Showing posts with label Superannuation. Show all posts
Showing posts with label Superannuation. Show all posts

Wednesday, January 22, 2014

When's a bribe not a bribe?

Don't you just hate it when someone has a novel idea, and then the Governmental grinches drop on it from a great height?

Last week Kim Dotcom announced he would be offering free wi-fi to the Upper Harbour electorate as part of his Dotcom political party's campaign for the 2014 General Election.

By my reckoning looking at proposed boundary changes it appears my electorate has changed from Helensville to East Coast Bays meaning an avoidance of being lumped into Upper Harbour. So there is no vested interest in the Dotcom Party's intention.

But even if there was, it appears the Dotcom Party's offering could be construed as an election bribe.

This is where there is a problem.

What actually constitutes an election bribe?

Obviously cash in the hand to vote for someone is a bit blatant, or is it?

Cast your mind back to 1975, and if anyone happening to have read this far who was born after that date doesn't know what happened then read on.

There was a certain gentleman purporting to represent the Conservative Party of the day, a bloke by the name of Rob Muldoon. He went up and down the country berating a New Zealand Superannuation Scheme that had been introduced by the Labour Government of the time which involved compulsory contributions by the working population. And it would be available for anyone over the age of 60.

Muldoon had reds under the beds, dancing Cossacks appearing in television election advertisements. He reckoned the Labour Government would buy up every industry in the country with the stash of money it would have. It was nationalisation by stealth. Apart from the fact that by statute it was impossible for the guardians of the Superannuation Fund to invest anything more than 15 percent in any one company, this went down well to a generation brought up on the worth of the McCarthy era, and I don't mean the rugby commentator Winston McCarthy.

Muldoon had them all thinking this compulsory superannuation scheme was the closest thing to communism they could imagine.

So what did he do?

Muldoon said he would do away with the New Zealand Superannuation Scheme and replace it with a National (remember that was the name of the 'Conservative' Party he led) Superannuation Scheme that no-one would have to contribute to. That's so those who supported him would remember forever where their Super came from.

It would be payable from the age of 60, and if those of that age felt like they wanted to carry on working, well they could have their salary from their employment, and Rob (that's Rob Muldoon) would pay their superannuation as well.

Of course, the generation that had fought a World War and had lived through the Depression of the 1930s were not even going to think twice about that. They became known as the 'greedies'.

It didn't matter that the scheme they voted in, because that's what they did, en masse, was the closest thing to communism it was possible to imagine. Their retirement was going to be paid for by a generation of baby boomers who were already coping with double digit inflation, and double digit mortgage interest rates.

Now if that's not a bribe I don't know what is?

And, of course, the country paid for his scheme in a huge way with more mad schemes, (remember the Sheep Retention Scheme when Muldoon paid farmers to keep their sheep that the world didn't want in the vain hope the world would recognise the fault of their ways and suddenly realise sheep meat was needed) resulting in the crisis that hit the country in 1984.

All of which leaves me feeling short-changed (deliberate pun that!).

Does it really matter if the good folk of Upper Harbour get free wi-fi or not?

Is it doing anyone any real harm?

It might create some wi-fi envy in other electorates.

But is it going to have the long-term cost that Rob Muldoon's superannuation scheme had?


Which 'bribe' has the greatest cost?

Tuesday, June 12, 2012

The 'Key' to superannuation


Superannuation - What is it about National Governments and their inability to make decisions in the interests of the country when it comes to the basic issue of superannuation?

Prime Minister John Key has painted himself into a corner over his claim that the age of eligibility for superannuation, 65 years, will not change on his watch.

It is patently obvious that superior lifestyle has resulted in people living longer. In many instances that means people are capable of working longer. Of course, there are exceptions and there are people to whom working beyond 60 years is an issue.

But, generally, New Zealanders can expect that the majority of the population will be capable of working longer in the future – in many cases they will have to because the drain of young people offshore looking for work, a drain that the said Mr Key was going to stop when he was campaigning against Helen Clark and Labour in 2008, has reached epidemic proportions

It remains a frustration for this observer that in the leadership debates of that campaign the incumbent Clark did not challenge Key when he was blathering on about stopping the brain drain. All she had to do to end the argument was ask where Key had earned the money that allowed him to have the lifestyle he enjoyed? It certainly wasn't from years spent working his way up from the back benches in New Zealand.

But then again the fight was no longer in Clark – she had had enough it would seem.

However, it seems that in sticking to his claim over the eligibility age that Key is determined to avoid the back flip that George Bush the first suffered over his pre-election campaigning on 'No More Taxes'. A promise that was very quickly undone once he replaced Ronald Reagan in the White House.

Back in New Zealand the age of eligibility has become an issue for which the public may well be prepared to punish the government, which is plugging austerity in all other areas of the economy.

Let's not forget that it was Robert Muldoon who showed a flagrant disregard for the future by throwing out the compulsory superannuation scheme set up by Roger Douglas in the Kirk-Rowling Government of 1972-75.

Dancing Cossacks flashed across television screens, catching the eye of those nearing their retirement sufficiently to put Muldoon in power with his promise that he would close the scheme down and install a scheme that would mean once reaching the age of 60 people would be able to receive National's superannuation, even if they were still working! Let's not forget that – they were still able to receive the payout if they were still working.

It is little wonder that generation were known as 'The Greedies'.

In making that choice Muldoon sent New Zealand into permanent debt. There are two thoughts here: how much of the country's financial frustrations of the moment are a direct result of that decision and, more importantly, how much better off might New Zealand be had he not made that choice?

Muldoon trumpeted that the New Zealand Superannuation Scheme was going to result in the nationalisation of New Zealand's industries. It was going to be communism by stealth. The Greedies were sucked in lock, stock and Think Big.

In fact, and to their shame the Labour Government of the day did not make this point sufficiently, it was enshrined in law that the NZ Super Scheme would not be allowed to invest any more than 15 percent in any New Zealand company. 15 percent!!

That figure is important because Key and his Cabinet are asking that the New Zealand Superannuation Fund set up by Labour's Michael Cullen should invest up to 40 percent in New Zealand companies.

What would Muldoon make of that? If what he canned in 1975 was communism by stealth what does 40 percent investment represent?

Just as Muldoon's failure hamstrung a generation, so Key's foot-dragging is likely to do for the generations who follow those who move into retirement over the next 20-odd years.

It is only commonsense that a phased rise in the eligibility age be introduced as soon as possible.

So poll-driven has the Government become that there is a chance that Key will see the error of his ways and make a decision forthwith.

His highly unpopular austerity measures continue in other aspects so it defies belief that the one popular measure he could implement, and with exceptions for those whose work might qualify for a maintaining of retirement at 65, could elude him.

Failure to act leaves him facing the same sort of legacy his predecessor Muldoon enjoys for his greed for power at any cost.