“KIWIFUND”

[Kiwithrottlejockey]

We had a superannuation fund like this once.

That is until a particular SHORT-SIGHTED political party became the government in 1975 and trashed it.

Just think how wealthy New Zealand would be now if we still had that superannuation fund.

And the political party who trashed that superannuation fund is still just as short-sighted as they were back then.

They think they are “born to rule” and that nothing matters except for them staying in power and indulging in cronyism to the benefit of their mates.


from the HERALD on SUNDAY....

NZ First unveils ‘Kiwifund’ plan to bypass fund managers

By ADAM BENNETT | 2:08PM - Sunday, October 20, 2013


NZ First leader Winston Peters says fund managers have sucked hundreds
of millions in fees from the Kiwisaver scheme. — File photo: Sara Ivey.

NZ FIRST leader Winston Peters wants KiwiSaver to become a government backed savings scheme and says the plan would be a bottom line in any post election coalition talks.

In his keynote address to 170 party faithful in Christchurch this afternoon Mr Peters criticised the KiwiSaver scheme as it stood as "a pot of gold" for private sector fund managers rather than savers.

He claimed those managers had sucked $325 million in fees out of the scheme since it was established five years ago, "and there's worse to come".

Mr Peters said an independent source had forecast manager would take about $22 billion in fees over the next 30 years, which he described as "legalised plunder on a massive scale".

Mr Peters said NZ First wanted to put KiwiSaver "on the same footing as the New Zealand Super Fund which has world class, government commissioned savings fund management".

"We'll call it the KiwiFund."

The fund would be Government guaranteed and because of economies of scale and "the elimination of hordes of ticket clipping fund managers costs will be greatly reduced".

Money from the fund would be used to invest more in New Zealand.

"Kiwis are going to buy back their land and their assets."

The fund would also give financial backing "to the winners who keep coming up with brilliant ideas and products".

"Whatever parties want to form a government in 2014 they will have to work with us to set up KiwiFund", Mr Peters said.

However NZ First would not enter into any pre-election deals with other parties.

Mr Peters also fired broadsides at the lack of transparency and accountability in funding for Whanau Ora and other Government spending on iwi-based initiatives.

He repeated yesterday's criticism of the central government and insurance industry response to the Christchurch earthquakes.

The two day conference ends later this afternoon, having elected party secretary Anne Martin — mother of NZ First MP Tracey Martin — as party president, replacing Kevin Gardener.

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11143171

[nitpicker1]

Winnie 4 PM

[Kiwithrottlejockey]

[Kiwithrottlejockey]

[Kiwithrottlejockey]

Peters' Kiwi Fund idea could be a winner

By DAVE ARMSTRONG - The Dominion Post | 11:15AM - Monday, 28 October 2013

TOUGH I have little time for Winston Peters' pronouncements on refugees and Asian migrants, it's always fun when he announces a highly interventionist economic policy that raises the hackles of the Government and its market- loving mates in the business community.

That's what happened last week when Mr Peters released his Kiwi Fund policy. Apparently we are being ripped off by the fund managers of the private Kiwi Saver schemes who are charging exorbitant fees.

The establishment quickly responded to the policy, giving Mr Peters the verbal bash. The prime minister, insurance and finance experts, and various newspapers united in condemning the Kiwi Fund as "risky", "worst practice", and a "huge problem".

John Key reckons you get "more sense out of the Mad Hatter's Tea Party" than Mr Peters. Given that Mr Key is an expert on mad tea parties — you don't get a madder tea party than his hermetically sealed Earl Grey with John Banks - he should know.

But is Kiwi Fund as bad as the financial experts say? I'm not so sure. As well as having an economy of scale and lower fees, Kiwi Fund would mainly invest in New Zealand enterprises.

This has particularly outraged the highly paid experts in the country's largely foreign-owned financial sector.

Instead of investing in a high-yielding Indonesian sweatshop or an American multinational on-selling garments made in a Bangladeshi fire trap, the money will be invested in New Zealand businesses, including farms and other agricultural enterprises.

Worse, these businesses may have the audacity to pay their employees good wages.

The financial big shots are rightly offended. Doesn't Mr Peters know that returns for the investor on the sorts of companies he is keen on could be lower than companies offshore?

That might be the case but, as difficult as it is for financial boffins to comprehend, money and profits aren't everything. If all we worried about was money, Fair Trade coffee would never sell in our supermarkets because some other brands, which have the nasty habit of using Central American slave labour, are much cheaper. Yet Fair Trade coffee sales are booming.

Though many customers bank with Kiwibank because of lower fees, some do so because they know it is wholly New Zealand- owned. They don't necessarily mind if their returns are a little lower.

It is exactly how much the Government guarantees Kiwi Fund savers that has critics rightly worried. Mr Peters has been light on detail. If he guarantees a good return and the state fund managers invest in turkeys, then the taxpayer will have to bail Kiwi Fund out — see KiwiRail and Solid Energy for further information.

However, if the Government guarantee is a modest one, and the fund does well, then Mr Peters could be onto a vote winner. The great value of a state-run enterprise competing alongside private businesses is that, to quote Jim Anderton, "it keeps the bastards honest".

When Mr Anderton initially floated his Kiwibank idea, the reaction from the business community was predictably hysterical. Apparently the "Albanian-style" bank was going to cost the taxpayer hundreds of millions of dollars. Eventually it was a private company protected by a government guarantee that did that — South Canterbury Finance. The devil of Mr Peters' Kiwi Fund will be in the detail. If it is efficiently run, as the New Zealand Super Fund is, then the taxpayer has little to worry about. If its returns are low, then people will desert it for better private schemes. The important thing is that Kiwi Fund is not subject to enormous risk through overgenerous government guarantees.

But as I watch the free market American economy continue to stagnate while more interventionist Asian economies go from strength to strength, I wonder who is the real Mad Hatter? Perhaps it is Mr Key, with his fizzer of a Meridian sale and his almost religious belief in privatisation. Mr Peters, grinning from ear to ear thanks to the publicity his Kiwi Fund has generated, has looked far more like the Cheshire cat.

But given that both men have still not ruled out doing business with each other next year, New Zealanders may find things between them will get curiouser and curiouser.

http://www.stuff.co.nz/dominion-post/comment/columnists/dave-armstrong/9333559/Peters-Kiwi-Fund-idea-could-be-a-winner