What can be said in answer to this report?
1 The subscribers say 'they are a group of people with an interest in public policy on retirement incomes'.
On inspection it appears that they are all operating in the private sector of the superannuation industry. This would indicate a somewhat biased view of Labour proposals to improve the situation for the bulk of those depending on a universal provision for NZ Superannuation.
2 'It is a logically flawed proposal'
3 ' It is more likely to increase the cost of New Zealand Superannuation over the next 30 years'
There is nothing to support such a conclusion. My own research indicates that there need be no increase in cost, and in fact there could be an overall decrease due to various factors -
4 'The fund is more likely to detract from New Zealand's economic health'
If this is the case why then has the government been spending large amounts trying to encourage New Zealanders to save for private superannuation for retirement? There is no difference in economic effect between private saving and government saving. In fact government savings have proved to be a more reliable source of funds than private savings in NZ.
5 'the underlying premise that fully or partly funded superannuation can guarantee the security of New Zealand Superannuation ... This view is wrong.'
There is no underlying assumption of this nature. The policy simply states the basis of a funded universal superannuation. This proposal in itself cannot 'be wrong'. That depends on one's point of view. This view is right.
6 'Labour's proposals make New Zealand superannuation less sustainable because they are likely to increase its cost'
Refer to reason why it can decrease cost under para 3 above.The monies paid into the National Provident Fund over the period from the NPF inception until its demise contributed considerably to NZ's economic well being with the enabling of loans to local government to provide the infrastructure of roads, sewerage and water schemes that National now wants to sell.
7 'Labour's proposals are economic window dressing. they will rob Peter to pay Paul'
One's view of this depends on whether you are Peter or Paul. The present Student Loan scheme which shows the large amount of student loans as an asset of the government without taking into account that the students are people having to pay for that asset must be an even greater exercise in window dressing.
8 'Our ability to create wealth - not the level of savings - is the key to the living standards of present and future retirees'
Someone should have told the Retirement Commissioner this before he engaged in widespread advertising to encourage private savings.
There is a great deal more to living standards than the accumulation of wealth. Living standards depend on community attitudes and a sustainable ecology not only on the wealth supposedly measured by economists. It may be that future living standards depend on a reduction in our wealth accretion and a distribution of wealth among the poor to improve their standards of health and simply getting enough food to eat - so reducing their propensity to revolt as in 1789.
9 'A change from PAYG requires workers during the transition paying twice'
This is nonsense. The amount actually paid out to superannuitants is exactly the same. The only difference is that a fund is being built up which will help pay for future superannuation - when current workers come to retire. They are helping to reduce the cost of their future superannuation.
10 'Peter and Paul again'
Twa corbies sittin on a wa'. Fly away Peter, come back Paul.
11 'Labour proposes increasing the generosity of New Zealand Superannuation'
There can be no increase on what does not exist. There is no generosity in present NZ Superannuation. The proposal is simply to return to the 65 percent relativity to average after tax wage for a married couple. This is what existed before National unilaterally broke the Accord on Superannuation.
12 'The investment risk remains with the government - it is difficult to see how such a large pool of investment money will be free from government interference'
This will depend on the 'democratic principles' being exercised by a freely elected parliament each three years, as is currently being demonstrated.
13 'Labour's proposal is fundamentally flawed'
No more so then the critical analysis put forward by the self-styled experts.
14 'how the proposed fund will help increase the capacity of tomorrow's New Zealand Workers to produce more.'
The fund will simply be one factor in producing a flow of capital to enable Workers and those working with them to improve the results of their own labours. The labour productivity statistics have remained relatively static over the past 10 years. This may be due to the negative attitude to workers over that period. The introduction of the Employment Contracts Act has had a negative effect on employee relations. The recently introduced privatisation of ACC has reversed one of the major advances in worker conditions introduced following the Woodhouse report.
The significant growth in world population will require ways of enabling more people to share work - even with the increase in aging of the population. The ongoing health of many of those older workers who are still in good health will depend on them having a useful contribution to make and a recognition of that contribution. Something more substantial than an 'International Day of the Elderly'
15 'How the fund boosts output, raises productivity, constrains current consumption'
The simple answer to this would be to abolish advertising - (particularly on TV1!). The continual increase in consumption is a major threat to world ecology.
A FEW POSITIVE IDEAS
Ian H Douglas M Com; FCA Retired.
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