449 point NZ Stock Market bloodbath as Trump plunges planet into trade war

In 1974, the then New Zealand Labour government introduced a compulsory superannuation scheme, requiring mandatory contributions from employees and employers, which was scrapped by the National government in 1975. The scheme was the brain child of Roger Douglas, and a precursor of Labour’s neoliberal economic restructuring of the following decade. Its two key features were that it made all wage workers into capitalists, and entrenched economic inequality as a guiding principle of Labour governments. Muldoon replaced the Douglas super scheme with the universalist scheme that we still have today, which gives all New Zealanders the same quantum of state funded retirement income.
Would the Labour scheme have produced a sovereign wealth fund sufficiently large to assure the future of New Zealand capitalism as its proponents argue? Possibly, but it is more likely that the scheme would have taken a minority or even a majority stake in many enterprises which would then have been used to pillage the working class, rather as the electricity industry or Air New Zealand does today. Profits would have gone unequally to retired wage and salary earners after the bureaucrats and private equity owners had taken their cut.
Turning workers into capitalists may make capitalism more secure, but it does not make it any more benign.
Right now many Kiwi Saver account holders will be seeing that capitalism does not offer an easy and certain road to riches. Having said that, they should not be too worried. Despite all the hysteria, the capital markets have only gone through a very small correction.
By all means do check your Kiwi Saver. Then think about whether this really is the kind of system which makes for a secure retirement and an easy conscience.

2 COMMENTS

Peter April 7, 2025 At 5:44 pm

Best case is, it’s a correction and markets were over priced with all the cheap covid money. Kiwi saver in its present form is pathetic. Muldoon scrapped what would now be a gold plated scheme which would have seen ordinary kiwi owning the 4 big banks thru their super schemes. Profits to the working class not the Aussies.
Geoff Fischer April 7, 2025 At 9:40 pm

In 1974, the then New Zealand Labour government introduced a compulsory superannuation scheme, requiring mandatory contributions from employees and employers, which was scrapped by the National government in 1975. The scheme was the brain child of Roger Douglas, and a precursor of Labour’s neoliberal economic restructuring of the following decade. Its two key features were that it made all wage workers into capitalists, and entrenched economic inequality as a guiding principle of Labour governments. Muldoon replaced the Douglas super scheme with the universalist scheme that we still have today, which gives all New Zealanders the same quantum of state funded retirement income.
Would the Labour scheme have produced a sovereign wealth fund sufficiently large to assure the future of New Zealand capitalism as its proponents argue? Possibly, but it is more likely that the scheme would have taken a minority or even a majority stake in many enterprises which would then have been used to pillage the working class, rather as the electricity industry or Air New Zealand does today. Profits would have gone unequally to retired wage and salary earners after the bureaucrats and private equity owners had taken their cut.
Turning workers into capitalists may make capitalism more secure, but it does not make it any more benign.
Right now many Kiwi Saver account holders will be seeing that capitalism does not offer an easy and certain road to riches. Having said that, they should not be too worried. Despite all the hysteria, the capital markets have only gone through a very small correction.
By all means do check your Kiwi Saver. Then think about whether this really is the kind of system which makes for a secure retirement and an easy conscience.

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