KASPANZ MEMBERS NEWSHEET 27: 2022 Kiwi saver |Annuity /Superannuation| Protection Association of NZ.
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EDITORIAL
The Tax Payer Union and the NZ Initiative are two loud voices on the NZ business and political scene. Both have one thing in common, they emerged from the Business Round-table. I remember Roger Kerr from decades back, their chairman, denying the existence of global warming.
Both organisations have strong National party connections and can be labelled conservative. The Tax payer union favours raising the age of entitlement to New Zealand Superannuation, means testing etc. It ignores the quality research that NZ Super is a very solid piece of retirement income Policy, and no alternatives suggested, match the quality of the current offering. David Farrar, Tax payer Union, with a background of involvement with the National Party, is also the primary face, behind the Taxpayer Curia Poll.
The NZ Initiative has been involved in a number of Podcasts or similar on Superannuation and produced an interesting article in 2020 https://www.nzinitiative.org.nz/reports-and-media/reports/embracing-a-super-model-the-superannuation-sky-is-not-falling/The Tax Payers Union addresses some interesting issues, unfortunately allowing its right-wing leanings, too often, to the detriment of the issue addressed.
The NZ Initiative is a more balanced organisation with solid research impetus, noting its conservative leanings. What does Wikipedia https://en.wikipedia.org/wiki/Main_Pagesay about each organisation
New Zealand Taxpayers’ Union | |
Logo of the Taxpayers’ Union | |
Abbreviation | NZTU |
Formation | October 2013 |
Type | Pressure group |
Legal status | Incorporated society |
Headquarters | Wellington |
Executive Director | Jordan Williams |
Budget | $1 million per year |
Staff | 10 (2021) |
Website | www.taxpayers.org.nz |
The New Zealand Taxpayers’ Union is a self-described taxpayer pressure group founded in 2013 to scrutinize government spending, publicize government waste and promote an efficient tax system.[1] It claims to be politically independent and not aligned to, or intended to develop into, a political party.[2]
However, the group refuses to state who funds them and generally refuses requests to speak with media about this. In 2019 it was reported the group has been funded in part by British American Tobacco.[3] This, along with their close ties to many right-wing figures from the New Zealand political scene (see below), has resulted in them being widely regarded as a right-wing pressure group.
Personnel
The group was first chaired, for four years, by John Bishop,[7] a former Television New Zealand political editor, and father of National Party list MP Chris Bishop. He was succeeded by Barrie Saunders, who held the chair for three years from 2017[7] to 2021. Ashley Church, a director of the Israel Institute of New Zealand[8] and a former CEO of the Property Institute of New Zealand, was invited onto the Board in 2020[9] and became its chairperson in 2021, but stepped down after five months.
The group’s co-founder and Executive Director is Wellington lawyer Jordan Williams. Williams is known for fronting the ‘Vote for Change’ campaign during the 2011 referendum on New Zealand’s voting system. Williams previously worked at the law firm of former ACT MP Stephen Franks. Williams was involved in a series of lawsuits over defamation with the then leader of the Conservative Party of New Zealand Colin Craig. In 2019 Williams apologized to Craig for defamation and Williams dropped his counter-suit. [10]
David Farrar co-founded the group and sits on its Board of Directors. Farrar continued to be heavily involved in the then National Government’s campaign activities, as its pollster and was described by Prime Minister John Key as “the best pollster in New Zealand” during his victory speech on election night 2011.[11] Farrar describes himself as “very pro economic liberalism”, and has stated that the Taxpayers’ Union is not “anti-left or right” and “I suspect we will somewhat annoy whoever is in government at the time”.[12]Activities
The Taxpayers’ Union initiatives include public relations campaigns and paid advertising. Campaigns are intended to generate media interest and greater public involvement and support for fiscally conservative causes.
Its major campaigns have included reports on corporate welfare by the John Key-led government, commissioning independent costings of the election promises of all the major political parties during the 2014 election, and league tables comparing the performance of local government organizations.
In January 2014, the group released internal ACC documents suggesting that $19 million awarded to the New Zealand Council of Trade Unions and Business New Zealand had been wasted.[13] Soon afterward the scheme was scrapped.[14]
In June 2014 the group partnered with Fairfax Media to produce local government league tables, labeled “The Ratepayers’ Report”.[15]
The group operates a confidential ‘tip line’ for members of the public and government officials to report examples of government waste.[16]
Controversies
Use of false identities
In October 2018, The New Zealand Herald revealed the results of an investigation into the Taxpayers’ Union, showing that staff members acting on behalf of the organization (and in an organized campaign) assumed false identities to lodge Official Information Act requests with the New Zealand Government’s science research agency. After refusing to comment for two days, representatives from the Union admitted they had used false identities in this way. The Herald investigation found that all of the email accounts used for the requests were linked to one particular email address of a Taxpayers’ Union staff member by way of account recovery processes.
The Union claimed the reason for the use of the email accounts was to successfully obtain information from the science agency, which they said “de-prioritized” requests from them, and defended its actions as justified and in the public interest.[18]
However, in the interview with Guyon Espiner where Union head Jordan Williams made that claim, and also claimed that the information came from “within Callaghan Innovation”, he provided no supporting evidence for either claim. During the response segment of the same interview, Chair of Callaghan Innovation Pete Hodgson pointed out that in the year ending June 2018 Callaghan Innovation received 26 requests they knew to be from the Union, and 14 they suspected were from the Union but that did not use the Union’s name. All of these were responded to within the legal time limits. Hodgson pointed out that Callaghan met these legal time limits 94% of the time for general requests in the same year, so the Union received slightly better service than New Zealand as a whole.
In response to a direct question from Espiner about whether Callaghan had ever stalled the Taxpayer’s Union on a request they had made, Hodgson responded “No the opposite, we met the request on every occasion at some considerable expense. Our running cost for this…is just over $103,000. There has been a huge effort by Callaghan to respond to this blizzard of requests and it’s all been done within the legal time.”
- A long list of references pertaining to the above article are on the Wikipedia website
The New Zealand Initiative | |
Formation | April 1, 2012; 9 years ago, |
Type | Think tank |
Legal status | Limited company |
Location | |
Executive Director | Oliver Hartwich |
Chairman | Roger Partridge |
Website | nzinitiative.org.nz |
The New Zealand Initiative is a pro-free-market public-policy think tank and business membership organization in New Zealand.[1] It was formed in 2012 by merger of the New Zealand Business Roundtable (NZBR) and the New Zealand Institute.[2] The Initiative’s main areas of focus include economic policy, housing, education, local government, welfare, immigration and fisheries. Economist Oliver Hartwich has been the executive director of The Initiative since its formation in 2012.
Background
The New Zealand Initiative’s predecessor organizations were both business membership organizations. The Wellington-based Business Roundtable, founded by Roger Kerr in 1986, was among the main proponents of New Zealand’s liberal economic reforms of the 1980s and 1990s.[3] To that end, the Business Roundtable produced a wide range of publications (books, reports, submissions) and undertook other activities that informed and influenced public debate.[4]
The New Zealand Institute was established in Auckland in 2004. Like the Business Roundtable, the New Zealand Institute was a business membership organization that operated as a think tank, albeit with a more centrist political tilt. Some members of the Business Roundtable moved their support to the New Zealand Institute.
By 2011, according to New Zealand Institute chairman Tony Carter, the organization lacked scale. Carter approached Business Roundtable chairman Roger Partridge and raised the possibility of merging the two organizations. The merger discussions were successful and the New Zealand Initiative was launched in April 2012, with Partridge and Carter as co-chairs. Hartwich was appointed its first executive director.[5]
Organization
The New Zealand Initiative is based in Wellington. It is a limited company, governed by a board of directors under a constitution.[6][7] It is one of the three biggest think tanks in New Zealand, the other two being the New Zealand Institute of Economic Research (NZIER) and Business and Economic Research (BERL).[1]
The membership of The New Zealand Initiative comprises about 70 members, mainly large New Zealand companies.[8] According to the Initiative’s Annual Report 2016, the combined revenue of its members equals a quarter of the New Zealand economy.[9]
The chief editor of the New Zealand Initiative, Nathan Smith, resigned from the position in December 2020 after news reports emerged that he was the author of a far-right blog. In this blog he said, amongst other things, that the media controls people’s thoughts and authors lengthy posts tying together “Muslim rape gangs” and incel ideology.[10] Hartwich said that these views were “abhorrent” and had no place at the New Zealand Initiative.[10]
On its website, The New Zealand Initiative says its mission is “to help create a competitive, open and dynamic economy and a free, prosperous, fair, and cohesive society”[12] and describes itself as “strictly non-partisan.” It takes a more free-market perspective than the NZIER or BERL.[1]
Apart from its research activities, the New Zealand Initiative hosts a range of events. These include public forums, panel discussions, an annual debating tournament for university students, as well as events for its members.[13] In May 2017, The Initiative organized a study tour of Switzerland for more than 30 senior New Zealand business leaders.[14]
Among the speakers hosted by The New Zealand Initiative are New Zealand Prime Ministers John Key and Bill English, Leaders of the Labour Party David Shearer, David Cunliffe and Andrew Little, former Australian Prime Minister John Howard, former British Trade Secretary Peter Lilley as well as members of all parties represented in the New Zealand Parliament.
The New Zealand Initiative released Manifesto 2017: What the next New Zealand Government Should Do, an overview of its policy recommendations from its first five years, in the lead-up to the 2017 general election.[15]
Policy positions and public reception
Education: The New Zealand Initiative has called for the performance measurement and management of teachers in New Zealand schools, a proposal that was cautiously welcomed by education minister Nikki Kaye and rejected by the teachers’ union PPTA.[16] In an earlier report, the Initiative had criticized the New Zealand government for introducing new teaching methods in mathematics that led to worsening numeracy of students.[17]
Housing and local government: According to business columnist Patrick Smellie in 2017, The New Zealand Initiative’s main contribution to the housing debate was to point out the factors that were limiting housing supply: Along with high immigration, a sub-scale building industry, and dysfunctional planning law, the incentives for local councils to discourage rather than compete for new citizens was a big part of why Auckland’s housing crisis existed. The NZ Initiative had been pointing out these growth-limiting settings almost since its creation five years earlier.[18]
In November 2015, Hartwich and the Labour Party’s housing spokesperson Phil Twyford published a joint opinion piece advocating the abolition of height and density controls, infrastructure bonds, and an end to the rural-urban boundary.[19] The article was interpreted as a shift from traditional Labour positions on land-use planning[20] and regarded by international commentators as a sign of a new emerging consensus on housing policy.[21]
The New Zealand Initiative’s proposal to establish Special Economic Zones across New Zealand was supported by Wellington Mayor Justin Lester and Malcolm Alexander, chief executive of Local Government New Zealand.[22] Government papers released under the Official Information Act revealed that cabinet ministers were considering the Initiative’s proposals.[23]
In a 2013 Initiative report, co-authored by former cabinet minister Michael Bassett, the Initiative proposed funding residential infrastructure through targeted rates in special purpose vehicles.[24] The New Zealand government introduced such a scheme in July 2017 when it charged Crown Infrastructure Partners with this task.[25]
Foreign direct investment: The New Zealand Initiative promotes the deregulation of New Zealand’s restrictions on overseas investors,[26] a position which attracted fierce criticism from New Zealand First leader Winston Peters.[27]
Fisheries management: Based on comparative research, the Initiative proposed to establish a new agency to represent recreational fishing interests, modelled on the Western Australian body Recfishwest.[28] The proposal was rejected by fishing advocacy group Lega Sea.[29]
Immigration: In its immigration report, the New Zealand Initiative defended New Zealand’s liberal immigration policy,[30] arguing that migrants contribute positively to the economy and integrate well into New Zealand society.[31] Winston Peters rejected the Initiative’s findings as “academic gobbledygook”[32] and attacked the Initiative for being a thinktank run by foreigners.[33] The Labour Party’s Immigration spokesperson Iain Lees-Galloway welcomed the report while criticizing its alleged ignorance of migrants’ infrastructure needs.[34]
Social policy: The Initiative supported the Key/English government’s ‘Social Investment Approach,’[35] including the introduction of Social Impact Bonds.[36] It has also argued that concerns about the recent rise of economic inequality were driven by rising house prices while income inequality in New Zealand had remained constant since the 1990s.[37]
Claire Dale details a coming storm for New Zealand’s future retirees: Still renting and not enough savings to avoid poverty 31st Mar 22, 12:07pm
By Claire Dale*
A large number of New Zealanders are facing a perfect storm at retirement, with minimal savings and no house, raising the risk that thousands will enter old age in poverty. According to the latest retirement expenditure guidelines from Massey University, a two-person retiree household living an urban “choices” lifestyle, which includes some luxuries, would need to have saved $809,000. In the provinces, a couple would need to have saved $511,000. New Zealanders have traditionally relied on owning a home to support themselves during their retirement years. But many of the New Zealanders now aged between 50 and 65 – a cohort of almost half a million people – will go into retirement as renters after skyrocketing house prices over the last three decades put home ownership out of reach.
At the same time, this generation were already working adults when the Labour government introduced KiwiSaver in 2007, and are less likely to have a significant savings cushion. Then prime minister Helen Clark introduced KiwiSaver in 2007 as a way to address New Zealand’s low rate of savings. Last year, Treasury raised concerns that this mixed group of baby boomers and generation X will not be able to financially manage retirement on their own.
Declining home ownership
Home ownership in New Zealand has fallen to the lowest rate in 70 years, with just 65% of people living in houses they own, down from the peak of 74% in the 1990s. According to the 2018 Census, around one in four people between 50 and 65 don’t own the home they live in. Research by Kay Saville-Smith from the Centre for Research Evaluation and Social Assessment suggests that by 2053 almost half of over-65s would be renting. That would mean 640,000 over-65s renting, including 326,000 renters aged over 85.
This issue of declining home ownership disproportionately affects those who have remained on low incomes throughout their working life. This, in turn, has stark consequences for Māori and Pacific people in New Zealand. Between 1986 and 2013 the proportion of Māori and Pacific peoples living in owner occupied housing fell at a faster rate than the overall population (down 20% and 34.8%, respectively).
Skyrocketing rents Also, in the last five years nationwide rents have risen 28% across all property types and regions. High rents make it harder for New Zealanders to save for a house. For increasing numbers of people, housing – whether through ownership or renting – has become unaffordable. The rapidly increasing rental costs have also reduced the ability of people to save for their own home.
KiwiSaver came too late
In 2007, the government of the day set up KiwiSaver as a voluntary savings scheme to help New Zealanders save for their retirement and to lift New Zealand’s low national savings rate. But New Zealanders aged 50 to 64 were already adults and mid-career when KiwiSaver was launched. In our low-wage economy, they are likely to have contributed only 3% of wages, in addition to the employer’s 3%.While some will have used their KiwiSaver account plus the government subsidy to put a deposit on a home purchase, few will have saved a significant nest egg for retirement. The 2021 Financial Markets Authority KiwiSaver Report showed average balances of only $26,410.
Squeaking by on superannuation
There is some support for retirees. When a person reaches the qualifying age of 65 years, they receive New Zealand Superannuation, currently $437 per week after tax for a single person. But superannuation is predicated on owning your home rather than renting. Home ownership means effectively living rent free, with only rates and maintenance as regular necessary expenses in addition to food, power and phone. A couple looking to retire comfortably in the city in New Zealand would need to have $809,000 saved, while the same couple looking to retire in the provinces would need $511,000.
Those people renting are currently confronted by a median weekly rental for a small house or apartment of $390 per week. While they may also be able to access the accommodation supplement and temporary additional support to assist with costs, a new threat has emerged in the form of inflation. Consumer price index inflation peaked at close to 6.35% in early 2022, its highest level in three decades.
As well as steady increases in the price of electricity, petrol prices increased by 10% over the past year, and annual food prices rose 6.85% in February year-on-year. Fruit and vegetables are the largest contributors to the price rise. Car use can be contained with less recreational outings, but electricity, fruit and vegetables are needed for health.
None of this is going unnoticed. Treasury has raised the alarm about the increase of old age poverty. Many in the 50-65 age group share those concerns, and are approaching retirement with rational trepidation.
* Claire Dale, is a Research Fellow at the University of Auckland. This article is republished from The Conversation under a Creative Commons license.
More retirees sticking with KiwiSaver, report finds
APRIL 10, 2022
Dr Suzy Morrissey: Retirement Commission policy director
Over 5 per cent of KiwiSaver members are remaining in-scheme post the official retirement age, according to a new analysis by consultancy firm Melville Jessup Weaver (MJW). The MJW study prepared for the Retirement Commission found about “153,000 members (5.2%) are aged over 65, and appear to be using KiwiSaver as an investment vehicle in their retirement”.
“The proportion of females over the age of 65 which have KiwiSaver balances is slightly higher than the proportion of males (5.5% versus 5.1%),” the report says. Following recent legislation changes, over-65s are now allowed to join KiwiSaver – albeit without the benefits of compulsory employer contributions and annual government top-up via the member tax credit (MTC) system.
Whether the increase in the legal joining age has had much impact remains unclear, however, the 65-and-over cohort has grown steadily since 2016, according to Inland Revenue Department (IRD) figures.The IRD statistics show the number of KiwiSaver members aged 65 or more rose from almost 109,000 in June 2016 to well over 186,000 five years later.
All other age cohorts have increased during the same period except the under-18 group, which has rapidly gone backwards since the-then National government removed the $1,000 kickstart payment in May 2015: under-18s are not able to access the MTC.As at mid-2021 the number of KiwiSaver members aged under 18 totalled 255,528 compared to the June 2015 peak of just over 368,000.
Most of the under-age member balances are low, of course, but 67 kids had accumulated KiwiSaver accounts of $80,000 or more, according to the MJW analysis. “The age bracket with the most members is 18-25 years, after which there is a fairly uniform distribution of members,” the MJW report says. “Unsurprisingly, the number of members falls away above age 65 as this is typically when members can access their savings.”
About 280,000 – or 70 per cent – of members in the 18-25 age bracket report KiwiSaver assets of between $0 to $10,000, the analysis shows. “As we move into the older age groups, the spread of balances becomes wider, although there are members with less than $10,000 in each cohort,” the study says. “Of those aged 61 to 65, 20% have less than $10,000 saved, and a further 13% have between $10,000 and $20,000 saved.”
Given the age-weighting to younger members and the only 14-year accumulation history the average KiwiSaver account balance of $29,022 is low – with a marked male-female imbalance across all age cohorts. “There is a notable gap between males ($32,553) and females ($27,061). The average balance for a male is 20% higher than the average balance for a female,” the report says.
“For those in the 61–65-year age group, the average savings balance of males is $13,149 higher than females. Males in this cohort have an average savings balance of $61,606, compared to females which have an average balance of $48,457.”Retirement Commission policy director, Suzy Morrissey, said a hypothetical investigation of the MJW data – which captured over 90 per cent of the KiwiSaver universe – shows members have not taken full advantage of the savings potential on offer during the scheme’s 14 (going on 15) years in operation.
“What this has revealed is when comparing current balances to what would have been possible for a median wage earner to have accrued over the 14 years of KiwiSaver, we see that they are lower, on average, across all age groups,” Morrissey said in a release.“Part of this can likely be linked to first home deposit withdrawals and saving suspensions, and people not participating in the scheme for the full 14 years that it has been available.”
The Retirement Commissioner will table its triennial review of retirement income policies in December this year.
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