Latest news with #RobertMuldoon
Otago Daily Times
5 days ago
- Business
- Otago Daily Times
Tough KiwiSaver changes
The milk was spilt in the retirement savings failure of 1975. How different and more prosperous might New Zealand have been if Labour's compulsory scheme had endured? Most retired New Zealanders would have had substantial nest eggs, and the nation would have benefited from the massive savings pool. Instead, Robert Muldoon stormed to power, and that was that. Universal New Zealand Superannuation, funded through taxes, took its place. Mr Muldoon described the scheme as socialist. Cossacks, epitomising a Soviet-like future, danced across television screens in an infamous and scurrilous ''attack'' advertisement. The respected financial analyst, the late Brian Gaynor, once described the abolition of the Superannuation Scheme as New Zealand's worst economic decision since that date. The scheme mandated 4% from employee and employer — the same figures Finance Minister Nicola Willis outlined in the Budget. She said minimum contributions would rise in two stages from the present 3%. In 2007, the Labour-led government, under prime minister Helen Clark and finance Mmnister Michael Cullen, introduced KiwiSaver. Designed as a voluntary, work-based scheme, KiwiSaver aimed to encourage long-term retirement saving and reduce reliance on government-funded pensions. It was not overturned by National. Initially, a $1000 kick-start encouraged participation, abolished by the National-led government in 2015. The annual contribution of up to $1042.82 halved in 2011 as part of cost-saving measures. Now, the government has announced the halving of the halving. More than $1000 in 2007 reduces to $260.72 in 2025 dollars. The cut is a money grab from a finance minister desperate to trawl for savings, estimated at $575 million a year for this measure. However, that contribution is proportionately more valuable for lower-paid workers. Their retirement savings, or first-home deposits, will suffer accordingly. Treasury and officials' advised Ms Willis that the contribution was ineffective as an incentive, an assertion to be treated sceptically. Ms Willis lacked the boldness to abolish the contribution altogether. Given the large sums, Labour should face pressure on whether it would reinstate the contribution. It failed to reinstate the kick-start or the $1042.86. Less disputatious is the decision to eliminate the contribution for those earning more than $180,000, a move that saves about $160 million a year. Increasing minimum contributions is fundamentally positive, although it comes at difficult times for employers and employees under economic pressure. An extra 1% will be hard to find for many. Increased contributions could also strengthen National's case to raise the superannuation age. There is a long, long way to go to match Australia's 11.5% saving (soon to rise to 12%). Furthermore, the entire 11.5% is untaxed, whereas New Zealand reduces employer KiwiSaver contributions through tax at the employee's marginal rate. Many retired Australians are now relatively wealthy. Government superannuation there is means-tested. The extra 1% bill for the government, as a huge employer, will be about $700m a year. Yet, the government and Treasury have made no allowances for this. It is either a ''fiscal cliff'' as the Greens have claimed, or it becomes absorbed into wage increases. In theory, KiwiSaver should be in addition to wages and salaries. In practice, it is often part of the salary package. Thus, the employee, in effect, pays some or much of the employer's contribution. The government's move to extend KiwiSaver to 16 and 17-year-olds is welcome. It encourages savings early. KiwiSaver has helped many New Zealanders into their first home and grow their retirement savings. But its benefits could never be spread evenly. Those in lower-paid jobs will have lower balances. Some, too, opt out, unable to afford the 3%, let alone 4%, or too tempted to spend that money elsewhere. Those who take time out of the workforce, often women, will inevitably be disadvantaged. KiwiSaver has, overall, been positive for many New Zealanders, despite average balances of only about $40,000. Erosion of the tax credit is a step backwards, one that significantly affects retirement security.
Newsroom
27-05-2025
- Business
- Newsroom
Calls grow louder for Reserve Bank to cut rates by 50pts
As another Budget Day is consigned to the history books, the focus again turns to the Reserve Bank's latest assessment on the state of the economy. The central bank also faces an opportunity of its own: to match the Government's so-called 'growth' rhetoric with a super-charged rate cut of its own. Who wouldn't want to see a rate cut surprise this Wednesday? More than a few business leaders will no doubt have spent the weekend turning over in the minds how they might take advantage of the Government's new 'Investment Boost' scheme incentivising business with generous tax rebates on capital purchases. It was a welcome bright spot on an otherwise dismal budget outlook that reinforced how little room the Government has to manoeuvre currently. Not that the scheme will move the needle on the economy by that much. Finance Minister Nicola Willis estimates a 1 percent boost at best. But it's a start. If there was one very obvious theme emerging from Thursday's budget it had to be the fact that future government surpluses now largely appear to be a thing of the past and any that are forecast five years hence will barely be worth the paper they're written on. Political historians will also have noted the rich irony that it was former National Party leader Robert Muldoon who, as opposition leader in the run up to the 1975 election, accused then Prime Minister Bill Rowling of adopting a 'borrow and hope' mentality when it came to Labour's plans for the economy. 'I'm frustrated . . . at the lack of understanding of what Kiwi businesses were going through out there. The time for easing was the beginning of 2024, not the end of 2024. We're a bellwether and we've had more clients go into receivership or liquidation in the last 12 months than in any of the other cycles.' Steve Bonnici, Urgent Couriers Now it seems both sides of politics are united in their belief that we just have to keep on borrowing and hoping that things will improve – eventually – as the numbers continue to grow exponentially and become ever more eye-watering. Gross government debt is now projected to increase by $73 billion by 2029 according to Treasury's latest forecasts and servicing that debt will now cost an additional $3.6b more over the next four years. Bond yields will rise But what seems to be unrealistically optimistic in the forecasts is the assumption that the yield on New Zealand 10-year government bonds will ease to 4.3 percent next month and remain relatively unchanged at that rate for the next four years. As of Friday, the rate stood at 4.7 percent. Just take a look at US Treasury yields last week to get a taste of what might be around the corner. The US 20-year bond soared past 5 percent for the first time since the 2007/08 Global Financial Crisis. Investors are demanding a higher return for the risk they are taking on. This is quickly becoming a universal trend on bond markets globally. Which brings us to this week's official cash rate decision by the Reserve Bank. The central bank's last decision on April 9, just a week after US President Donald Trump's Liberation Day tariff announcements had financial markets in a tailspin and just a few weeks after the shock departure of former Reserve Bank governor Adrian Orr, leaves his replacement Christian Hawkesby with an opportunity to now stamp his own mark on monetary policy. It's time to return to the double 50 point cuts says Kiwibank chief economist Jarrod Kerr. 'The economic developments since the Reserve Bank's last monetary policy statement have deteriorated here, and especially offshore. The justification of a more 'go for growth' focused Reserve Bank has strengthened. Hawkesby (hopefully Dovesby) could easily deliver a 50 basis point move this Wednesday and signal another 50 point move to 2.5 percent to come. That would set policy about right for a recovery.' Let's stop delaying the inevitable with these overly cautious 25 basis point moves, Kerr says. 'A more decisive Reserve Bank would be viewed positively by everyone, particularly given the difficulty the Government had in balancing its budget this year. Next year's is likely to be even more difficult,' he argues. 'If, however, Hawkesby decides to play the 'nightwatchman', then we may just get a 25 basis point cut and little else. That's precisely what we don't need and we'd argue it would show an Reserve Bank out of touch with our economic reality.' In his official cash rate preview, Kerr also quotes a recent guest on Kiwibank's weekly podcast to illustrate his point. 'We're a bellwether' Urgent Couriers' managing director Steve Bonnici said he feel the ups and downs of the economic cycle before most. When asked about the current cycle and the Reserve Bank monetary policy actions, Bonnici said: 'I'm frustrated . . . at the lack of understanding of what Kiwi businesses were going through out there. The time for easing was the beginning of 2024, not the end of 2024. We're a bellwether and we've had more clients go into receivership or liquidation in the last 12 months than in any of the other cycles (back to the 1980s).' Kerr said Bonnici's comments are reflective of what he's hearing from the vast majority of Kiwi businesses who continue to struggle. As to what he expects the Reserve Bank will do on Wednesday, versus what he would like them to do, Kerr says a 25 point cut accompanied by a lowering of the official cash rate track would be a likely compromise. 'Currently, most economists sit between a low of 2.5 percent (Kiwibank) and a high of 3 percent. This scenario will push most economist forecasts below 3 percent to a 2.5-2.75 percent range. ' The wholesale rate markets currently imply an official cash rate terminal rate of 2.85-2.9 percent. We should see a (very) slight reduction in rates, supporting current mortgage rates. The variable and 6 month rates would move lower, but the 1 year and beyond wouldn't move much at all. However, that's not what we need either.' Kerr says the Reserve Bank's current trajectory is unlikely, in his view. 'Get to neutral, and get the economy moving. Ultimately, it's better to act swiftly and decisively to get lower rates feeding through faster. More meaningful cuts are required here and now.' Now we wait until Wednesday for the official verdict. Coming up this week Monday Residential Mortgage Lending (April) – RBNZ Turners Automotive – Full year result Kiwi Property – Full year result E-Road – Full year result Tuesday NZ Institute of Economic Research Quarterly Predictions Asset Plus – Full year result Wednesday RBNZ Monetary Policy Statement Business Count indicators – Stats NZ Employment indicators – Stats NZ F&P Healthcare – Full year result Rakon – Full year result Infratil – Full year result Smartpay Holdings – Full year result Thursday ANZ Business Outlook Mainfreight – Full year result Ryman Healthcare – Full year result Goodman Property Trust – Full year result Trade Window Holdings – Full year result Marsden Maritime Marine – Special Meeting Friday
The Guardian
05-02-2025
- Entertainment
- The Guardian
Guy Williams: the 10 funniest things I have ever seen (on the internet)
I really appreciate this opportunity. I want to say that I read the Guardian almost every morning, and it is a terrible start to my day! Sometimes I wish you jokers would cut back on the all investigating of all the bad stuff that's happening because it's a major downbuzz. But I do respect your work. As the world's democracies are pulled back into darkness by social media disinformation funded by corporations and billionaires, I appreciate the Guardian's journalism as one of the last reminders of civilisation. So as a token of my appreciation, I will now reveal 10 funny things I remember from back before Steve Jobs ruined the internet by making it appealing to idiots via phones. People from overseas might be stunned to learn that in 1984 the New Zealand prime minister Robert Muldoon, struggling in the polls, went into his office and got wasted. When he came out later that night (visibly drunk) he fronted the nation's media and announced a snap election. Spoiler alert: the election went badly and he famously closed a TV debate by telling his opponent he loved him on air and then allegedly started to cry. That was when New Zealand got its first dose of neoliberalism. What a country! John Clarke is one of New Zealand's greatest comedians and one of the first to break through in Australia … I hope to be the second! One of New Zealand's most beloved variety acts, Jools and Lynda Topp are two yodelling lesbians who have spent their career fighting for gender, sexual, and racial justice. Check them out on YouTube, they have an amazing vibe and I guarantee you will smile watching them. Flight of the Concords' One Night Stand on HBO was the performance that got me into comedy. Like every other 18-year-old in 2006 I was obsessed with them and the fact they were Kiwis was a genuine source of national pride for me. I love musical comedy so much I add it to my phone and play it in my general music mix like it's Rihanna. Then I get in the car and my passenger is like 'WHAT THE HECK IS THIS?' I love Marcia Belsky so much I genuinely get chills when she sings the part where Sally Ride feels proud. This is embarrassing but I decided to chuck in one of my own clips … I was going to put in just the viral voice message that inspired this story but that's only 60 seconds long. I may as well give you the option of watching more if you want it … I should also mention that Karen and I also did a podcast available now on all platfor … OK I'll stop! Gala sets are really hard because they're so short. This is probably the best I've ever seen. Another cracking gala performance. Two Hearts (Laura Daniel and Joseph Moore) are the next great NZ duo and probably our best musical act at the moment. Intentional shots fired at my brother, Paul Williams. I love political comedy and Aamer Rahman is pretty much the king, now that Dave Chappelle has well and truly abdicated the throne by retiring from the art form to focus on destroying his own legacy. Probably the best modern double act I've ever seen. I love Ian Boldsworth (Peacock), and Ed Gamble is the perfect straight man. It's also cool to see him before he got shredded! Congratulations! You made it to the end of my list! May peace prevail on earth! Kia ora! Guy Williams is touring Australia and New Zealand from 7 February (and potentially the UK later in 2025). Visit his website for dates and ticket info
