Rob Stock provides some useful tips when the crisis or squeeze on your finances occurs!
In response to Bernard Hickeys column, this letter was sent to the Sunday Herald. Columnist Bernard Hickey utilises all the myths and stereotypes including invalid assumptions to continue his crusade on NZ Superannuation (Sunday Herald 31 May 2015). 2060 predictions are worthless, the simplicity and universal fairness of the scheme ignored, and Bernard has the audacity to raise the expensive and divisive means testing, only aiding the wealthy hiding behind trusts to camouflage real income. NZ Super is affordable(5.5% of GDP 2030), a world class model, praised by most researchers, beneficial for women and those disadvantaged and also taxable. No alternative model goes close!
The Herald published the following- Superb Super New Zealand super is affordable. Its net cost predicted to be 5.5% of GDP by 2030(It’s a super time to be old My 31) It is a world class model, praised by most researchers, beneficial for women and those disadvantaged and also taxable. No alternative model goes close.
The June 13, edition of Listener magazine contains a feature: “The Super Model “by Guyon Espiner Pages 16-21. Interesting article with a focus on the Retirement Commissioner Diana Maxwell. I have submitted the following to the Listener Editor, and await to see if it is published
Guyon Espiner “THE SUPER MODEL” fell into the trap of emphasising a looming Super crisis and a fiscal monster, instead of recognizing that the model adopted in NZ leads the world, its simplicity, universality and relatively low cost a classic example of how to structure retirement income. Len Bayless a well-known economist in the 1990’s went on record about the crisis rhetoric adopted by NZ media commentators when addressing this topic and the tone of Guyon’s article camouflaged the refreshing approach adopted by the Retirement Commissioner. Predictive modelling of costs decades out, are worthless due to the many variables involved, and at 4.1% of GDP and 5.5% in 2031 New Zealand has one of the lowest costs in all the OECD countries. No mention of the New Zealand Super fund in the article, the fact receipt ants pay tax on their super entitlements, little recognition of the tidal wave trend of New Zealand seniors remaining in the workforce, contributing to productivity and growth, and silence on the significant adaptability that occurs in every society over time, and which will change many of the assumptions commentators fixate on. The only caution readers should have on New Zealand Superannuation is meddling by silly politicians, failing to recognize New Zealand Superannuation and Kiwi Saver are great models, no alternative goes close. As David Harris, retirement income Guru and managing director of TOR Financial Consulting said in 2014, “New Zealand is the smart country in the manner it has set up the retirement income framework”. Mess with it at our peril.
Posted by Alec Waugh
Kiwi Saver, Annuities and Superannuation
Protection Association New Zealand Inc
The Consumer Voice Protecting Your Retirement Savings
June 1, 2015
TO Right Honourable John Key Prime Minister:
cc: Copies to all Parliamentary Party Leaders
I am writing this letter in my capacity as Chairman of the consumer organisation Kiwi Saver, Annuities, New Zealand Superannuation Protection Association Incorporated known as Kaspanz www. kaspanz.The society has been in existence now for over 2 years, with a well-established and regularly updated website providing evidence based research on New Zealand retirement Income issues.
One of the things we have learnt since our organisation began is that the current model of New Zealand Superannuation is a world leader receiving acclaim from many off shore commentators and a number of our own. A sample of those comments is shown at the bottom of this letter. We believe the costs are sustainable, realistic in comparison with other OECD countries, and projection of costs in the years 2060 and 2080 are unhelpful. Predictive modelling so far out, has too many variables to be useful
The message from Kaspanz is don’t meddle with NZ Superannuation, instead champion this Tier 1 superannuation scheme, and also the Tier 2 Kiwi Saver scheme
Kaspanz represents consumers, and the message we hear from members is they want consistency in retirement income policy, limited intervention by politicians and lots of lead in time for any necessary changes to assist their savings and spending patterns and their own thinking on such topics. Means testing is not an option, the administration and monitoring costs and the camouflaging of income by use of trusts and similar, only results in a minefield of complexity adding tensions within communities.
Kaspanz is not adverse to the conversation re raising the age of entitlement to 67 over an ample lead in period, nor to a review of residency requirements, but the simplicity of the current model including its universality is superb policy, has helped assist women in keeping out of the poverty trap and nothing we have seen projected as an alternative approach, gets close to the current model.
Yours sincerely Alec Waugh, Chairman Kaspanz, alwaugh 09 4899711
1. David Harris, retirement income Guru and managing director of TOR Financial Consulting said in 2014, “New Zealand is the smart country in the manner it has set up the retirement income framework”.”
2. Michael Littlewood in a 2013 paper said New Zealand Superannuation (NZS) is one of the simplest, most effective, and most cost effective Tier 1 schemes in the developed world. We mess with it at our peril”
3. Alec Waugh: www.kaspanz.wordpress.com Universality has a soothing intergenerational affect, something which the economic statistics don’t measure, but like the Policeman wearing a helmet, it provides a calming effect.
4. Dr Charles Waldegrave, NZ Longitudinal Study of aging report “The high level of reliance on superannuation for the majority of New Zealanders also means there is a large proportion of older New Zealanders (65+) sensitive to any policy changes around this universal entitlement. ‘If older people drop below the poverty threshold in larger numbers in the future, it can be expected that their quality of life and health will reduce
5. Gabriel Makhlouf then, Chair of Treasury, in a 2012 panel discussion with Aged Concern, described Treasury as a “fan” of NZ Super. “Compared to other systems of retirement income support, it is simple; people know exactly what they will get and when and it does not discourage continued paid work. “
6.Martin Hawes said “NZ Super is a system so simple and cheap that we need to give people certainty and stop playing football with it”.
7. Susan St John of the Auckland business School Retirement and Research Centre said “We can hold our heads up in the world when we look at our policies for the retired. One of the policies we have got right for women is New Zealand Superannuation. Everyone is paid the same gross amount. No attachment to the paid work-force is required (in many countries a contributions to the paid workforce is required). Thus NZ Super implicitly recognises that all contributions are equally important. It is based on an individual entitlement—not a joint payment for couples. It goes with you on divorce or death of a spouse. We have been very successful in containing the growth of poverty among older women that plagues many other countries.