Superannuation expert Michael Littlewood has five proposals for the Government:
- Review the need for the New Zealand Superannuation Fund
- Change the NZSF’s investment strategy
- Stop pre-funding the ACC’s liabilities
- Remove the rest of KiwiSaver tax breaks
- Fix the income tax system
I very much agree on (1). We are now borrowing every dollar we invest in the fund. At a minimum contributions should be suspended.
In (2) Littlewood proposes that there be no minimum proportion to be invested in NZ (as National proposed) but instead it should be directed to “invest in new businesses or in the growth of existing businesses that, for example, have export potential.”
I disagree with both National, and Michael. I want the NZ Super Fund Trustees to focus on just one thing – maximising returns over the long term. This fund is designed to help fund future Superannuation.
If there is a desire to have the Government invest in businesses to help with job growth (I am not convinced), then that should be done from a seperate fund – maybe through NZ T&E.
Also not sure I agree on (3) but open to persuasion. I don’t think we should move to full funding of liabilities too quickly, but it is a desirable end goal. Partly because it would also allow private sector to compete fairly also.
On (4) I agree. The employer contributions provide enough of an incentive to go into KiwiSaver – an effective 1:1 subsidy.
And totally agree on (5) that the tax system needs a total overhaul.