Commentators Matthew Hooton and John Roughan agree on super and the “Blue Chip” plan of Labour. John Roughan says;
If your income is down in the recession and you are taking on debt to maintain the family’s living standard, would you borrow a bit more to put into a superannuation fund?
Nor would I. Nor would John Key, Bill English, Phil Goff, Jim Anderton or Peter Dunne, I suspect. Sometimes the simplest decisions test the mettle of those who lead us.
Nope, no-one sensible would do it, so one wonders why Phil Goff wants us to implement Labour’s “Blue Chip” plan and borrow more so we can save it.
English said the question had yet to be seriously considered. Anxiously he added that a suspension of contributions would not affect payments to superannuitants.
This is where Bill English gives me the shits. He should have very quickly and very simply scotched the idea of borrowing to fund our future reitement plans and labeled it voodoo economics. But no, the Dipstick from Diptn prevaricates, his default setting.
Goff, smelling fear, declared Labour opposed to suspension and called on the Government to make its position clear. Anderton called it “raiding the piggy bank”. Dunne, minister of tax collecting, declared it “a very bad idea”.
Goff is acting like a desperate soon to be replaced fool, Anderton is perhaps the worlds best pratictioner of voodoo economics and if Peter Dunne thinks somehing is a good idea then it probably isn’t.
Matthew Hooton echoes these sentiments, but unfortunately the neanderthals at NBR don’t see the merit of putting Hootons pearls of wisdom online but chuck Farrar’s drivel up every week. Nevertheless I will re-type some Hootons best parts;No wonder Bill English appears confused over whether to suspend contributions to the Superannuation Fund: the economics is all one way and the politics all the other.
No rational household or investor, struggling to pay for their groceries – and forecast to spend more than they earn every year into the future – would borrow to invest in global sharemarkets, notwithstanding current interest rates.
Mr English knows this as clearly as anyone.
The only thing Bill ENglish knows is to prevaricate and to lose elections.Mr English is not making the presentation of the inevitable any easier in confusing its rationale.
This week, he said one of the factors driving his thinking is that the Fund has lost $5.5 billion in 18 months.
“We have to look at whether we are happy at the size of the investment losses we are incurring,” he said. “I mean, $5.5b of losses actually wipes out two years of contributions.”
This is the wrong way to look at the issue and it is extraordinary a Finance Minister would make such a basic error.
Past performance of an investment fund says nothing about its future performance, and if Mr English is so sure multi-billion-dollar losses are likely then he has an obligation not just to suspend contributions but to order the Fund to get the remaining $12 billion of our money out of global sharemarkets right now.
Yeah, and it is right about now that Hooton should ask that Bill English just STFU, but Matthew is much too polite for such crassness. I, however, have no hesitation at all in doing exactly that.
Hooton makes a good point, if what Bill English says is true then lets reef out the the other $12 billion and do something else with it useful.
It makes no sense at all to continue to borrow after Michael Cullen wantonly destroyed the legacy of Bill Birch and Ruth Richardson and left New Zealand facing a decade of deficits.
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