NZ Superannuation Fund

Grey Power spits the Retirement Age dummy

The chances of avoiding a head on clash between Grey Power and the Government over raising the age of national superannuation are fading as the organisation?s 65000 members prepare for political war.

National president Tom O?Connor said he had planned to debate the Government?s announced intention, to raise the age of entitlement to 67, at their AGM in May but the response from across the nation had been swift and very angry.

“It?s like someone has kicked a beehive and I wouldn?t to be around when the lid comes off.”

O?Connor said not all Grey Power members were old enough to draw national superannuation yet but they were determined to protect the scheme from political interference.”

I don?t think they have been this angry since an attempt to impose a surtax on superannuation 30 years ago gave rise to Grey Power,” he said.

O?Connor said lifting the age of entitlement because national superannuation had become unaffordable had become an ill-founded mantra of the far right but there was no sound evidence to support it.

“National superannuation amounts to less than 4% of GDP. Even if the amount currently paid doubles over the next twenty years GDP will probably increase by a similar amount or more.” He said. Read more »

Cunliffe breaks Rule Number one

David Cunliffe is whining today. In doing so he is breaking rule number one.

National’s Associate Finance Minister and election campaign manager Steven Joyce yesterday attacked Labour’s savings package on the grounds it would increase the Government’s net debt by almost $7 billion over the five years to 2015-16.

Labour wants to raise the age of eligibility for NZ Superannuation from 65 to 67, resume contributions to the NZ Superannuation Fund and make KiwiSaver compulsory for all workers.

The most financially significant of the three policies is the resumption of Superfund contributions which Mr Joyce said would add $6 billion to the Crown’s net debt over four years.

“Labour wants to borrow billions more at precisely the time when the world is saying no to more debt.”

However, Mr Cunliffe said the effect on the Government’s books of resuming those contributions was neutral because money borrowed for that purpose was offset by the corresponding increase in the value of the fund.

“It has no impact whatsoever on net debt because net debt quite legitimately includes the increase in the Superfund … If anything, it would reduce net debt because the rate of return is higher than the Crown’s cost of capital.

“It’s dishonest to focus on the liability and ignore the asset.”

What is dishonest is Labour borrowing to put money int he bank. That is exactly what they are doing. You don’t go and increase your mortgage so you can put the money in your savings account in your household finances. Only stupid people would do that or South Canterbury Finance investors.

By borrowing money to put into savings you are creating your very own Ponzi scheme, expecting future taxpayers to cover the debt incurred to fund your retirement.