About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Saturday, December 20th, 2:10PM
rss
Latest Headlines

An open letter to the Prime Minister

Thursday, June 7th 2001, 3:56PM

Michael Littlewood
3 Woodley Avenue
Remuera
Auckland, 5


7 June 2001

An open letter
The Right Honourable Helen Clark
Prime Minister
Parliament Buildings
WELLINGTON

 

The New Zealand Superannuation Bill

Dear Ms Clark

I am taking the slightly unusual step of writing to you directly and also publicly because I think it's now time for everyone to step back from the current debate to see where we are and where we would like to end up with respect to the New Zealand Superannuation Bill.

It's clear that your government's original intention to obtain a broad consensus from MPs on the Bill's objectives cannot be achieved. There is even the possibility of the Bill's failing altogether. New Zealand now needs leadership on this issue to avoid our having one person's view of the world imposed in a way that has re-politicised the whole debate.

New Zealand has one of the best retirement income regimes (public and private) in the developed world. You might not think so from the way the present debate has played out. This does not mean, however, that I agree with all of what we do.

Despite all the rhetoric from all sides, there aren't large differences between the proponents of various views on retirement income strategy. However, the continued dissension and position taking is very damaging. I probably don't need to explain how damaging the current debate is politically but my concern is mainly with the damage that the last 25 years has done to the private saving plans of hundreds of thousands of New Zealanders.

What has finally prompted me to write in this way is the prospect of yet another backroom deal being negotiated with Winston Peters less than five years after a similar situation led to the wasteful referendum on his Compulsory Retirement Savings Scheme. Mr Peters must not be misled. There is no way that the New Zealand Superannuation Fund can, in anything like its present form, be converted to individual accounts. I am sure your advisers will have already told you this. That's why clause 73 (that introduces the sniff of a possibility that this might happen) is so vague. Let me illustrate this point with one just example.

The Fund's objective is to help future governments pay for New Zealand Superannuation. If the Fund is eventually to be converted into individual accounts, does that mean New Zealand Superannuation will be income and/or asset tested against the money that comes out of those individual accounts? That's what would have happened with the 1997 CRSS that was so decisively rejected by the referendum. I had understood that Mr Peters was now against income and asset testing. If it's not to be so tested then we are back discussing the very issue that the Fund was to help out with - how will future governments pay for New Zealand Superannuation? The whole process then becomes an expensive, circuitous and pointless exercise.

It might surprise you to know that New Zealand has never had a properly researched debate on all the major design elements of New Zealand Superannuation. Why, for example, do we pay it from age 65? Should it be earlier or later or even flexible? Why do we pay, in Mr Rod Donald's words, "65 at 65"? Is that enough, too much or just right? Why is the single person's pension 60% of the married couple's amount? Is that enough, too much or just right? I could go on.

If we had a properly researched debate about all this (led by the Retirement Commissioner?), I suspect that the answers that emerge will look quite like what we have but there will probably be some changes in the coming decades particularly as we contemplate the impact of the baby boomers' retirements. More importantly, however, I am sure that this debate can lead to the lasting consensus on both public and private provision that current strategies have failed to achieve in the more than 25 years since the New Zealand Superannuation Scheme was introduced in 1975.

I agree with The Hon Peter Dunne - the country is really fed up with political antics on superannuation but we part company on his suggested solution. The answer is not to do anything (which seems to be where he is at). We need to change the way we run this kind of discussion, not grab hold of the latest "answer" and hope that it works.

I have been involved in the debate on public and private provision for more than 20 years. My personal experience is that, when all the issues are fully discussed, the answers are reasonably obvious and usually uncontentious. I was privileged to be part of the 1992 Task Force on Private Provision for Retirement. My wish would be that prominent proponents of different views on both public and private provision had a similar experience to mine. It changed my views dramatically (I used to favour both tax incentives and compulsion).

I am absolutely convinced that, with leadership, we can develop a robust regime for both public and private provision for retirement that will be fair and that can survive the coming demographic pressures. Both public and private provision need to be looked at together and both cry out for decent data and a full debate on the things that really matter.

I think it's now time for the government to step back from the New Zealand Superannuation Bill and not stitch up a deal with New Zealand First. You must know that such a deal cannot last and will become yet another damaging event in the long superannuation saga.

Please let's instead have a proper, inclusive, national debate.

Yours sincerely

Michael Littlewood

« 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
  • QFEs call for simplification
    “I believe that all advisers should personally be registered or licensed for the services that they provide. Whether working...”
    2 days ago by I was wondering
  • Fund brings active and passive together
    “Hi Brent Sheather Not sure if SmartShares website is accurate or not but the 3.2% & 2.8% relate to the NZX Midcap (to...”
    2 days ago by noidea
  • Fund brings active and passive together
    “Hi Bobby WTF indeed but the WTF should be directed to MJW who may well be on serious drugs. SmartFONZ actually returned,...”
    2 days ago by Brent Sheather
  • Fund brings active and passive together
    “I don't read MJW but FundSource correctly has FNZ ETF returning 2.8% for the Sept quarter. Happy to send you a copy of the...”
    2 days ago by samstanley
  • Fund brings active and passive together
    “Regardless of timing the launch of the Harbour Advanced Beta Fund is a huge achievement. Well done to Jody, Andrew and team...”
    2 days ago by samstanley
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 5.99
BNZ - GlobalPlus 6.74 5.89 6.19 6.29
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.15 - - -
BNZ - Rapid Repay 6.74 - - -
BNZ - Std, FlyBuys 6.74 5.89 6.19 6.29
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 6.30 -
Housing NZ Corp 6.74 ▼5.70 ▼6.09 ▼6.29
HSBC Premier 6.84 ▼5.45 ▼5.65 5.99
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
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 5.97 6.19 6.29

Last updated: 15 December 2014 11:07am

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