About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Friday, August 1st, 2:26PM
rss
Latest Headlines

Is the Govt borrowing to seed its super fund?

One of the big superannuation issues since the Budget has been about the Government borrowing money to put into its dedicated super fund. But is it? SuperTalk investigates.

Thursday, June 7th 2001, 9:49AM

One of the big issues about superannuation since the Budget has been about the Government borrowing money to put into its the New Zealand Superannuation Fund. But is it?

Budget documents show that Government borrowing is going to borrow $3.5 billion next year, and an extra $5 billion over the next four years. Net public debt is predicted to rise over the next four years - from more than $20 billion to nearly $24.5 billion.

This borrowing programme is well above what the markets expected and a link is being made between this increase in borrowing and the level of contributions to the super fund.

Some economists suggest the rise in borrowings is similar to the contributions budgeted to be put into the super fund.

Opposition politicians, including National deputy leader and finance spokesman Bill English and Act leader Richard Prebble have been quick to highlight this apprarent link. The line they are spinning on it is that the Government is "using the mortgage to play the sharemarket".

English says the government "doesn't have enough cash to spend what (it) wants to spend nor maintain and improve the Crown's existing asset base while at the same time investing in the Superfund."

"In the period to 2005, the Crown needs to invest $19.3 billion, which includes $6.1 billion for the Superfund. But over that period Dr Cullen has only $11.7 billion cash available from surpluses. He therefore needs to find another $7.6 billion.

However, finance minister Michael Cullen claims the government's borrowing programme is "a victim of distortion through over-simplification."

He argues the government is keeping its debt in line with declared objectives and the new borrowings aren't being used to invest in the super fund.

"Yes, the Budget shows a modest increase in net debt over the next few years," he says.

"But that has nothing to do with the proposed Superannuation Fund. Instead it reflects the Government's decision to take on to its own books the borrowing programmes of the District Health Boards and Housing New Zealand.

"This makes shrewd sense because the Government can negotiate cheaper interest rates than can these smaller organisations.

"The other reason there is a small increase in the debt profile is that the previous government allowed the infrastructure to deteriorate through persistent under-investment over many years across many activities - from transport through to corrections and defence," Dr Cullen says.

"As a consequence, the coalition Government has had to embark on a heavy capital investment programme.

Cullen says the budget forecasts operating surpluses of $1.4 billion in 2002, and $2.4 billion, $3.1 billion and $3.7 billion in subsequent years.

For more on this see Govt not borrowing to pay for super scheme

« Fund's rules present problemsAMP & Good Returns launch superannuation website »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • [Obituary] Peter Hensley
    “Peter – an intelligent, caring and gentle man with independent thought, an innate sense of fair play, amusing dry wit and...”
    4 hours ago by Robert Oddy
  • Campaign to reduce savings tax
    “I wonder why the Financial Services Council is not waging a campaign to reduce the management fees on KiwiSaver if they are...”
    4 hours ago by graemetee
  • [Obituary] Peter Hensley
    “A wonderful, genuine man gone much too soon. I worked for Peter for nearly twelve years and his passing will leave a huge...”
    6 hours ago by Maureen Marr
  • [Obituary] Peter Hensley
    “Peter was a longstanding member and past president of SIFA, and he will be missed. SIFA is taking up the family's wish...”
    7 hours ago by SiFA
  • [Obituary] Peter Hensley
    “Thank you for all of your kind and beautiful comments. A gathering for Peter will be held at 11am at the Ngamotu Golf Club...”
    8 hours ago by Amy Hensley
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 5.99 6.29 6.60
AMP Home Loans $200k+ ▲7.14 5.89 6.19 6.50
AMP Home Loans LVR <80% - - 5.85 6.29
ANZ 6.74 6.05 6.49 6.65
ANZ LVR > 90 6.74 6.55 6.99 7.15
ANZ Special - - 6.09 -
ASB Bank ▲6.75 6.09 6.40 6.65
ASB Bank Special - 5.95 - -
BankDirect ▲6.75 6.09 6.99 6.65
BankDirect Special - 5.95 - -
BNZ - Classic - - - 6.25
Lender Flt 1yr 2yr 3yr
BNZ - GlobalPlus ▲6.74 5.99 6.39 6.59
BNZ - Mortgage One ▲7.15 - - -
BNZ - Rapid Repay ▲6.74 - - -
BNZ - Std, FlyBuys ▲6.74 5.99 6.39 6.59
BNZ - TotalMoney ▲6.74 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide ▲6.45 5.90 6.50 -
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
Lender Flt 1yr 2yr 3yr
First Credit Union 6.45 - - -
General Finance 5.95 6.25 6.50 7.10
HBS Bank 6.15 5.85 6.20 6.25
HBS Special - - - 5.95
Heartland 6.45 6.75 7.00 7.60
Heretaunga Building Society 6.25 5.85 6.50 -
Housing NZ Corp 6.50 6.00 6.30 6.60
HSBC Premier ▲6.84 5.95 5.99 6.25
HSBC Premier LVR > 80% - - - -
HSBC Special - 5.85 5.85 5.85
Kiwibank 6.40 5.99 6.29 6.29
Lender Flt 1yr 2yr 3yr
Kiwibank - Capped 5.65 6.50 - -
Kiwibank - Offset 6.30 - - -
Kiwibank LVR > 80% - - 5.85 6.29
Liberty 5.64 - - -
Napier Building Society 5.80 6.00 6.70 -
Nelson Building Society ▲6.95 ▲6.15 6.60 -
NZ Home Loans 6.35 6.09 6.40 6.65
Perpetual Trust 7.70 - - -
RESIMAC - lo doc ▲7.59 7.06 7.38 7.82
RESIMAC LVR < 80% ▲6.59 6.06 6.38 6.82
RESIMAC LVR < 85% ▲7.59 7.06 7.38 7.82
Lender Flt 1yr 2yr 3yr
RESIMAC LVR < 90% ▲8.59 8.06 8.38 8.82
SBS Bank 6.15 5.85 6.20 6.25
SBS Bank Special - - - 5.95
Silver Fern 5.95 6.10 6.55 7.05
Sovereign ▲6.85 6.09 6.40 6.65
Sovereign Special - 5.95 - -
The Co-operative Bank ▲6.70 6.00 6.00 6.25
TSB Bank ▲6.74 6.00 6.19 6.60
TSB Special - - 5.80 -
Wairarapa Building Society 6.20 5.75 5.95 -
Westpac ▲6.59 6.09 6.39 6.65
Lender Flt 1yr 2yr 3yr
Westpac - Capped rates - 6.49 6.99 -
Westpac - Offset ▲6.59 - - -
Westpac Special - 5.95 6.09 -
Median 6.59 6.00 6.39 6.60

Last updated: 31 July 2014 9:42am

News Quiz

Of the following people who is not involved in Craigs Investment Partners new stand alone funds management company?

Simon Botherway

Stefan Stevanovic

James Ring

Andrew South

Roy Cross

MORE QUIZZES »

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