Home > Dollars & Sense, Social Issues, The Body Politic > David Parker has nailed it 100%

David Parker has nailed it 100%

|

|

This media report is worth reprinting in it’s entirety. Because, quite simply, David Parker is 100% on the nail on this issue,

|

National’s neglectful attitude to lifting our savings rate is something New Zealand can ill afford, Labour’s Finance spokesperson David Parker says.

“Bill English might believe Kiwis have been ‘scared’ into saving by the global recession and won’t return to borrowing as the economy grows, but he’s obviously got blinkers on.

“The economic settings that led to excessive borrowing are still in place – speculation in housing and farmland for capital gain still attracts a tax advantage and National’s policies have made Kiwisaver less attractive,” David Parker said.

“Unless real policy changes are made New Zealand will just go back to borrowing too much and saving too little when the economy eventually recovers.

“The Australians, who already have a universal workplace savings scheme, are increasing the savings rate to 12 per cent, up from nine per cen. The government there knows that once the recession is over behaviour will return to type unless it makes the changes that are needed.

“Treasury forecasts show Mr English’s blind faith is misguided. It projects that every year, under National’s policies, the country will run a current account deficit and increase its international debt.

“By 2016, New Zealand will owe nearly $200 billion in net overseas debt, up $50 billion from today.

“And the main driver of that debt spiral is a lack of domestic savings, with banks and businesses borrowing from offshore or selling assets to foreign investors.

“This leads to some $10 billion a year flowing offshore in profits, the main contributor to our current account deficit, which is then funded by further borrowing and asset sales.

“The government needs to break the cycle with policies that ensure New Zealand permanently lifts its savings level. By not doing so it shows once again its unwillingness to deal with the structural problems in the economy,” David Parker said.

|

Our Aussie cuzzies have approximately A$1.31 trillion saved in their compulsory super fund.,

Industry Overview

Total estimated superannuation assets increased to $1.31 trillion in the December 2011 quarter. Over the 12 months to December 2011 there was a 1.2 per cent increase in total estimated superannuation assets.” – Source

The clever buggers realised back in 1992 that a nation cannot be sovereign and self-sufficient if it has no savings, and has to rely on overseas borrowings.

We had our opportunity for a compulsory super fund in the 1970s, with a programme that was introduced by the Norman Kirk-led Labour government.

Unfortunately, Rob Muldoon promised to can the Fund and return the money to each contributor – if we voted for National in 1975. Well, we took the bait; voted National; Muldoon fulfilled his “promise”; and now New Zealand’s  “private-sector debt at 30 June 2010 was $315 billion and 166% of GDP“.

New Zealand First and Labour’s policy of a compulsory super fund makes good economic and social common-sense.

Unfortunately,  New Zealanders aren’t terribly good at making good economic and social common-sense decisions.

|

* * *

|

Additional

Key: Private sector debt NZ’s biggest concern

Government debt rises to $71.6 billion

Treasury:  Private-sector debt and factors affecting it

Who says the Govt doesn’t have a plan?

|

|

= fs =


  1. Superfundman
    14 March 2012 at 8:43 pm

    Superannuation or super is a way of saving to provide an income during retirement. Superannuation funds have an advantage over normal savings accounts because they pay less tax.

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: