Friday, 07 November 2008 10:23
Graham
Version 2 of a discussion paper “Economy on the Edge: Swan Dive or Belly Flop?” written by authors David Skilling, CEO of the New Zealand Institute and Mark Weldon, CEO of NZX was released on Tuesday (4th November).
It's a brilliant document and a great example of how the business community can provide great policy ideas. I hope the next government takes the output of this effort seriously.
One item of note is the proposal to transition KiwiSaver to a compulsory scheme over the next few years. Personally I'm not in favour as this contradicts my 'independent' ethos. But, good for New Zealand? Perhaps.
At any rate, my money is on KiwiSaver becoming compulsory by 2015.
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Wednesday, 29 October 2008 07:20
Graham
The recent market turmoil has reminded me of one of the principles of investing.
When starting out in investing, you can be faced with the decision 'Do I invest all of my money now?'.
No one knows what the market is going to do and no one can pick when the bottom of the market is going to be. The best thing to do is to make multiple regular payments. The Fool UK has a good explanation of why this works here.
This is of particular relevance to those who have chosen to take a contributions holiday and pay $1,040 per year in order to receive the matching government 'tax credit' of $1,040.
With the scheme that I am currently on, I had to make an initial $1,000 contribution and so I haven't been able to stagger my payments. However come next year I will be making smaller and more frequent payments.
Saturday, 18 October 2008 07:15
Graham
Wondered why it takes forever to see money appear in your KiwiSaver account?
Well it looks like the IRD are at least acknowledging the problem - see their writeup in the New Zealand Herald here.
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Tuesday, 14 October 2008 21:53
Graham
Why is it that newspaper headlines are so misleading?
The New Zealand Herald has run an article: "Conservative KiwiSaver options deliver best returns".
Ummm. Maybe in the short term after one of the worlds' largest assets bubbles.
But, that is NOT true for the long term. Thankfully later in the article some sense emerges:
"The growth-oriented funds - those which have been hardest hit by recent market declines - remain the KiwiSaver options with the greatest potential for increasing the value of retirement savings," Mr Douglas said.
Last Updated ( Wednesday, 29 October 2008 07:19 )
Wednesday, 08 October 2008 00:00
Graham
National have finally released their policy on KiwiSaver.
The most important news is that the essential components are set to stay:
"National is committed to keeping the KiwiSaver scheme and making it an enduring and affordable scheme for members, employers, and taxpayers."
National have committed to the KiwiSaver 'kick-start' and the 'tax credits'. So KiwiSaver retains its attractiveness. It's clear that both major parties are supportive of KiwiSaver and I think this means we will have enduring support for the KiwiSaver scheme.
The policy proposes some tinkering - the key changes of note are:
- The minimum contribution is decreased from 4% of gross salary to 2%
- The employer tax credit is discontinued. This is the free subsidy the government gives to employers
The net result of this is:
- it will be more attractive for low-income earners to join KiwiSaver
- while employers no longer get their tax credit, this is compensated for the fact that their required contribution to KiwiSaver is lowered from 4% to 2%
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