Time to rethink everything especially super policy

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When share markets crash, it becomes clear that shares are only ever a potential claim on resources. They have to be converted into money before they can command the basics of survival.  When the music stops, few want to buy any more. Today’s share market crash reflects not just the bursting of a speculative bubble but also a loss of faith in the viability of the underlying businesses associated with tourism and travel.

While housing is a real asset and still gives shelter, its monetary value can also fall steeply and its potential to provide a buffer for retirement spending can rapidly diminish. New Zealand has had the strongest speculative housing bubble in the Western world. What happens next is not hard to predict.

The emerging poverty among older New Zealanders was noted in the RPRC report on fiscal sustainability  for the 2019 retirement income review. Much of this poverty is driven by the inadequacy of the benefit system for those aged 50-65, and the way the housing market has become a speculative bonanza for the well-off instead of providing basic healthy housing for everyone.  Housing stress is bound to become a whole lot worse. 

We also questioned the unscrutinised expansion of the NZ Super fund as if that was going to help us “afford” NZ Super.  As share markets crumble, the old adage from Economist Nicholas Barr ( Myths my grandpa taught me) that pensioners ” cant eat pound note butties” takes on a new relevance.  What Barr means is that a store of paper assets including money itself is not always a guarantee of the expected standard of living. The future depends on there being actual “butties” to consume. 

TDB Recommends NewzEngine.com

CO-VID 2019 calls into question the belief that  a treasure chest like the NZ Super fund will save us. Even worse, the NZSF is projected to deliver only a trickle, and that only by 2050. Under the current formula the fall in the value of the fund may push even this meagre contribution much further out.   

Imagine if instead of squirrelling away $1-2 billion a year to this ring-fenced  fund, we had used the money to shore up the health system so it was capable of handling the pandemic. Imagine if we had protected the welfare system so we didn’t have such a large number of families homeless, ill, and subsisting in overcrowded, badly built homes. These families will be joined by many more as jobs fail and the social costs of the failure to mend the social deficits become even more exposed in a crisis. Will they too have to queue for supplementary payments because benefits are patently inadequate?  Poverty, existing ill-health and overcrowding make for a very fertile ground for the spread of the virus.

The major challenges we now face include designing enduring redistribution packages, keeping up the supply of basic commodities and essential services, and strengthening the public sector in light of 21st century, challenges that private enterprise is clearly incapable of solving. It is not to be found in storing up treasure on earth “where rust doth corrupt and moth decay” for some mythical future. 

The security of the future of old people in NZ does not depend on the NZ Super fund, nor on the untrammelled and unstable economic growth driven by tourism and rapid population growth. It depends vitally on the health, education and security of the workforce and their children, the strength of our collective institutions, and a rapid reinvigoration of the ethos of public service.    

 

13 COMMENTS

  1. Yep.
    And who were the criminal masterminds behind dismantling the family farm in favour of an industrialised cowsploitation model that gave the senior fonterra exec a multi million dollar salary while allowing the perps of yesteryear get clean away with taking money that should have gone through AO/NZ’s financial digestive tract and instead of disappearing to God only knows where? I’m betting our money’s in Switzerland where pig muldoon was photographed scurrying back from all those years ago.
    The simple, and for the want of a better term, criminal acts of treason and treachery is eye wateringly obvious yet remains invisible for it’s audacious simplicity.
    And I must say @ Susan St John; yourself and others like you must change the vector of your inquiring minds.
    You’re in the right forest but barking up the wrong tree. Apol’s and no disrespect etc must it must be said/written.
    When, for example, one drives through Tapanui, a tiny mid south town floating about within some of the richest farm lands left in the world, surely, the grandest most impressive and bold building is, by far, the historic BNZ building. Built around the turn of the last century, that building wasn’t built for fun. It was built because that was where the wealth was. Not in Auckland’s property market. Not, in tourism. The wealth that the BNZ had in its sights was agrarian. Food and wool. Vital commodities. Essential to human life and we did the best of it and we were the first to refrigerate then export perishable goods to the vast markets of Europe and the USA.
    And now? Where has that gone? And why?
    That, is where your inquiries should focus. All else is tinsel and trickery.
    I have to ask, @ SSJ?
    How can you, being such and erudite intellectual, ignore the fact that we AO/NZ’ers are only five million? On rich and arable lands with fresh water and clean air?
    Our AO/NZ is bigger then the UK by 25 K sq km? Our oceans are heaving with fishes and yet we can only dream of affordable fish in the supermarkets ?
    We have vast tracts of timber yet a basic 4×2 is up to $4.50 a meter? And our absurd district councils blow brain farts daily to force people to not use their creative intelligence to build a shanty from recycled materials yet are fine about seeing the wretched homeless sleeping in parks?
    AO/NZ is an abstract head fuck. My apologies for the fuck work btw.
    AO/NZ is a sour note. A sentence without rhythm. It’s a squawk at the Opera.
    When I drive through AO/NZ it feels iffy. There’s a reverberation that rattles the mind.
    [It ] just doesn’t make sense to me and I think, I know, it’s because we’re not seeing the general truth of the matter.
    There MUST be a royal commission of inquiry into past and present relationships between AO/NZ politicians and our larger corporations.

  2. I still remember being so damned cocky when Jacinda became Leader of The Labour Party and now I’m just exited for it to be over. This thing has felt like a nightmare that never stops coming. I honestly don’t know what to expect anymore other than to develop new ways of disappointment.

    Yesterday I did a brief comment about Wuhan virus and got a bit of flack for indicating its oriental origins then by typical snowflakes that I just can’t handle the truth. Oh here they’re like “oh you’re just some amateur writer no one understands.” They sound like my teachers (not talking about JohnW) telling me I’ll never amount to anything and this is criticism coming from my own side on the left.

    This one gets me when some even I am questioned about my adherence to left wing politics. So to all those who are passionate it’s okay to be passionate about something and share critical thought on it. And so no matter what, we are getting unsatisfying answers. Give your audience/members satisfying answers, give them a truly awful villain to fear and root against and give us all of that by utilising a well placed time jump, that’s how we can begin to make this Coalition a great government.

    Okay so it’s actually a tad suspicious that the coalition governments uses some of the things that are regularly discussed on The Daily Blog whether it’s deliberate or just fate there is no way that the corona virus can make past ICU hospital beds.

    After a decade of living through the austerity ridden Jonh Key Lead National Government we are still waiting for a conclusion to his health policies, unfortunately. And although this coalition government so it seems have been picking up some of the ideas floating around The Daily Blog it’s not our fault everything is still so unsatisfying. Having said that Jacinda beginning to end has been a major positive for New Zealand. Being a Mother while being Prime Minister is really something to behold in all this and there is one genuine accomplishment when she has to face down the Gun Lobby.

    That’s all powerful stuff but those few things aside there’s really not much else here. The real core downfall of this coalition government isn’t the few short Barrie’s Iv brought up, some of the, do play apart yes but not because of what they are but how they’ve been handled in this conclusive Year-Of-Delivery.

    The true downfall of this coalition government is right there in the unfortunately titled the year of delivery. It’s a Flaw when you consider another conclusive chapter in the same year (2020) the U.S. Presidential election scheduled 2 months earlier than our own. Okay it is very blasphemous comparing Jacinda to Trump but it is similar to how they’ve been constructed as to conclude this political cycle. Often times the similarities are so shameless it’s clear The Leader of The National Party just copy & past foreign campaign strategies. But the difference here is that where ever Trumps financial success succeeds in Jacinda will fail miserably and vice versa.

    So in order to prove that it’s not our fault we have to show the flaws in how this final conclusion was constructed in the year of delivery or Yknow how to fail at winning the end game.

    The thing that made Jacinda such a powerful high stakes conclusive ride was that it was built entirely on the foundations of the Labour Leader processing her, Andrew Little. Little had radical policies he campaigned on and lost yes but overlay that with the promises of combating climate change and ending child poverty and we now have a time jump of 3 years and you should begin to see the flaws that haven’t been addressed yet. In fact the corona virus just exacerbates them and now we have one last time jump to revert back to that powerful anything is possible moment before an election ends the whole thing, or all is lost for ever to The National Party. It’s pretty high stakes conclusive stuff. It’s all exiting stuff until you compare it to Trump which also try’s to be this one last high stakes ride or die mentality.

    I’m sure you all get what I’m saying but here’s one more example of why proper introductory set up is so important. Very similar to WW2 the Wuhan virus has this super negative slump at the moment where years of austerity and incompetent leadership makes the fight seem unwinnable and when I say similar I mean we are shamelessly copying and pasting narratives here from the greatest failure of the twentieth century into the greatest failures of the twenty first century.

    Where as post World War 2 celebrations can unlock thousands of emotions all hitting us at once. But here with the Wuhan virus it just feels like nothing because once again these leaders or who ever never introduced us properly to a Capital Gains Tax, or failed to introduce properly a UBI or Modern Monetary Theory and other anti austerity initiatives that could dominate crises instead of crises do misting us. We know more about politicians based on the factions they belong in than we do about any policy that could stand up to the pissy 2% death rate the Wuhan virus posses let along WW2 death rates. Here we don’t even have people show up in tanks its just a bunch of single cell organisms. But hey at least on the bright side of pay offs at least dirty politics is ineffectual now.

  3. Why are the neoliberal woke ‘advisors’ so keen to give away the NZ pensions/health care/retirement care/gold card/winter energy payment to people who are not NZer’s and just arrived in NZ in the last 5 – 10 years and can access super without paying any or very little tax in NZ?

    Don’t you think that is the biggest travesty?

    However like the potential deaths of Coronavirus more important for the woke to constantly and rabidly cut down any discussion related to foreign or do anything against that interest but in the interest and fairness and safety of the locals is now banned in government and advice circles.

    It is bizarre that because of that STATE pensions and pensioner perks are handed to people who hardly ever lived in NZ, and now get that massive million+ dollar perk due to stupidity, ideology, and the woke versions of racism, not a focus on saving NZ lives, stopping the brain drain from NZ, being fair and practical and looking at the longevity of NZ welfare systems.

    “The number of Māori aged 65+ will more than double (from 48,500 to 109,400) between 2018 and 2034, as will the senior Pacific population (from 21,300 to 46,700), while the number of senior Asian New Zealanders will almost triple (from 59,500 to 171,900).”

    The massive perks and easy access to it for foreign pensioners, has led to NZ getting a massive onslaught of foreign pensioners who can access for nothing our pension and health systems while the debate still stalls as apparently they can’t be a separate group that pays their own pensions and health care before coming here, but must be lumped into the NZ pensioners and public who generally paid taxes in NZ (sometimes at over 50% tax rate) for over 40 years or the so called rich Gen X who as well as user pays education that they have had to pay for, now are expected to pay 2- 4% for their non guaranteed KiwiSaver, and may not get the pension if they are deemed, “too rich”. However the silence on why foreign boomers get NZ pensions for nothing, even their spouses who never lived here either https://www.rnz.co.nz/news/national/376220/10k-11-days-and-one-failed-deportation and the absence of debate or discussion paper on the growing migrant pensioners numbers and why they don’t have to pay anything, shows how fucked up the NZ government and commentators are on this issue shows that NZ state pension advisors are incompetently woke and stupid….

    • There are real issues with the residency requirements for NZS, but at present the concern might be that policy tools being used need to be much better designed. The doubling of the Winter Energy Payment for the coming financial year(from $480 million to $ 960 million for 2020) is a case in point. Each beneficiary and superannuitant is entitled to $900 if single, and $700 if married or a sole parent. Low-resourced pensioners need this payment, but there are many that do not need it. If superannuitants were required to opt in if they wanted it, with no questions asked, in today’s circumstances many well-off pensioners would chose not to take it. The payment would then be much more cost-effective, and several hundred million dollars would be released for further poverty alleviation policies to be enacted.

  4. This just in via The Guardian.
    “Tim Lang, Britain’s leading expert on food policy, says we already faced a challenge unmatched since the war. And things just got worse…”

    “At the heart of this crisis is a British willingness to let a small number of corporations dominate food retailing: just eight companies control 90% of our food supply. “It’s the ‘leave it to Tesco’ approach,” he says. The prioritisation of price has hollowed out UK agriculture, so that primary producers get the smallest slice of the cake. “They get about 5% or 6% of the value of the food we buy. They need double that.”

    “The book comes freighted with eye-popping data. For example, of the six million hectares of cultivatable land in Britain, only 168,000 hectares are used for fruit and vegetables. As a result, we have to import vast amounts of crops we could otherwise be growing. Much of the remaining land is used for crops to feed livestock or for processed foods.”

    https://www.theguardian.com/environment/2020/mar/22/tim-lang-interview-professor-of-food-policy-city-university-supply-chain-crisis

    Re AO/NZ centric?
    Of course! There are clear parallels here. Our farmers get a pittance for what they work incredibly hard for while they’re manipulated and abused by a corporate piracy that extends into OUR homes via the supermarkets and Banks.
    ‘Supermarkets’ and Banks are nothing short of criminal organizations well tuned to exploit farmers and manipulate us, the consumer.
    Add to the swindle that is our limping agriculture, covid-19 and climate change and we’re in deeper shit than red bands can save us from.

    • +1 countryboy

      People are complaining about the farmers which by the most part the small ones are wiped out by the supply chain being run by a handful of multinational supermarkets who control the pricing and supply of everything.

      Soon they will have wiped out the small farmers and we will be like the US where food supply is controlled by massive farms that reduce the quality and render bleaching needed to control the sanitation of the poor hygiene in their food supply.

      Supermarkets have been responsible for ‘dumping’ down our food and contributing to our current obesity and diabetes crisis with around 70% of NZ offerings highly processed foods (more profitable with high shelf life).

  5. It has taken some years to establish the Super Fund in spite of NACT not paying in but giving their corporate mates a tax cut.
    No investments have slumped and the Super Fund has gambled in the capitalist playground of shares, and lost some value. Panic. Did the gamblers think that wouldn’t happen.
    The safe investment would have been loaning back to NZ govt and we cut potential losses.
    But the Super Fund should not be scrapped. To do that would be very short term risky thinking.
    The Health system is a different identity that has been run down and restructured several times. Parallel to that has been the steady growth of the private health sector who now make money contracting out facilities to Public Health who can’t afford to build their own.
    Taxation as revenue for public and social services, infrastructure, Police, Defence , Health and Research; has been a football kicked around by NACT and neolib factions of Labour.
    Taxation for high earners and corporate investors has been progressively lowered and these are the people who use tax havens and other devices to ship money off sure with minimum taxation.
    With the virus it is obvious we need a much higher tax intake from those who have benefited from investment profits from NZ

  6. And now the the wasters are asking us to hand over our superannuation too.
    I remember my grandmother telling me how “pensions” for old people started in NZ. If I remember rightly she said they paid a shilling of every pound they earned. The security the old age pension, or now superannuation, gives one is right through one’s adult life. Knowing it is there as a back-up support when you retire and knowing it is there when you are retired and have little else to support you. Don,t smash something that is actually needed and working. Look at what is really wrong with the financial decisions that have been made over the years and fix that. Particularly superannuation paid out to people who have no “birthright ” to it.

    • When the usa stock market started crashing it dropped 10%,,, and I think that was reported as being 4 Trillion Dollars in value ,,,, then it got 1.5 Trillion thrown at it by the usa Govt ,,,,Its has now lost 35% of value ,,, which is roughly 13.5 Trillion dollars down ,,, gone burger.

      The stock market and financial sector has destroyed this wealth ,,, because the wisdom of greed was stupidly vulnerable to the inevitable.

      A virus crashed this Capitalist design flaw ,,, a speculation bubble popped and wasted money in amounts and at a speed, that no ‘left leaning’ Govt with spending on public services such as health, education, pensions ,,, ever could.
      ——————————————
      moving on …Was it cynical greed , or genuine stupidity, when our banks complained and threatened to leave NZ ,,,over Govt directions to increase their cash reserves ,,, to make them stronger and more resistant should unexpected tough times come,,,,,

      Was it our Govt ,,, or the bankers,, who were showing responsible planning for the future ???
      ———————————————————-
      We we can no longer tolerate or afford Tax Havens.

      Where corporations and the rich ,,, creatively steal from the resources of our society ,,, And are involved in Climate change, deforestation, Corruption and crime ,,,weapons and people smuggling ,,, and not paying tax.

      They drive poverty, exploitation and inequality.

      Tax vehicles do far more harm ,,, than serial killers driving around picking up hitch hikers.

      The Trumps, Clintons , Bushes etc etc all had their ‘tax vehicles’ parked in Tax Havens.

      ————————————————————————–

      Final thoughts ,,, the rich people overseas who have brought and built survivalist bolt holes here in NZ ,,,, should have the air taken out of their Life boats.

      Audits of resources in districts of NZ should be undertaken ,,, So that Civil defense type operations could be undertaken quickly ,,, and distribute needed resources in a organized manner to local populations ,,,should the need ever arise.

      This disaster planning will maintain cohesion and order in society until normal or new structure returns.

      It would be wise to check and search for military style weapons that these rich doomsday preppers probably have ,,,, and would undoubtedly used to stop their resources being shared in a disaster.

      Rich Survivalists and sovereign citizens would look for other lands to have their life boats in if they did not have their weapons protecting their ugly paranoia ,,,,

      Or they might even use their resources to help fix up their environments in the lands where they live.

      Popping their life boats is for the good of the world ,,,as well as ours,

      Sink their life boats ,,,, and level the world wide playing fields 😉

      We are in a unique position to do this world wide public service.

    • +1 On Watch

      Most people in Auckland stared out being keen for diversity. Then as it got more and more out of control and became a Ponzi. Then Aucklanders realised it was really a scam to get rich and middle class migrants into NZ to lower wages and more donations into local and central government and greed overtook logical thinking.

      In the last few years the Ponzi has been used to sell hundreds of thousands of NZ visas to the world’s middle class, to get generous NZ residency and benefits.

      Even now NZ politicians are in denial who don’t understand that most people now born in NZ are not ok with the way diversity which is really neoliberalism disguised as diversity, is being used in a terrible way for everyone else. Auckland is apparently 50% made up of migrants, yet 46% of people in this survey have a negative view of diversity.

      Just under half of Aucklanders have negative views of ethnic diversity, report suggests
      https://www.stuff.co.nz/national/politics/local-democracy-reporting/120506897/just-under-half-of-aucklanders-have-negative-views-of-ethnic-diversity-report-suggests

      So pretty much everyone not in on the scam in Auckland seems to have a negative view of diversity in Auckland.

      The woke can huff and puff all they like, the officials be in denial and disbelief, but anything woke is now is death to voters.

      Coronavirus is just yet another negative effect from NZ’s obsession with mass immigration and tourism. And this one is likely to kill a lot of people. There is nothing wrong with sustainable sensible immigration and tourism, but that is not what we have had in NZ for a decade and it’s getting worse.

      But the woke and right wingers will think it is all worth it. Woke thinking is killing people who are so obsessed with diversity, they consider disease control is actually racist.

      Now not only will our officials be responsible for a slow coronavirus response that is likely to kill people in NZ, but their woke thinking will also wipe out many people’s jobs and livelihoods just so that the woke and greedy can save $1 on wages per hour as they wanted the migrant workers still to come into NZ to pick Kiwifruit, or the tourist comes so that the hotel gets their money, the greedy politician gets that donation, or that electioneer decides that they might ‘annoy’ migrant voters if their relatives don’t get welfare here, and it’s more important not to do that, than save lives.

      Nice to see, NZ life is considered that cheap. Sarcasm.

  7. Imagine we were a high paid economy not a low wage one, which practically all commentators in NZ, including unions, seem to be most invested in keeping the low wage economy and lower wages going in terms of what they are proposing in the last few years.

    Instead of our taxes paying for the health system, our taxes are siphoned off to give to businesses getting taxpayer support with Working for Families, and accomodation benefit support, and making more profit while paying workers 0% pay rises aka supermarkets and fast food.

    Apparently those working on minimum wages with kids require $7,000 a year tax payer support even though they are working due to their low wages, while those who are on the so called living wage with kids only put forward around $7 p/w in taxes, which is not exactly enough to pay for a family of fours, health care, future pension and educational needs. The problem is that these low paid sectors are those that have been championed by government not looking at the ongoing costs of this, for infrastructure, social housing, health care, future super, and educational needs. Low wage industries are not industries that should be promoted for government expansion like hospitality and tourism. It is no surprise that low wage industries dominate the hundreds of thousands of migrant workers coming into NZ, that eventually or currently need NZ taxpayer support.

    Low wage industrie puts more stress on existing tax payers as other taxpayers have to support about 50% of NZ low/living wages but high profit businesses like supermarkets that could pay more but won’t!

    But nobody says boo anymore as too many people around government are invested in keeping this going!

    Not to mention pensions that have been letting hundreds of thousands of foreign pensioners to come into NZ and without paying much or any NZ taxes and somehow qualify for a NZ state pension. It’s crazy.

    This major problem was known about a decade ago but any debate around it is shut down and most newcomers into NZ on temp work permits and their children can use the NZ health system too for free.

    http://www.scoop.co.nz/stories/PO1110/S00572/grey-power-warns-of-impact-of-high-immigration-rates.htm

    https://www.radionz.co.nz/news/political/315435/migrants'-parents-cost-nz-'tens-of-millions

    The left are losing the battle, as instead of making those who don’t contribute to NZ, pay for NZ services or pay for private care here which would soften the blow, it seems to be to make those already paying NZ taxes and those born here, pay more taxes, get worse health care and reminders monthly that you will not get a pension or free care here anymore as NZ can’t afford it.

    If you are not part of the low wage or income less economy then the left message seem to be that you are too wealthy for the most part. They seem to want poor people and poorer people in NZ and to discourage people who have high paid skills to work in NZ. Again it’s crazy.

    As for housing not being a good investment, I suggest you look at the share market and Kiwisavers at present. Housing is not guaranteed but it seems a lot more robust than what the economists like Shamubeel Eaqub keep telling people to do which is invest in shares.

    And anybody who listened to NZ’s famously bad advice from MSM economists and financial commentators (and I know a number of people who did and are now in poverty following their advice), seem to be regretting it. In the US they and the MSM would be sued with the amount of bad financial advice being offered to the masses via paid/promoted advertorials by the same people.

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