Taking from Kiwisavers & giving to the rich

Written By: - Date published: 6:32 am, May 10th, 2011 - 81 comments
Categories: budget 2011, class war, kiwisaver, tax - Tags:

John Key has confirmed he intends to slash Kiwisaver to the bone by cutting the up to $1040 a year government contribution you get as a member. Of course, this is the savings budget according to National’s spin. They’re going to ‘encourage’ savings by taking that money from Kiwisaver and giving it to rich individual savers. It’s just more class war.

Word on the street is that National will use the money they pull out of Kiwisaver to make interest on deposits in banks and finance companies tax-free, at least up to the rate of inflation. It’s not clear whether they will cut the government Kiwisaver entirely or exactly how the tax-free interest will work but the details only change things by a matter of scale.

Let’s consider two scenarios:

Mary is a typical worker. She is on the median full-time wage of $40,000. Thanks to National’s previous cuts to Kiwisaver, she isn’t entitled to the full $1040 a year tax credit because 2% of her income is just $800 per year. With a kid to raise, rent to pay, and the cost of everything going up, her after-tax and after Kiwisaver weekly income of $625 doesn’t go far but she manages to put away $50 a week on top of her Kiwisaver – $2,500 a year.

With inflation at 4.5%, she gets $112.50 a year in interest tax-free. At her marginal income rate of 10.5%, her total tax saving per year is $12.

Mary loses $800 a year in Kiwisaver and gains $12 a year in tax-free interest. Net result: -$788 a year

Now consider John. He is in a high powered role that pay $405,000 a year. Let’s say he is also in Kiwisaver. The loss of those tax credits sets him back $1040. Fortunately, he doesn’t have much in the way of living costs: his employers supply the house (newly repainted), the chauffeur-driven car, there’s always some dinner he can go to, free holidays, and if he’s running late to something he can even call in a helicopter all paid for by the employers! So, his net weekly income of $5080 goes a long way. He manages to save half of it (got to have some treats) – $2500 a week or $130,000 a year.

With inflation at 4.5%, he gets $5850 a year in interest tax-free. At his marginal income rate of 33%, his total tax saving per year is $1930.

John loses $1040 a year in Kiwisaver and gains $1930 a year in tax-free interest. Net result +$890 a year

With each subsequent year’s lost Kiwisaver contributions and interest-free tax, the disparate wealth impacts of these changes on Mary and John grow further and further apart.

It’s almost as if the government has reached into Mary’s pocket, taken out hundreds of dollars a year and given it to a man on ten times her income who doesn’t need it.

A policy that takes $1040 a year out of $1.6 million Kiwis’ savings and gives it out in such a way that you have to have at least $70,000 in savings and be on the top tax rate to replace what you’ve lost seems like a policy tailor-made to take money from the many and give it to the few who need it least.

But that Nice Man, Mr Key wouldn’t do such a wicked thing, would he?

– Bright Red

81 comments on “Taking from Kiwisavers & giving to the rich ”

  • Comments are now closed

  1. Robert Atack 1
    10 May 2011 at 6:48 am

    Funny that, so Kiwi Saver is having problems …. another I told you so moment 😉
    Maybe this is an opportunity for Ben Clark to come out and explain how much of a con KS is?
    Notice the greeds are still backing it, even though ‘we’ have to destroy the planet to make a payout in 47 years. Or 5 for that matter.
    The emperor has no clothes.

  2. PeteG 2
    10 May 2011 at 6:59 am

    It’s pathetic trying to call this class war. KiwiSaver favours high earners who can afford to invest and take the substantial government icing.

    If the government contribution is lowered it will affect someone who earns 50k more than it effects someone on 40k. It won’t change anything for those that can’t afford to be in KiwiSaver – mostly lower income earners.

    In tough financial times it is poor economics to borrow money from overseas to give to people to invest. For every billion dollars dished out on KiwiSaver it costs much more in ongoing interest for the government.

    If the government contribution is dropped, say in half, there is still enough financial incentive to stay with KiwiSaver, a 50% return from the start is still an attractive proposition. It will affect me, I’ll get less, but I think it is a sensible move. And it won’t favour me so much over low earners.

    • burt 2.1
      10 May 2011 at 7:56 am

      Precisely, but remember you are talking to people who think that a tax cut is the govt giving you money.

      • mickysavage 2.1.1
        10 May 2011 at 8:17 am

        But Burt
         
        The last 30 years have seen a huge transfer of wealth from the bottom 90% to the top 10% and more specifically the top 1%.
         
        The capitalist system is failing because of the rapacious greed of the most wealthy.
         
        The tax system is one of the few tools left to try and equalise things slightly.
         
        Your proposal of the sanctioning of outright greed is a recipie for social disorder, rioting and revolution.
         
        There is no justification whatsoever for the extreme differences in wealth and the sooner the human race addresses this the better things will be.
         

        • PeteG 2.1.1.1
          10 May 2011 at 8:27 am

          You do realise that the current level of KiwiSaver handout favours those earning $50k or more don’t you?

          • Blighty 2.1.1.1.1
            10 May 2011 at 8:33 am

            under Labour, you got the full $1040 subsidy if your income was $26,000 or over. National made it worse. Now they’re going to make it even worse.

            • higherstandard 2.1.1.1.1.1
              10 May 2011 at 8:35 am

              Yay free money…… we’re all saved.

              Quick someone ring greece and Spain and ……..

              • rosy …
                10 May 2011 at 8:42 am

                I thought kiwisaver was introduced to counteract the fact that NZers did not save enough. The incentive changed people’s attitudes. Even for the poor it meant looking at the future instead of focusing only on the present. I haven’t heard anywhere that we’re now saving too much, have you?

            • PeteG 2.1.1.1.1.2
              10 May 2011 at 8:46 am

              Wrong. National only changed the minimum employer contribution (which effectively is part of your wages with another name).

              Any change will be a cut to the member tax credit, you get the maximum of that if you earn 50K or more, so reducing it will reduce the tax refund to those earning more.

              • Blighty …
                10 May 2011 at 9:06 am

                no. National made the following changes:

                * The minimum member contribution rate will reduce from 4% to 2%, and 2% will be the default contribution rate for new employee members from 1 April 2009.
                * The member fee subsidy will be discontinued from 1 April 2009.
                * Compulsory employer contributions will be capped at 2% from 1 April 2009.
                * The employer tax credit will be discontinued from 1 April 2009.
                * The employer superannuation contribution tax exemption will be capped at the compulsory employer contribution of 2% from 1 April 2009. (That is equivalent to 2% of the employee’s gross salary or wages.)
                * The KiwiSaver Act will be amended to make it clear that upon joining KiwiSaver, no employee can have their gross pay reduced as a result of employer contributions. This will ensure that when employees join KiwiSaver, the compulsory contributions from their employer are a genuine addition to their existing pay. The changes will also provide employers and employees with the ability to negotiate their own arrangements in good faith. The Employer Relations Act amendment relating to KiwiSaver will then be obsolete, and will be repealed from the date of assent of the Employment Relations Amendment Bill.
                * The KiwiSaver Act will also be amended to provide a limited exemption from compliance with securities and other related legislation for a limited period so that providers have time to update prospectuses and investment statements, for example.

                reducing the default contribution rate effectively doubled the income that people on that defualt rate need to be earning to get the maximum govt contribution.

                • Lanthanide …
                  10 May 2011 at 10:18 am

                  No, they didn’t, Blighty. They proposed those changes in the 2009 budget, but didn’t actually implement them due to the outcry.

                  You still get the full tax credits if you personally contribute $1042 or more in a given kiwisaver year (ending 30th June), regardless of whether it was from your salary or from top-ups. I can quote you the email from my kiwisaver provider if you need evidence of this.

                  The default rate used to be 4%, and it is now 2%. There’s nothing stopping you from choosing to contribute at 4%. Now your employer will only be forced to match you up to 2%, but that doesn’t mean National have some how fiddled you out of tax credits – they’ve only fiddled you out of employer contributions.

            • Monty 2.1.1.1.1.3
              10 May 2011 at 2:36 pm

              I know this is going way over your head, but at present 10% of GDP or about $16b is the annual deficit. That is about $4,000 for every man woman and child (so my family annual deficit contribution would be $20,000 and the guy next to me would be $16,000.) Hell – if my personal account was a $20,000 annual shortfall I would cut everything right back to the bone. I would be bringing my spending under control before investing in shares, property, colour TVs, house extensions. The weekly shopping would be on the basis of what is required to get through the week. The “Nice to Haves” would not exist. My Priorty would be shelter, food education and health. Then the other stuff can follow.

              In addition I would look for other ways to improve my lot – seek a better job, seek promotion for existing job, and make my kids earn money for items they want.

              Does the parallel between a personal situation and the government situation make any sense to you socialists?

              Should the government run their accounts the same way?

              • RobC …
                10 May 2011 at 5:27 pm

                Pure gold Monty.

                So I guess helicopter flights to get from photo-op to photo-op, Crusher spending 11k so her hubbie can get to work, seat-warmers in BMWs etc etc are all examples of cutting spending to the bone.

          • mickysavage 2.1.1.1.2
            10 May 2011 at 8:38 am

            You do realise that the current level of KiwiSaver handout favours those earning $50k or more don’t you?
            So why the need to make it even more favourable to the wealthy?

             
             
             

            • PeteG 2.1.1.1.2.1
              10 May 2011 at 8:48 am

              It won’t. You obviously don’t understand how it works. Reducing the MTC will reduce the tax refund for the higher earners.

              It will make it less favourable for “the wealthy”.

              When you understand it you had better let the Labour strategists know.

              • mickysavage …
                10 May 2011 at 9:03 am

                BS
                 
                The overall effect taking into account tax cuts for the wealthy and cuts to government services is that there is a transfer of wealth from the poor to the rich.  This is another element of it.
                If you have a limited approach and ignore various factors you may reach the conclusion you have but the net effect of all of the decsions is that the wealthy are better off.
                 

              • Draco T Bastard …
                10 May 2011 at 1:36 pm

                Reducing the MTC will reduce the tax refund for the higher earners.

                If it’s reduced in line with inflation rated tax cuts on savings then the rich are going to get far more than the loss will be. The people in the top 0.1% are going to be better off to the tune of thousands of dollars per year.

                As I told you yesterday – National are the party that purposefully puts tax loopholes for the rich into the tax system and this will be one of them.

        • DaveL 2.1.1.2
          10 May 2011 at 8:40 am

          “The capitalist system is failing because of the rapacious greed of the most wealthy.”

          Garbage Micky, the biggest problem is the ongoing drain that the welfare system places on the productive sectors of society. The sooner that action is taken to minimize the harm this group is placing on growing NZ’s economy the better.

          • terryg 2.1.1.2.1
            10 May 2011 at 10:01 am

            Absolutely. Corporate welfare that is – SCF anyone? AMI? backhand deals for Mediaworks?

          • Blighty 2.1.1.2.2
            10 May 2011 at 10:10 am

            So, DaveL. Who are you going to cut from welfare?

            Remember, we need big numbers to make even the slightest dent on governemtn spending – $700m is 1% of what the government spends, and it’s enough to support about 50,000 people on benefits, which just so happens to be about as many extra people who have gone on working age benefits since National took office.

            So, what 50,000 are you going to cut? Are they pensioners? Are they people who lost their jobs through the Great Recession? Are they single parents unable to fund a job? Are they mentally or physically ill?

            50,000, DaveL. Who are the 50,000 who don’t deserve the support they get? Remember, National hasn’t been able to find them, quite the reverse

            • DaveL 2.1.1.2.2.1
              10 May 2011 at 10:35 am

              Pensioners and Mentally/Physically Ill I would make no change

              DPB would only be eligible for mothers of children under 12 months of age and only available once every 5 years. If you have a child outside of that time period DPB would only be available for 12 weeks.

              All others would be required to report to a work centre daily by 0830 to receive payment of that days benefit. Child care facilities would be available for mothers with non school age children and would be provided by training currently unemployed mothers in programs such as Porse.

              Once people arrive at the work centre they would be put on to work details designed to ensure that they do not impact on other productive sectors of the economy. The goal wouldn’t be to remove any person is removed from welfare just that the appropriate motivations are set for people to find better choices for themselves.

              • HC …
                10 May 2011 at 11:05 am

                Ha! Bring in the poor houses with bunk beds in shared rooms for unemployed and work camps to employ those that do not manage to get employment on “the market” within 2 to 3 months? Is that the next step according to your agenda???

                What about bringing in economic policies that “develop” this country into one that creates and keeps skilled people actually getting sufficiently well paid jobs in value added production, scientific and technological development and the creation of modern, energy efficient, affordable and sustainable infrastructures like more public transport, more diversified agricultural and other production and the likes?

                All we get is national cycleways hardly anyone will use, passports to rich migrants that are now also allowed again to “invest” in real estate to qualify for citizenship, tax cuts for high income earners, pressure on sick, invalids and dpb recipients on benefits, questionable policies for mining environmentally sensitive areas and the likes.

                Has your mate Jonkey the Donkey mate of Don Dagger Brash suggested you come and spread your ideas here?

                Kiwi Saver will next be re-labelled into “Kiwi Slaver”, that is likely to be another aspect of it to be announced in the budget soon.

              • joe90 …
                10 May 2011 at 11:17 am

                Pensioners and Mentally/Physically Ill I would make no change

                Best you check a couple of Dims charts ‘o’ the day.

                http://dimpost.files.wordpress.com/2010/08/welfare.png

                http://dimpost.files.wordpress.com/2010/08/wwg21.png

  3. daveo 3
    10 May 2011 at 7:20 am

    I’m not rich and I can’t afford to save sweet FA after food and rent but I’m in Kiwisaver because it offered the best savings deal I could get and I plan to use it for a house deposit one day. I get nothing else from the government and my tax cut only went half way to meeting this year’s increase in petrol and food. This is shit.

    • higherstandard 3.1
      10 May 2011 at 7:30 am

      “I get nothing else from the government and my tax cut only went half way to meeting this year’s increase in petrol and food. This is shit.”

      D – the taxpayer provides pretty much free healthcare and education (up to tertiary level) to you as well, plus a police force, roads…. infrastructure etc…. to say you get nothing else apart from the kiwisaver contribution is incorrect.

      • daveo 3.1.1
        10 May 2011 at 7:40 am

        the taxpayer provides pretty much free healthcare and education (up to tertiary level) to you as well, plus a police force, roads…. infrastructure etc…

        You get that too. How much was your taxcut worth?

        • higherstandard 3.1.1.1
          10 May 2011 at 7:47 am

          A few percentage points for my private business and I’m sure you’re familiar with the new personal tax rates.

          • daveo 3.1.1.1.1
            10 May 2011 at 7:59 am

            What you’re saying is you and me are doing the same work we were doing before the tax cuts and now you’re better off and I’m worse off because of this government. Now John Key is lining up to take another thousand bucks off me and give you a tax cut on your savings and investments interest and you’re saying that’s just too bad and I should be grateful for roads and high school?

            • higherstandard 3.1.1.1.1.1
              10 May 2011 at 8:09 am

              D as per my first comment all I’m saying is that your comment that the government (and by default the taxpayer) gives you nothing is incorrect.

              Your suppositions about me are worthless – I am an avatar on the interwebs

  4. burt 4
    10 May 2011 at 7:53 am

    Umm let me think about this… the only people who get the tax payer funded “handout” are people paying enough tax to pay kiwisaver contributions… but suddenly it’s a class was if we stop recycling tax payers money back to the same people who paid it in the first place….. The muddled thinking of the left on display again. No wonder Labour are so f##ked in the polls.

    • higherstandard 4.1
      10 May 2011 at 8:22 am

      As usual National and Labour tinker around the edges and change nothing..

      How about some discussion of big ideas Mr/Ms MP and media like capital gains tax, universal benefit as posited by Gareth Morgan, Flat tax etc…… instead the public gorge on the Hone and don side show and Labour and National argue over the merits of helicopters and paint jobs and smiling and waving and the political bloggers all fap fap fap along for the ride.

      Truly we are fucked.

      • terryg 4.1.1
        10 May 2011 at 10:08 am

        HigherStandard, alas you are not wrong. WTF is wrong with Labour? do they even read The Standard? Is John Pagani still calling the shots? Has the Labour suffered cabin depressurisation? It sure looks like everyone is asleep and the plane is about to crash.

        Burt, if you want to swear, then fucking swear. Writing f##ked doesnt fool anyone, all you are really doing is making others swear for you.

    • Lanthanide 4.2
      10 May 2011 at 10:25 am

      I have to say, I am much more in favour of tax redistribution going via tax credits for kiwisaver contributions than I am for tax redistribution going purely to fund welfare schemes.
      No, I’m not anti-welfare and in no way am I proposing that we replace welfare payments with kiwisaver contributions, but the potential for misuse of the money (which does happen, even if it is only by a very small number of people) is significantly reduced if the money is locked up until the recipient turns 65.

      • terryg 4.2.1
        10 May 2011 at 11:08 am

        Lanthanide, I have to agree with you. Otherwise when those people reach retirement age they will have nothing and the state will have to step in anyway. We really suck at saving. me included.

  5. Anthony 5
    10 May 2011 at 8:02 am

    It’s a bit of a betrayal really. The incentives were the main attraction to Kiwisaver and made up for the loss of access to your money.

    I also thought the $20 was really the only contribution my generation would actually get for superannuation as there will be no money left when we retire

    Thanks again baby boomers.

    • burt 5.1
      10 May 2011 at 8:12 am

      Anthony

      Don’t thank the baby boomers… Thank the Labour govt. They are the ones who started the whole cradle to the grave mentality that resulted in the baby boomers believing the govt that if they paid high tax while working they would be looked after in retirement. Generations of “nobody shall have too much and nobody too little” mentality believed the govt… who’s fault is that ?

      • Blighty 5.1.1
        10 May 2011 at 8:35 am

        “nobody shall have too much and nobody too little” mentality

        – what’s wrong with that? It’s not unaffordable. Our GDP is $50,000 pa for each man, woman, and child. Yet most of that is concentrated in the hands of the few and 50% of adults have incomes below $28,000

      • Colonial Viper 5.1.2
        10 May 2011 at 9:04 am

        They are the ones who started the whole cradle to the grave mentality

        In a civilised society we would look after our citizens from the cradle to the grave, not abandon our children to live in poverty, let distressed teenage parents without means struggle along, give our new graduates good jobs so that they can stay in their home towns, and make sure our elderly were not eating catfood as a “lifestyle choice”.

        We are living in one of the richest countries in the world – it just so happens that the 100 richest NZ’ers control about $60B in assets while the rest of us (including you burt) are being told to fuck off and live like a serf.

        And you, stupidly, are backing a Government which is slanting the system even more to the rich pricks.

  6. Treetop 6
    10 May 2011 at 8:40 am

    Key could n’t even wait until after the election to gut Kiwisaver. He is just another Muldoon and this is not the first time I have stated this. Next on his list is WFF.

    The lies have come home to roost. Kiwi saver has been touched, WFF will be touched and GST has been increased. The way I see it is three strikes; this government are oblivious to what they campaigned on in 2008

    • Blue 6.1
      10 May 2011 at 8:59 am

      Of course they’re oblivious. It was all just lies to get them into Government, and they know that no one is going to hold them to account for all the broken promises.

      The sad thing is that Key is now in that sweet spot where he can pretty much do anything he likes, and people will vote for him anyway. They’ve bought the ‘Labour can’t win’ line and will cheerfully line up at the polls to vote for the guy who is screwing them over.

  7. Green Tea 7
    10 May 2011 at 9:24 am

    Seriously? Kiwisaver was always the precusor to the privatisation of superannuation.

  8. Alwyn 8
    10 May 2011 at 10:01 am

    You are quite wrong in your statement that Mary cannot get the $1040/annum contribution. If she continues to contribute at the rate of 4%, and that is what was the minimum under the Labour scheme she will still get the entire $1040. It is only if she chose, as the National Government allowed, not forced, her to do would the amount she gets drop to $800.
    At least try and get some of the basic facts right.

    • Lanthanide 8.1
      10 May 2011 at 10:11 am

      Yes, Alwyn is correct.

      She makes a top-up of $50 a week, for a total of $3,300 per year into Kiwisaver, well more than the $1042 tax credit and therefore she qualifies for the full $1042 tax credit each year.

      What you are outlining the post, with the tax credit being capped to 2%, was PROPOSED by National in the 2009 budget, however they ended up not implementing it due to the outcry.

      This only makes the rest of your maths worse, however:
      Mary loses $1042 a year in Kiwisaver and gains $12 a year in tax-free interest. Net result: -$1030 a year.
       
      Edit: Actually I see that the $50/week is “savings” contribution, not Kiwisaver. But based on the current system, she should be contributing up to $1042/year in kiwisaver so as to get the full benefit. This actually makes the numbers *even worse* as she gets less than $12/year tax free from interest as she’ll have less in the bank.

      Mary Holm (from Savings Working Group and kiwisaver expert) was on the radio this morning talking about what she thought the changes might be – capping the tax credit for people on higher incomes, or for people over the age of 40. She didn’t mention anything about inflation-guarding on bank deposits.

  9. Bill 9
    10 May 2011 at 11:00 am

    Isn’t Kiwi Saver a mechanism whereby I augment my oppressor’s ability to oppress me?

    • Blighty 9.1
      10 May 2011 at 11:18 am

      isn’t Kiwisaver a mechanism via which ordinary people can gain control and ownership of a slice of the economy’s capital, rather than simply being labour inputs?

      • Bill 9.1.1
        10 May 2011 at 11:38 am

        How do you conclude that control or ownership flow from Kiwi Saver contributions?

  10. M 10
    10 May 2011 at 11:06 am

    Kiwisaver is a farce as it’s predicated on future growth and growth is all but over as we’re at peak everything. I would never join KS as control of your money is not in your hands. If we end up with a steady state econmomy I think we’ll be damn lucky.

    At my work young people have joined KS in the hope of saving for a house and I hope they get their money out before it all crashes. If I were to say anything I would have the Cassandra experience so all I can do is sit back and watch it unfold.

    I believe there won’t be superannuation of any kind in the future because the money simply won’t be there and people will literally work until they drop – retirement in the human lifespan is a fairly recent phenomenum and I’m prepared to acknowledge there won’t be any golden retirement years for me – perhaps working fewer hours per week but still working, that’s if there are any jobs. One only has to look to the situation in the US where Social Security is on its last legs and states are bankrupt because of all the flash retirement schemes with massive annuities for the reitrees.

    • Lanthanide 10.1
      10 May 2011 at 12:27 pm

      I too believe that Kiwisaver probably isn’t going to work out in the long term. But at the same time, 2% of my income + 2% from the employer and up to 2% from the government in tax credits seems like quite a small amount for me to be saving, on the off-chance that the world doesn’t go to hell in a handbasket. Also, the money can be taken out for a home deposit or if you face a huge financial problem, which could easily be much sooner than when you turn 65.
       
      Gareth Morgan Kiwisaver (my provider) first and foremost look out to retain your wealth before growing it. That means they invest in shares that are more likely to weather a bad storm – and it shows when you look at their performance vs other providers during the 08-09 crash.
       
      So ultimately I see kiwisaver as a gamble. A pretty cheap one that may pay out great rewards in the long run, so I’ll take it.

      • aj 10.1.1
        10 May 2011 at 2:56 pm

        What I see missing from this thread is the word ‘Australia’ which has a far more encompassing super scheme.

        I guess if it isn’t going to ‘work out in the long term’ for us them it won’t for them? yeah, right.

        Meantime they have a massive pool of investment savings that we can only envy. Along with their wages. Until the Nat’s starting tinkering with Kiwisaver, most commentators agreed that we were doing baby steps in the right direction. Now the backsliding has reached the speed of light.

        If the saving public take the proposed changes lying down then I hold no hope for them, and personally I find the cavalier manner in which Key breaks promises quite amoral

  11. dave brown 11
    10 May 2011 at 11:44 am

    NZ’s productive sector? Ha Ha. Think of NZ as heading to Africa where China will own the mines, farms, and run the retail sector. Think Fiji. China will contract out some slave labour but bring in their own peripatetic managers and skilled workers. Key and Co run the local rentier regime wrapped in the flag and keeping crowd control. The All Blacks are THE bench mark for export performance. Aotearoa used to be a book entry in the multinationals accounts, now its no more than a blip on the HSBC money market screen. And you lot are talking taxation, savings, and the growing gap between rich and poor. Like mechanics who are working on the car as it plunges into the ravine. Great South Islands we are now called. And our big brothers will go to war over who should own us.

  12. Zaphod Beeblebrox 12
    10 May 2011 at 2:10 pm

    As I recall JK was promoting Kiwisaver funds as the buyers of our soon to be sold down SOE’s. If you take away any incentive for people to join Kiwisaver (as opposed to paying off their house) how is that going to ever happen?

    Looks like in order to retain our ownership in NZ SOE’s we will have to invest in a foreign equity fund in Australia, US or China- but then again so can everyone else on th planet.

  13. Kaplan 13
    10 May 2011 at 4:29 pm

    Yet another promise ready to be broken by this government
    I see there is a new group on the interwebs, hopefully it can generate some visibility and keep the issue live.
    Leave Kiwisaver Alone

    • PeteG 13.1
      10 May 2011 at 4:40 pm

      How much of this opposition to any changes is due to reasoned concern, and how much is due to pure selfishness?

      We don’t even know what changes are being proposed yet.

      • Zaphod Beeblebrox 13.1.1
        10 May 2011 at 5:11 pm

        Lets face it. Its bad policy to reduce our savings when we desperately need to save more and we need local capital for our businesses. That way assets stay in NZ and the profits don’t get exported. Even Key recognised this when he suggested that KiwiSaver funds could help purchase some of our SOEs. Or are you going to argue against that?

        • PeteG 13.1.1.1
          10 May 2011 at 5:28 pm

          I won’t argue against that. But it ‘s also bad policy to borrow money to put into savings.

          • KJT 13.1.1.1.1
            10 May 2011 at 5:42 pm

            It is also bad policy to cut Government income by cutting taxes to the well off.

          • lprent 13.1.1.1.2
            10 May 2011 at 5:51 pm

            It is also bad policy to pay for tax-cuts by borrowing.

            That was quite evidently going to happen well prior to the election. Hell – I was warning that was the likely result to Cullen’s tax cuts when those were announced (the economic horizon looked pretty dark even then)..

            Tax cuts are just about the worst possible way to pump a stimulus into the economy. But for some reason these morons seem to think that it is preferable to borrow for a lousy lousy stimulus. It isn’t like any of the tax cuts appear to be going into productive investments.

            Now they want to see how much damage they can do to the private savings programmes as well.

            • PeteG 13.1.1.1.2.1
              10 May 2011 at 6:00 pm

              It’s also bad policy to let effective tax rates keep creeping up for eight years.

              It isn’t like any of the tax cuts appear to be going into productive investments.

              Do you know that? Would things be better or worse now if the Labour tax cuts were cancelled and National didn’t change them?

            • MrSmith 13.1.1.1.2.2
              10 May 2011 at 8:52 pm

              But isn’t Billy goat (sorry PeteG) Billy English promising us a saving based recovery ?????  Billy goat said “Savings-based recovery set to pick up in 2011” I recall, can’t wait, booking my tickets for Fiji tomorrow

          • Zaphod Beeblebrox 13.1.1.1.3
            10 May 2011 at 9:06 pm

            Not really.

            The money the government invests encourages individuals to save. Instead of putting it into property, boats, personal jewelry it goes into kiwi companies and infrastructure which means less borrowing from o/s and less profit flow off shore.

            Its also anti-inflationary as the money is not spent straight away so demand is not spiked nor does it contribute to property bubbles. The money doesn’t just disappear into thin air like a foreign holiday or in a property boom.

            The Australians worked all this out 20 years ago. Look at their managed funds portfolios. It invests all over the world (incl NZ) bringing profits back to Australia and reducing their current account deficit. Singapore does even better. Do you see the Australian government pulling back on Superannuation because they have a deficit at the moment? No way- they want to see everybody self-sufficient in retirement as they don’t want the government indebted to future retirees when the baby boomers retire.

            The current crowd in charge of running our country have no concept of the future, no understanding that in a growing economy you need debt to grow some more and no thought for the hole they are creating for the next generation. They think reducing governemnt debt is all they have to do. Then the free market fairies will spread pixie dust over NZ and everything will be OK.

        • burt 13.1.1.2
          10 May 2011 at 7:24 pm

          Simple question: Do you need tax payers money given to you so you can save ?

          • IrishBill 13.1.1.2.1
            10 May 2011 at 7:28 pm

            For many Kiwis the answer is yes. Hint: it’s because the wages are so too low to live and save.

            Of course we could always introduce an award system like Australia has and then add a substantial compulsory employer superannuation system like Australia has and then wages and saving would be just fine.

            I’m sure you’d prefer a system like that, eh Burt?

            • burt 13.1.1.2.1.1
              10 May 2011 at 7:31 pm

              IrishBill

              What a mess socialism has made eh. Tax the low earners hard and recycle it back to them so they can save…. Did you lovers of nanny state think of the long term consequences when you swallowed the bait and followed the lolly scramble ?

              • Zaphod Beeblebrox …
                10 May 2011 at 9:13 pm

                Encouraging individuals to save is not socialism. Socialism is the government buying businesses and the means of production like err Finance Companies like SCF, Insurance Companies like AMI and starting their own irrigation schemes like announced today. If you don’t like Socialism (fair enough too) complain about the real Socialists.

              • Colonial Viper …
                10 May 2011 at 9:51 pm

                burt has no idea what socialism is

                Except socialism for the wealthy of course.

                • felix …
                  10 May 2011 at 10:30 pm

                  Poor old burt experienced the jackboot of socialist oppression in the 1970s when the Cook Strait stewards went on strike and ruined his holiday.

                  Never set foot on a boat again. Never forget.

          • PeteG 13.1.1.2.2
            10 May 2011 at 7:35 pm

            Do you need tax payers money given to you so you can save ?

            I do. Without another significant dollop of outside contribution I’d be better off paying more off my mortgage. If the MTC drops too much I will probably take a KiwiSaver holiday – if I can negotiate my employer contribution into a salary rise.

            • burt 13.1.1.2.2.1
              10 May 2011 at 7:37 pm

              So rather than do what is fiscally responsible and focus on reducing your debt you happily accept other peoples money now for your future life style – for the time you will have a freehold house and savings courtesy of yesterdays tax payers. That, in my book, puts you in the same category as a person who could work but chooses not to.

              • PeteG …
                10 May 2011 at 7:46 pm

                I think I was going to be able to divert some of my KiwiSaver into paying off mortgage but National squashed that?

                If I still have any mortgage when I retire I’ll be able to pay it off with some of my KiwiSaver funds. It’s a reasonable risk to take to do it that way.

                The KiwiSaver MTC was a tax cut that wasn’t called a tax cut – Cullen wasn’t able to do “tax cuts” until Labour were staring down the barrel and out of ammunition. If I didn’t take my cut I’d miss out on something that others got. I think it is very different to choosing not to work, I still work, and I couldn’t live off $1043 per year.

                • burt …
                  10 May 2011 at 10:09 pm

                  Cullen could have given you a tax cut, instead he decided that paying of the countrys debt was a good trade off for increasing the consumer debt.

                  Cullen’s pluck the goose with the least amount of hissing ideology keep the take home wages low, it paid off the nations credit card while the sheeple low on cash lushed up on expanding property values and readily available consumer finance.

                  Hell half of the sheeple probably only noticed when filling out finance applications that the numbers kept getting bigger and bigger so they thought they were getting more wealthy. They probably missed the fact that the numbers were getting closer together rather than further apart.

                  Then the complete nob turns around and says he was a prudent financial manager when consumer finance levers are ridiculous, houses are over valued, the economy is stagnant, unemployment is growing and Treasury are forecasting a decade of deficits.

                  But hey, KiwiSaver isn’t making saving for retirement any more affordable, it’s just making it more rewarding than paying off your mortgage. Is this really appropriate use of tax payers money ?

                  • PeteG …
                    11 May 2011 at 7:08 am

                    I think some incentive to get people to save is good, but I always thought KiwiSaver was too generous when it started, that’s been proven by the much larger than expected uptake.

                    And there should be more options for mortgage diversion and buying a house.

                    CV won’t be bothering me, usually too over the top to be taken seriously – as much chance of his preferences getting anywhere near happening as the Mana party.

                • burt …
                  10 May 2011 at 10:28 pm

                  Actually PeteG, if I were you I would be watching my back for Colonial Viper about now. CV will be cooking up a storm about you being a rich prick who was able to rearrange your affairs such that you could reduce the actual tax you paid at the expense of the masses who can’t afford a mortgage.

  14. Tim 14
    10 May 2011 at 5:13 pm

    I guess we are going to catch Australia by not implementing any of their policies.

    This is what I don’t get about the right. They stand in a stadium and tell us this number of young people are heading to Australia, but then do everything they can to implement policies that are so different from what you would receive in Australia. Are they really that thick? Surely not?

    • KJT 14.1
      10 May 2011 at 5:26 pm

      Of course they are not thick.
      All they want is a second term so they can continue with the robbery of the 80’s and 90’s. When there is nothing left to steal then they will let the left back in to build it all up again. So they can steal it all again 9 years down the track.

  15. burt 15
    10 May 2011 at 7:26 pm

    In breaking news: Key announces that the changes to KiwiSaver are to make it the same as the MPs super scheme. Every $ you contribute will be matched with $6 from the gummit.

  16. Rob 16
    10 May 2011 at 10:01 pm

    Correct me if I am wrong with those saying Kiwisaver predominantly favours the rich. Doesn’t the cap in the level of incentive at $1040 mean that actually all of those who earn less than the cap are more favoured than those above? Anyone saving over 1k a year in Kiwisaver doesn’t actually get much extra benefit for that extra cash saved.

    • Lanthanide 16.1
      10 May 2011 at 10:10 pm

      It’s pretty simple. Who is most able to take advantage of the $1042 tax credits per year, given that you have to contribute at least $1042 in a year to get them?

      Someone earning $20,000/year, or someone earning $200,000/year?

Recent Comments

Recent Posts

  • Anzac Commemorative Address – NZ National Service, Chunuk Bair
    Distinguished guests -   It is an honour to return once again to this site which, as the resting place for so many of our war-dead, has become a sacred place for generations of New Zealanders.   Our presence here and at the other special spaces of Gallipoli is made ...
    BeehiveBy beehive.govt.nz
    5 hours ago

  • Anzac Commemorative Address – Dawn Service, Gallipoli, Türkiye
    Mai ia tawhiti pamamao, te moana nui a Kiwa, kua tae whakaiti mai matou, ki to koutou papa whenua. No koutou te tapuwae, no matou te tapuwae, kua honoa pumautia.   Ko nga toa kua hinga nei, o te Waipounamu, o te Ika a Maui, he okioki tahi me o ...
    BeehiveBy beehive.govt.nz
    11 hours ago

  • PM announces changes to portfolios
    Paul Goldsmith will take on responsibility for the Media and Communications portfolio, while Louise Upston will pick up the Disability Issues portfolio, Prime Minister Christopher Luxon announced today. “Our Government is relentlessly focused on getting New Zealand back on track. As issues change in prominence, I plan to adjust Ministerial ...
    BeehiveBy beehive.govt.nz
    2 days ago

  • New catch limits for unique fishery areas
    Recreational catch limits will be reduced in areas of Fiordland and the Chatham Islands to help keep those fisheries healthy and sustainable, Oceans and Fisheries Minister Shane Jones says. The lower recreational daily catch limits for a range of finfish and shellfish species caught in the Fiordland Marine Area and ...
    BeehiveBy beehive.govt.nz
    2 days ago

  • Minister welcomes hydrogen milestone
    Energy Minister Simeon Brown has welcomed an important milestone in New Zealand’s hydrogen future, with the opening of the country’s first network of hydrogen refuelling stations in Wiri. “I want to congratulate the team at Hiringa Energy and its partners K one W one (K1W1), Mitsui & Co New Zealand ...
    BeehiveBy beehive.govt.nz
    2 days ago

  • Urgent changes to system through first RMA Amendment Bill
    The coalition Government is delivering on its commitment to improve resource management laws and give greater certainty to consent applicants, with a Bill to amend the Resource Management Act (RMA) expected to be introduced to Parliament next month. RMA Reform Minister Chris Bishop has today outlined the first RMA Amendment ...
    BeehiveBy beehive.govt.nz
    3 days ago

  • Overseas decommissioning models considered
    Overseas models for regulating the oil and gas sector, including their decommissioning regimes, are being carefully scrutinised as a potential template for New Zealand’s own sector, Resources Minister Shane Jones says. The Coalition Government is focused on rebuilding investor confidence in New Zealand’s energy sector as it looks to strengthen ...
    BeehiveBy beehive.govt.nz
    3 days ago

  • Release of North Island Severe Weather Event Inquiry
    Emergency Management and Recovery Minister Mark Mitchell has today released the Report of the Government Inquiry into the response to the North Island Severe Weather Events. “The report shows that New Zealand’s emergency management system is not fit-for-purpose and there are some significant gaps we need to address,” Mr Mitchell ...
    BeehiveBy beehive.govt.nz
    3 days ago

  • Justice Minister to attend Human Rights Council
    Justice Minister Paul Goldsmith is today travelling to Europe where he’ll update the United Nations Human Rights Council on the Government’s work to restore law and order.  “Attending the Universal Periodic Review in Geneva provides us with an opportunity to present New Zealand’s human rights progress, priorities, and challenges, while ...
    BeehiveBy beehive.govt.nz
    3 days ago

  • Patterson reopens world’s largest wool scouring facility
    Associate Agriculture Minister, Mark Patterson, formally reopened the world’s largest wool processing facility today in Awatoto, Napier, following a $50 million rebuild and refurbishment project. “The reopening of this facility will significantly lift the economic opportunities available to New Zealand’s wool sector, which already accounts for 20 per cent of ...
    BeehiveBy beehive.govt.nz
    3 days ago

  • Speech to the Southland Otago Regional Engineering Collective Summit, 18 April 2024
    Hon Andrew Bayly, Minister for Small Business and Manufacturing  At the Southland Otago Regional Engineering Collective (SOREC) Summit, 18 April, Dunedin    Ngā mihi nui, Ko Andrew Bayly aho, Ko Whanganui aho    Good Afternoon and thank you for inviting me to open your summit today.    I am delighted ...
    BeehiveBy beehive.govt.nz
    3 days ago

  • Government to introduce revised Three Strikes law
    The Government is delivering on its commitment to bring back the Three Strikes legislation, Associate Justice Minister Nicole McKee announced today. “Our Government is committed to restoring law and order and enforcing appropriate consequences on criminals. We are making it clear that repeat serious violent or sexual offending is not ...
    BeehiveBy beehive.govt.nz
    3 days ago

  • New diplomatic appointments
    Foreign Minister Winston Peters has today announced four new diplomatic appointments for New Zealand’s overseas missions.   “Our diplomats have a vital role in maintaining and protecting New Zealand’s interests around the world,” Mr Peters says.    “I am pleased to announce the appointment of these senior diplomats from the ...
    BeehiveBy beehive.govt.nz
    4 days ago

  • Humanitarian support for Ethiopia and Somalia
    New Zealand is contributing NZ$7 million to support communities affected by severe food insecurity and other urgent humanitarian needs in Ethiopia and Somalia, Foreign Minister Rt Hon Winston Peters announced today.   “Over 21 million people are in need of humanitarian assistance across Ethiopia, with a further 6.9 million people ...
    BeehiveBy beehive.govt.nz
    4 days ago

  • Arts Minister congratulates Mataaho Collective
    Minister for Arts, Culture and Heritage Paul Goldsmith is congratulating Mataaho Collective for winning the Golden Lion for best participant in the main exhibition at the Venice Biennale. "Congratulations to the Mataaho Collective for winning one of the world's most prestigious art prizes at the Venice Biennale.  “It is good ...
    BeehiveBy beehive.govt.nz
    4 days ago

  • Supporting better financial outcomes for Kiwis
    The Government is reforming financial services to improve access to home loans and other lending, and strengthen customer protections, Commerce and Consumer Affairs Minister Andrew Bayly and Housing Minister Chris Bishop announced today. “Our coalition Government is committed to rebuilding the economy and making life simpler by cutting red tape. We are ...
    BeehiveBy beehive.govt.nz
    5 days ago

  • Trade relationship with China remains strong
    “China remains a strong commercial opportunity for Kiwi exporters as Chinese businesses and consumers continue to value our high-quality safe produce,” Trade and Agriculture Minister Todd McClay says.   Mr McClay has returned to New Zealand following visits to Beijing, Harbin and Shanghai where he met ministers, governors and mayors and engaged in trade and agricultural events with the New ...
    BeehiveBy beehive.govt.nz
    5 days ago

  • PM’s South East Asia mission does the business
    Prime Minister Christopher Luxon has completed a successful trip to Singapore, Thailand and the Philippines, deepening relationships and capitalising on opportunities. Mr Luxon was accompanied by a business delegation and says the choice of countries represents the priority the New Zealand Government places on South East Asia, and our relationships in ...
    BeehiveBy beehive.govt.nz
    6 days ago

  • $41m to support clean energy in South East Asia
    New Zealand is demonstrating its commitment to reducing global greenhouse emissions, and supporting clean energy transition in South East Asia, through a contribution of NZ$41 million (US$25 million) in climate finance to the Asian Development Bank (ADB)-led Energy Transition Mechanism (ETM). Prime Minister Christopher Luxon and Climate Change Minister Simon Watts announced ...
    BeehiveBy beehive.govt.nz
    6 days ago

  • Minister releases Fast-track stakeholder list
    The Government is today releasing a list of organisations who received letters about the Fast-track applications process, says RMA Reform Minister Chris Bishop. “Recently Ministers and agencies have received a series of OIA requests for a list of organisations to whom I wrote with information on applying to have a ...
    BeehiveBy beehive.govt.nz
    6 days ago

  • Judicial appointments announced
    Attorney-General Judith Collins today announced the appointment of Wellington Barrister David Jonathan Boldt as a Judge of the High Court, and the Honourable Justice Matthew Palmer as a Judge of the Court of Appeal. Justice Boldt graduated with an LLB from Victoria University of Wellington in 1990, and also holds ...
    BeehiveBy beehive.govt.nz
    6 days ago

  • Education Minister heads to major teaching summit in Singapore
    Education Minister Erica Stanford will lead the New Zealand delegation at the 2024 International Summit on the Teaching Profession (ISTP) held in Singapore. The delegation includes representatives from the Post Primary Teachers’ Association (PPTA) Te Wehengarua and the New Zealand Educational Institute (NZEI) Te Riu Roa.  The summit is co-hosted ...
    BeehiveBy beehive.govt.nz
    7 days ago

  • Value of stopbank project proven during cyclone
    A stopbank upgrade project in Tairawhiti partly funded by the Government has increased flood resilience for around 7000ha of residential and horticultural land so far, Regional Development Minister Shane Jones says. Mr Jones today attended a dawn service in Gisborne to mark the end of the first stage of the ...
    BeehiveBy beehive.govt.nz
    7 days ago

  • Anzac commemorations, Türkiye relationship focus of visit
    Foreign Affairs Minister Winston Peters will represent the Government at Anzac Day commemorations on the Gallipoli Peninsula next week and engage with senior representatives of the Turkish government in Istanbul.    “The Gallipoli campaign is a defining event in our history. It will be a privilege to share the occasion ...
    BeehiveBy beehive.govt.nz
    7 days ago

  • Minister to Europe for OECD meeting, Anzac Day
    Science, Innovation and Technology and Defence Minister Judith Collins will next week attend the OECD Science and Technology Ministerial conference in Paris and Anzac Day commemorations in Belgium. “Science, innovation and technology have a major role to play in rebuilding our economy and achieving better health, environmental and social outcomes ...
    BeehiveBy beehive.govt.nz
    7 days ago

  • Comprehensive Partnership the goal for NZ and the Philippines
    Prime Minister Christopher Luxon held a bilateral meeting today with the President of the Philippines, Ferdinand Marcos Jr.  The Prime Minister was accompanied by MP Paulo Garcia, the first Filipino to be elected to a legislature outside the Philippines. During today’s meeting, Prime Minister Luxon and President Marcos Jr discussed opportunities to ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Government commits $20m to Westport flood protection
    The Government has announced that $20 million in funding will be made available to Westport to fund much needed flood protection around the town. This measure will significantly improve the resilience of the community, says Local Government Minister Simeon Brown. “The Westport community has already been allocated almost $3 million ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Taupō takes pole position
    The Government is proud to support the first ever Repco Supercars Championship event in Taupō as up to 70,000 motorsport fans attend the Taupō International Motorsport Park this weekend, says Economic Development Minister Melissa Lee. “Anticipation for the ITM Taupō Super400 is huge, with tickets and accommodation selling out weeks ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Cost of living support for low-income homeowners
    Local Government Minister Simeon Brown has announced an increase to the Rates Rebate Scheme, putting money back into the pockets of low-income homeowners.  “The coalition Government is committed to bringing down the cost of living for New Zealanders. That includes targeted support for those Kiwis who are doing things tough, such ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Government backing mussel spat project
    The Coalition Government is investing in a project to boost survival rates of New Zealand mussels and grow the industry, Oceans and Fisheries Minister Shane Jones has announced. “This project seeks to increase the resilience of our mussels and significantly boost the sector’s productivity,” Mr Jones says. “The project - ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Government focused on getting people into work
    Benefit figures released today underscore the importance of the Government’s plan to rebuild the economy and have 50,000 fewer people on Jobseeker Support, Social Development and Employment Minister Louise Upston says. “Benefit numbers are still significantly higher than when National was last in government, when there was about 70,000 fewer ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Clean energy key driver to reducing emissions
    The Government’s commitment to doubling New Zealand’s renewable energy capacity is backed by new data showing that clean energy has helped the country reach its lowest annual gross emissions since 1999, Climate Change Minister Simon Watts says. New Zealand’s latest Greenhouse Gas Inventory (1990-2022) published today, shows gross emissions fell ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Earthquake-prone buildings review brought forward
    The Government is bringing the earthquake-prone building review forward, with work to start immediately, and extending the deadline for remediations by four years, Building and Construction Minister Chris Penk says. “Our Government is focused on rebuilding the economy. A key part of our plan is to cut red tape that ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Thailand and NZ to agree to Strategic Partnership
    Prime Minister Christopher Luxon and his Thai counterpart, Prime Minister Srettha Thavisin, have today agreed that New Zealand and the Kingdom of Thailand will upgrade the bilateral relationship to a Strategic Partnership by 2026. “New Zealand and Thailand have a lot to offer each other. We have a strong mutual desire to build ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Government consults on extending coastal permits for ports
    RMA Reform Minister Chris Bishop and Transport Minister Simeon Brown have today announced the Coalition Government’s intention to extend port coastal permits for a further 20 years, providing port operators with certainty to continue their operations. “The introduction of the Resource Management Act in 1991 required ports to obtain coastal ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Inflation coming down, but more work to do
    Today’s announcement that inflation is down to 4 per cent is encouraging news for Kiwis, but there is more work to be done - underlining the importance of the Government’s plan to get the economy back on track, acting Finance Minister Chris Bishop says. “Inflation is now at 4 per ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • School attendance restored as a priority in health advice
    Refreshed health guidance released today will help parents and schools make informed decisions about whether their child needs to be in school, addressing one of the key issues affecting school attendance, says Associate Education Minister David Seymour. In recent years, consistently across all school terms, short-term illness or medical reasons ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Unnecessary bureaucracy cut in oceans sector
    Oceans and Fisheries Minister Shane Jones is streamlining high-level oceans management while maintaining a focus on supporting the sector’s role in the export-led recovery of the economy. “I am working to realise the untapped potential of our fishing and aquaculture sector. To achieve that we need to be smarter with ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Patterson promoting NZ’s wool sector at International Congress
    Associate Agriculture Minister Mark Patterson is speaking at the International Wool Textile Organisation Congress in Adelaide, promoting New Zealand wool, and outlining the coalition Government’s support for the revitalisation the sector.    "New Zealand’s wool exports reached $400 million in the year to 30 June 2023, and the coalition Government ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Removing red tape to help early learners thrive
    The Government is making legislative changes to make it easier for new early learning services to be established, and for existing services to operate, Associate Education Minister David Seymour says. The changes involve repealing the network approval provisions that apply when someone wants to establish a new early learning service, ...
    BeehiveBy beehive.govt.nz
    1 week ago

Page generated in The Standard by Wordpress at 2024-04-25T13:24:08+00:00