but the common view is like mine “I want the subsidies so I’ll at least join up at minimum levels (and my non working spouse, and my non-working kids). Can’t leave something free on the table.”

    And your anecdote from fundsource suggests the substitution effect common with forced or directed savings schemes.

    And why do you insist on getting all perjorative and snarky with throw away comments – can’t people here have a sensible debate without name calling from the word go. Name calling after seeing a continuous stream of stupidity is acceptable but as an opening gambit? Says more about you than it does about me. I tend not to debate much on the righter blogs but when I do its usually to disagree with something they say. And yes my bias is prob to the right but my outlook is (hopefully) shaped by what I regard as sensible economics and common sense. Quite happy to call initiatives from Labour good if they make sense.

  53. r0b 53

    rob – if you demand that i spend hours looking for links i will but I have been to presentations over the last 18 months

    Spending hours is up to you entirely, depends how much you want to make your case. I’d certainly be interested if you could find just a few public statements to substantiate your claims that “the latest version of kiwisaver is inefficient and an expensive subsidy given the result achieved”. It’s all very well to allude to briefings behind closed doors, but a lot more plausible if there is publicly available material, especially given that the public statements of Treasury and the IRD (as per above) described the scheme as well designed and effective.

    And your anecdote from fundsource suggests

    It is not an anecdote, its direct quotes from FundSource as published in The Herald.

    And why do you insist on getting all perjorative and snarky with throw away comments – can’t people here have a sensible debate without name calling from the word go. Name calling after seeing a continuous stream of stupidity is acceptable but as an opening gambit? Says more about you than it does about me.

    Where did I call you names? False accusations as an opening gambit? Says more about you than it does about me.

    Quite happy to call initiatives from Labour good if they make sense.

    Pleased to hear it. May there be many more!

  54. randal 54

    back on topic
    closing arguments
    hooton is in HONg KONG
    must be looking for a new job after the election?

  55. Chris G 55

    Jared,

    “Every politician has to start out somewhere” Oh so they can be PM off the cuff?

    “At least Key brings fresh vision than a stale career politician looking to secure her job rather than the future of the country.”

    Wow straight from the horses mouth, you bought in to that fresh vision crap? whys he got such fresh vision? Glossy brochures repeating the words: Change, fresh and growth? oh and ‘Brighter future’

    Key brings the ‘fresh’ vision of McCully, Ryall, Brownlee, English, Williamson, Smith and Smith… list goes on. Plus he brings the ‘fresh’ vision of a merchant banker, like the people who started causing the economic financial crisis.

    How do you know Clark is just trying to secure her job? Did it ever occur to you that she wants the best for the country? Not to mention she could easily get a good job elsewhere with a resume like hers.

  56. Rich 56

    I’m surprised more hasn’t been made of ACC privatisation. People take this for granted, but go overseas and ask what the premium is for accident isurance offering 80% income protection, and you’ll get a nasty shock. Or try and insure a car in the UK or (worse) the US.

  57. Hoolian 57

    Auqaline:

    Beware of privatisation schemes dress up as “choice”: Private- public partnerships such as those put forward by National have one simple formula.

    Beware of speaking out of turn. Here on the Standard all lefties must subscribe to a very narrow-point of view. I would advise you for speaking out against PPP when Labour is introducing them on the Waterview project. Wait for Clinton to write up a post before deciding your opinion,

    Fiona:

    I feel terribly sad for your poor grandmother, who obviously is a very intelligent woman. Its a pity she was so easily persauded by contemptuous lies. But at 36%, Labour is going to need you to sow your lies a whole lot faster.

    How do you know Clark is just trying to secure her job? Did it ever occur to you that she wants the best for the country?

    If Clark knew what was best for NZ, she would pull out of the race. If she knew what was best for NZ, she wouldn’t be running for re-election. That she is shows that she really does not care about NZ at all. She just wants her “historic” fourth term.

    Oh, I cannot wait for the posts on Sunday morning when National has won the election. Finally the Standard will get is just desserts.

  58. r0b 58

    Hoolian – your last 2 paragraphs show the level of your engagement with the political process. It’s some kind of personality driven gloat fest to you?

    Grow up a little. Politics is about the future of this country and those who live in it. Clark and Labour are standing again because they believe that they offer the best policies for NZ and the most credibility to deliver them.

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