About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Friday, November 28th, 6:58PM
rss
Latest Headlines

What is the super fund?

Questions have been raised over the accounting treatment of the Government's proposed super fund.

Friday, February 23rd 2001, 3:51PM

by Rob Hosking

Is the government’s proposed superannuation fund an expense or a capital item?

That issue was the subject of a major spat between Minister of Finance Michael Cullen and National finance spokesman Bill English at this week’s finance and expenditure select committee meeting.

Cullen has been saying since late last year that the fund should be included as an additional expense on the government’s balance sheet.

The problem with this, he told MPs, was to do so would not meet GAAP accounting standards, which would require the fund to be listed as a capital item.

"In common sense terms, I would prefer to see it listed as part of government spending," Cullen said.

Under the GAAP standards, transfers to the fund would be treated as a capital item and offset by the asset being built up.

"I think that while that is correct in accounting terms in common sense terms it's being a bit cute," Cullen said. "It does raise the possibility you could borrow the whole lot and transfer it to the fund."

That comment drew fire from the National opposition because of its implications for the official size of the government sector.

The Labour Alliance regime has a target of 35% of GDP for the size of the state sector, compared to the target of 30% which held for much of the previous nine years under National.

The current level is about half way between the two. However if the superannuation fund is treated as the GAAP standards say it should, the Labour Alliance government is unlikely to reach that target without a considerable rise in government spending.

That was English’s target.

"Treasury uses a definition in accordance with well-established accounting rules designed to promote transparency," he said. "Cullen's own personal definition is intended to avoid the embarrassment Labour would feel by announcing it had reduced its government spending target.

"Over the next four years, the difference between the two is $6.5 billion, almost as big as the whole health budget."

The government will, in this year’s Budget, be more explicit about the discrepancy, Cullen said, although he gave no details of how this would be achieved.

Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.

« Greens outline their view on ethical investmentAMP & Good Returns launch superannuation website »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • FMA: We don't expect many personalised DIMS authorisations
    “Basically, as from Dec 1, to be classified as a wholesale investor in terms of the FFA and FMC Act, the client will need...”
    5 hours ago by AFA
  • Government-run annuity scheme proposed
    “i should add, i know it works because i was one of the million plus who have benefited from the scheme. ...”
    5 hours ago by w k
  • Time to promote advice: Dodds
    “Surely the people who pay fees to the IFA would expect them to be doing this promotional stuff already rather than waiting...”
    6 hours ago by R1
  • Time to promote advice: Dodds
    “Good stuff, Fred. I'm sure Robert and Murray are pleased to be confirmed as the paragons of virtue which they undoubtedly...”
    8 hours ago by dcwhyte
  • Squirrel applies to become QFE
    “Ahhh, maybe I'm missing something but the quote of "Once we are QFE-d we won’t need to worry about the advice piece and...”
    9 hours ago by mcdc98
Subscribe Now

News and information about KiwiSaver

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AMP Home Loans 7.24 5.69 6.19 6.55
AMP Home Loans $200k+ 7.14 5.59 6.09 6.45
AMP Home Loans LVR <80% - - 5.75 6.09
ANZ 6.74 ▼6.09 ▼6.19 ▼6.39
ANZ Special - ▼5.59 5.75 ▼5.99
ASB Bank 6.75 5.99 6.19 6.39
ASB Bank Special - ▼5.59 5.75 ▼5.85
BankDirect 6.75 5.99 6.19 6.39
BankDirect Special - ▼5.59 5.75 ▼5.85
BNZ - Classic - 5.69 5.75 -
BNZ - GlobalPlus 6.74 5.89 6.19 5.85
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.15 - - -
BNZ - Rapid Repay 6.74 - - -
BNZ - Std, FlyBuys 6.74 5.89 6.19 5.85
BNZ - TotalMoney 6.74 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.45 6.05 6.20 -
Credit Union North 6.45 - - -
Credit Union South 5.75 - - -
eMortgage 6.04 6.15 6.69 7.19
Finance Direct 6.10 6.45 6.69 7.10
First Credit Union 6.45 - - -
Lender Flt 1yr 2yr 3yr
General Finance 5.95 6.25 6.50 7.10
HBS Bank 6.65 5.69 5.74 5.99
HBS Special - 5.59 5.49 5.69
Heartland 6.70 7.00 7.25 7.85
Heretaunga Building Society 6.70 6.00 6.50 -
Housing NZ Corp 6.74 5.99 6.39 6.59
HSBC Premier 6.84 5.69 5.75 5.99
HSBC Premier LVR > 80% - - - -
HSBC Special - 5.39 - -
ICBC 6.75 5.99 6.39 -
Kiwibank 6.65 5.69 6.19 6.55
Lender Flt 1yr 2yr 3yr
Kiwibank - Capped 5.65 6.50 - -
Kiwibank - Offset 6.55 - - -
Kiwibank LVR > 80% - - 5.75 5.89
Liberty - - - -
Napier Building Society 5.80 6.00 6.70 -
Nelson Building Society 6.95 6.15 6.60 -
NZ Home Loans 6.85 6.09 6.40 6.65
Perpetual Trust 7.70 - - -
Resimac 6.59 6.10 6.28 6.43
SBS Bank 6.65 5.69 5.74 5.99
SBS Bank Special - 5.59 5.49 5.69
Lender Flt 1yr 2yr 3yr
Silver Fern 5.95 6.10 6.55 7.05
Sovereign 6.85 5.99 6.19 6.39
Sovereign Special - ▼5.59 5.75 ▼5.85
The Co-operative Bank 6.70 ▼5.69 5.75 ▼5.99
TSB Bank 6.74 5.95 6.19 6.30
TSB Special - - 5.79 -
Wairarapa Building Society 6.20 5.75 5.95 -
Westpac 6.59 6.09 6.39 6.65
Westpac - Capped rates - 6.74 6.99 -
Westpac - Offset 6.59 - - -
Westpac Special - - - 5.99
Median 6.70 5.99 6.19 6.34

Last updated: 28 November 2014 6:53pm

News Quiz

A well-commented on story last week mooted that many authorised financial advisers are out of their depths discussing what with their clients?

bonds

death

divorce

piles

birth control

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by PHP Developer and eyelovedesign.com