Barry Soper: So what could a Kiwi utopia look like today?

Author
Barry Soper,
Publish Date
Fri, 5 Jul 2019, 9:07AM
New Zealand, the land of milk and honey. Photo / Getty Images
New Zealand, the land of milk and honey. Photo / Getty Images

Barry Soper: So what could a Kiwi utopia look like today?

Author
Barry Soper,
Publish Date
Fri, 5 Jul 2019, 9:07AM

COMMENT:

New Zealand, the land of milk and honey, the half gallon, quarter acre pavlova paradise.

Well that's the way we used to think of ourselves.

So what could a Kiwi utopia look like today?

We'd be seen as the Antipodean Tiger, the envy of the rest of the world.

We'd have a current account surplus and one of the lowest interest rate structures in the world, ranking in the top five of OECD countries.

We'd own the ASB and the Bank of New Zealand, and most of the other companies that have been flogged off overseas.

We'd all live in a comfortable retirement and would have one of the best education and health systems in the world.

Sounds too good to be true.

Well that's most certainly what New Zealand would have looked like if one highly paranoid man didn't have a rush of blood to the head in 1975.

That's certainly the view of Brian Gaynor who's spent his life analysing assets and the economy and knew what he was talking about in a column in the Herald 12 years ago.

Gaynor was writing about the first action of the Rob Muldoon Government in 1975, taking apart the 37 month old compulsory superannuation scheme put in place by the one term Kirk Labour government.

That destroyed this country's potential where if the fund had continued it would have a dozen years ago been worth $240 billion.

It'd obviously be worth considerably more today.

Muldoon's Dancing Cossacks television ad of that year painted the Government as jackbooting its way towards a state-controlled economy similar to the Soviet Union.

It took more than a quarter of a century for the Clark Government to put in place another Super Fund, today worth more than $40 billion with a healthy annual average return of more than 9 per cent, one of the best performing funds in the world.

The annual cost of the old age pension then was around $5 billion a year and in just over 10 years' time it is predicted to reach $20 billion.

Two people have stuck their necks out, writing a report for the currently non-existent Retirement Commissioner's triennial review, saying the fund should be scrapped and the money used to repay Government debt, which by international standards is quite manageable.

Michaels Chamberlain and Littlewood, investment and pension consultants respectively, argue the pension is affordable.

They do make one very reasonable point though and that's to take superannuation off the political table and for the politicians to make decisions that are best for the country, rather than for winning an election.

Although it's too late, Jacinda Ardern's staked her job on not raising the pension age from 65.

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