web analytics

Getting it right matters

Written By: - Date published: 9:49 pm, October 11th, 2008 - 11 comments
Categories: election 2008, kiwisaver, Media, national - Tags:

I don’t want this post to be taken as overly critical; it’s just meant to offer some constructive advice. John Armstrong’s piece in the Herald today is good. It’s great to see a senior political commentator acknowledging that politics is a competition of ideologies, rather than merely a game or competition of personalities, but it’s terrifying to see such a lack of either policy knowledge or maths skills from a person in such an important position.

Armstrong writes:

“National’s commitment [to Kiwisaver] has to be questioned.. More so after it was rumbled by the Council of Trade Unions, which found in the fine print that Government contributions would be reduced for those earning between $26,000 and $52,000 and who have been paying 4 per cent of their salary into the scheme.”

That’s wrong on two points:

1) Every Kiwisaver with an income below $52K would lose government contributions, not only those between $26K and $52K.

2) The CTU did not read any fine print. There is no fine print. In fact, National makes no mention of the fact that under National many Kiwisavers would get less money from government contributions than they currently do. But it is obvious to someone who knows the policy and The Standard posted on it two hours after the tax package came out.

Here’s how it works: the Government matches your contributions of 4% of your income Kiwisaver up to $20 a week. That means that a Kiwisaver with an income of $26K ($500 a week) is contributing $20 a week. They and everyone on a higher income (= contributing more) gets the full $20 a week. Everyone below gets 4% of their weekly income (eg. someone with an annual income of $13K, $250 a week, gets $10 a week). National would only match 2% contirubtions. That person on $26K would only be contributing $10 a week and lose $10 a week in matching government contributions. The person on $13K would contribute $5 a week and lose $5. And people on incomes up to $52K would lose out. In the current system, they are getting $20 a week; at 2% they’re contributing less than $20 a week and so lose government contributions. Any Kiwisaver with an income below $52K would lose thousands in over the years (not including the employer contributions they would also lose).

I would have thought professional political commentators would knows how Kiwisaver works and would have picked up on the implications of going from 4% to 2% for government contributions immediately. So, it’s worrying that it’s still news to Armstrong, and presumably other professional political commentators, days after the policy came out. Many government policies have these wrinkles which entail maths at a slightly complicated than every day level and have serious ramifications for Kiwis. Media outlets need to ensure their commentators, or at least their researchers, are able to understand them so that Kiwis get the information they need.

11 comments on “Getting it right matters ”

  1. rave 1

    Nor did I notice Armstrong pick up on the fact that the employer will effectively pass the cost of the employer contribution of 2% onto the worker as a ‘wage increase’, making the worker cough up 4% for a 2% government contribution. And of course miss the irony of Key’s argument that a 2% contribution would encourage those on low incomes to sign up!?!?

  2. the sprout 2

    it seems to me that National are still benefiting from a lot of voluntary blindness amongst people who still desperately want to believe their team and ideas aren’t as lame as National’s leadership keeps insisting on proving time, and time again.

    i doubt it was a conscious oversight, i think Armstrong just didn’t want to believe they’re as hamfisted as they are.

  3. Paul Robeson 3

    Hah!

    No one from the Standard ran it- it took the Herald editorial!

    http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=10536924

    Drs Bollard and Brash and good old Granny unite to tell John Key he has more in common with Sarah Palin than Obama.

    To tell the truth- he has done nothing but attempt to undermine confidence in any number of New Zealand institutions in his cynical attempt to regain the Treasury benches. This week it was the Reserve Bank, and our money supply.

    They admitted today that they hadn’t even properly thought through their cuts to Kiwisaver. This is all they have supposedly been working on for the last 3 years! How can this incompetent, shifty, ill disciplined lot be considered fit to govern?

  4. Felix 4

    “They admitted today that they hadn’t even properly thought through their cuts to Kiwisaver.”

    Do you have a link for that too please Paul?

  5. Felix 6

    Thanks Steve,

    It’s all becoming quite farcical isn’t it?

    It’s like they really thought they wouldn’t have to explain anything. How long do they think they can answer every question with “we’re looking into that”?

  6. Con 7

    It’s like they really thought they wouldn’t have to explain anything. How long do they think they can answer every question with “we’re looking into that’?

    Ah … we’ll get back to you on that.

  7. Robin Grieve 8

    Labour’s current Kiwisaver scheme is a great opportunity to take money off the poor and give it to the rich. It is such a generous scheme, for every $1000 a person puts in the government puts in $2000. (employers put in nothing under Labour but will have to under National). 800,000 are in and they are getting paid this generous amount from the taxes of the poor who cannot afford the 4%. Under National they only have to put in 2% so it should become under National a far fairer scheme for the low paid than it is now. All low paid workers should vote National. (watch out that last statement might put your blog in breach of the Labour Green NZ First anti free speech laws like the radio station ZB which is now being investigated by the police for urging people to vote Labour)

  8. ghostwhowalks 9

    Robin are you blind…” (employers put in nothing under Labour but will have to under National”

    Currently Employers have to pay a minimum of 2% rising to 4%, and they cant take that share out of your wages, which is what national will alow

  9. randal 10

    looks like the whole country is under investigation just for being alive. If the nats hadnt tried to buy the last election the police would not be involved in the very process of democracy but now they seem to have becom the arbiter. what the hell is going on!

  10. Robin Grieve 11

    ghostwhowalks lets see who is blind, the employers 2% is fully refunded by the govt. (or really the poor taxpayers on $12 per hour who can’t afford labours scheme)
    DUH

Recent Comments

Recent Posts

  • Fast-tracked Northland water project will accelerate economic recovery
    The Government has welcomed the decision to approve a new water storage reservoir in Northland, the first of a number of infrastructure projects earmarked for a speedy consenting process that aims to accelerate New Zealand’s economic recovery from Covid-19.  The Matawii Water Storage Reservoir will provide drinking water for Kaikohe, ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Tokelau Language Week reminds us to stay united and strong
    Staying strong in the face of challenges and being true to our heritage and languages are key to preserving our cultural identity and wellbeing, is the focus of the 2020 Tokelau Language Week. Minister for Pacific Peoples, Aupito William Sio, says this year’s theme, ‘Apoapo tau foe, i nā tāfea ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • NZ announces a third P-3 deployment in support of UN sanctions
    The Government has deployed a Royal New Zealand Air Force P-3K2 Orion (P-3) maritime patrol aircraft to support the implementation of United Nations Security Council (UNSC) resolutions imposing sanctions against North Korea, announced Minister of Foreign Affairs Winston Peters and Minister of Defence Ron Mark. “New Zealand has long supported ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Pacific trade and development agreement a reality
    Pacific regional trade and development agreement PACER Plus will enter into force in 60 days now that the required eight countries have ratified it. Trade and Export Growth Minister David Parker welcomed the announcement that the Cook Islands is the eighth nation to ratify this landmark agreement. “The agreement represents ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Securing a pipeline of teachers
    The Government is changing its approach to teacher recruitment as COVID-19 travel restrictions continue, by boosting a range of initiatives to get more Kiwis into teaching. “When we came into Government, we were faced with a teacher supply crisis,” Education Minister Chris Hipkins said. “Over the past three years, we ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Border exceptions for a small number of international students with visas
    The Government has established a new category that will allow 250 international PhD and postgraduate students to enter New Zealand and continue their studies, in the latest set of border exceptions. “The health, safety and wellbeing of people in New Zealand remains the Government’s top priority. Tight border restrictions remain ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • First COVID-19 vaccine purchase agreement signed
    The Government has signed an agreement to purchase 1.5 million COVID-19 vaccines – enough for 750,000 people – from Pfizer and BioNTech, subject to the vaccine successfully completing all clinical trials and passing regulatory approvals in New Zealand, say Research, Science and Innovation Minister Megan Woods and Health Minister Chris Hipkins. ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • International statement – End-to-end encryption and public safety
    We, the undersigned, support strong encryption, which plays a crucial role in protecting personal data, privacy, intellectual property, trade secrets and cyber security.  It also serves a vital purpose in repressive states to protect journalists, human rights defenders and other vulnerable people, as stated in the 2017 resolution of the ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Ministry of Defence Biodefence Assessment released
    The Ministry of Defence has today released a Defence Assessment examining Defence’s role across the spectrum of biological hazards and threats facing New Zealand. Biodefence: Preparing for a New Era of Biological Hazards and Threats looks at how the NZDF supports other agencies’ biodefence activities, and considers the context of ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020
    New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020 Hon David Parker’s response following Thomas Piketty and Esther Duflo. Good morning, good afternoon, and good evening, wherever in the world you might be. I first acknowledge the excellent thought provoking speeches of Thomas Piketty and Esther ...
    BeehiveBy beehive.govt.nz
    3 weeks ago