- - - - - - - - - - - - -

Wednesday, February 25, 2009

Didn't John Key say he would resign if the Super was touched?


No guarantee over Super Fund contributions
Finance Minister Bill English says he can not rule out suspending contributions to the New Zealand Superannuation Fund.

Ummmmm - didn't John Key say that he would resign if he changed the super fund?
Key wavers on super funding
Mr Key promised on the campaign trail to resign as prime minister if a National government broke its promise to keep pensions at their current rate.

How would pensions stay at their current rate if National stop funding the super fund?

19 Comments:

At 25/2/09 4:56 pm, Anonymous Anonymous said...

Bomber - Could you explain to me why we should continue to borrow to invest in a super fund that invests mainly in offshore equities that have lost billions in the past year? How is this making money for future pensioners?

 
At 25/2/09 4:59 pm, Blogger Bomber said...

Anonymous - did John Key say he would resign if he broke his promise to keep pensions at their current rate and how will that be kept if the super fund is cut?

Oh and while you are at it anon, why are we borrowing for tax cuts?

 
At 25/2/09 5:16 pm, Anonymous Anonymous said...

Bomber - so to be clear you don't want to borrow for tax cuts but happy to borrow to invest in the super fund. could you explain the difference?

 
At 25/2/09 5:51 pm, Anonymous Andy said...

so to be clear you don't want to borrow for tax cuts but happy to borrow to invest in the super fund. could you explain the difference?

Borrowing for tax cuts is like taking out a loan for a car, the value of the car (tax cut) depreciates quicker than the value of the borrowing.

Borrowing for the super fund is like borrowing to buy a business, in the long tern you pay the loan back and have an asset that creates revenue.

When you finish paying for the car its a rusty piece of shit thats useless. Paying me back some of my tax today by borrowing so that in the future you have to raise my taxes to pay back the tax cut is so stupid it hurts...

 
At 25/2/09 6:06 pm, Anonymous sdm said...

Andy

Bullshit - borrowing to invest in a fund that loses money makes zero sense....

 
At 25/2/09 7:08 pm, Anonymous Anonymous said...

Key wont resign cause hes like all tories...a bullshit artist!

 
At 25/2/09 7:24 pm, Anonymous Andy said...

Bullshit - borrowing to invest in a fund that loses money makes zero sense....

Like a business in the short term you have to keep pouring in capital, it will eventually return on the investment. So the government can borrow at a lower rate (from us) and invest at a higher rate, in the bank. Who said the borrowed money had to be put in loss making ventures?

What return do we as a society get on tax cuts? Recent evidence in Aussie and the US shows that the majority of tax cuts in these times goes into reducing debt not spending. So borrowing to reduce other peoples debt is even dumber!

 
At 25/2/09 9:36 pm, Anonymous Anonymous said...

Andy - awesome thanks for the clear answer I understand now. Rather than the government giving me back my money now for me to do something fucking crazy like save for my kids education or pay of my home loan or something equally reckless, I am better to give my money to the government now for them to gamble (sorry invest)for my future. I guess big brother knows best :)

 
At 25/2/09 9:57 pm, Blogger homepaddock said...

Key said National wouldn't touch super payments ie what people receive, he didn't talk about changing - or not - the method of funding the payments.

 
At 26/2/09 6:22 am, Blogger Bomber said...

Well argued andy

Key said National wouldn't touch super payments ie what people receive, he didn't talk about changing - or not - the method of funding the payments.

Hold on HP - if the method of funding changes how can the same amount be paid out?

 
At 26/2/09 7:54 am, Anonymous sdm said...

Well the greater risk to super outs would be to borrow money to invest in the fund - because you still have to repay it, with interest.

Bomber you are predicting the market to tank. Why should the government, using your logic, be investing borrowed money?

 
At 26/2/09 8:33 am, Anonymous Anonymous said...

The bloke on Breakfast said it best. If its such an awesome idea at the moment to borrow $2billion a year to invest in equities why not borrow $40billion?????? Oh thats right no one would lend that amount for such a fucking crazy idea.

 
At 26/2/09 11:01 am, Blogger Bomber said...

The bloke on Breakfast said it best. If its such an awesome idea at the moment to borrow $2billion a year to invest in equities why not borrow $40billion?????? Oh thats right no one would lend that amount for such a fucking crazy idea.
Yet borrowing for tax cuts is a great idea?

 
At 26/2/09 11:05 am, Anonymous Anonymous said...

I mean, there is plenty to criticise this (or any) government on, but the "Key will cut pension payments" one is just incoherent.
Superannuation is not currently paid out of the Super Fund - currently the fund is just accumulating capital so that in the future, some part of the Superannuation budget line item can be drawn down from the income off the fund's investment.
As for the questions, "if the method of funding changes how can the same amount be paid out?" - it can be paid for in the future at the same rate the same way it is now, through taxes or borrowing.
If we keep putting contributions into the Fund while running a deficit, we are already borrowing to pay for future Super payments anyway. Supporters of the Fund are betting that over time, the amount returned from the Fund (ie the profit from global financial markets) will more than pay for the extra debt incurred for a few (up to ten?) years. That's not a statement on the level of super payments, it's a bet on the performance of markets. It may be right, or wrong, but the argument is not connected with the actual amount of cash superannuitants get in the hand.

 
At 26/2/09 11:08 am, Anonymous Observer said...

"if the method of funding changes how can the same amount be paid out?"

How sad is this question?
Super today is NOT funded from the Super/Cullen fund, that will not be supplying ANY funding to our pensioners for another 20 or so years! TOday's super is paid from today's revenue, and will be for a long time, so saying the level of payment (66% of the average wage) will not change is not under threat as of today, tomorrow, or the next 6 Parliaments at least!

 
At 26/2/09 11:52 am, Blogger Bomber said...

Right and borrowing for tax cuts Observer?

 
At 26/2/09 12:54 pm, Anonymous Anonymous said...

Depends upon your view whether you think NZers need tax cuts. An increasing number of businesses have implemented wage freezes including mine. At least the tax cut will help offset increased cost of living and flat wages.

Bomber - Simple question which you haven't yet answered. Should we be borrowing $2billion to invest in the global equities at the present time?

 
At 26/2/09 1:01 pm, Blogger Bomber said...

Depends upon your view whether you think NZers need tax cuts. An increasing number of businesses have implemented wage freezes including mine. At least the tax cut will help offset increased cost of living and flat wages.
That's an arguement to increase the minimum wage 'anonymous' not an arguement to put through tax cuts that benefit the wealthy.

Bomber - Simple question which you haven't yet answered. Should we be borrowing $2billion to invest in the global equities at the present time?
I've written an entire blog on my thoughts re the super fund above this one.

 
At 26/2/09 1:31 pm, Anonymous Bills mate said...

Super today is NOT funded from the Super/Cullen fund, that will not be supplying ANY funding to our pensioners for another 20 or so years! TOday's super is paid from today's revenue, and will be for a long time, so saying the level of payment (66% of the average wage) will not change is not under threat as of today, tomorrow, or the next 6 Parliaments at least!

Yet Bill English disagrees with you Observer, Bill points out that any reduction will have to be made up by the Government later in it's term...

Under the rules governing fund payments, the Government can suspend contributions but it must make up the difference in the future.

 

Post a Comment

<< Home