By Alex Tarrant
Prime Minister John Key has announced the government will reduce its annual matching tax credit contributions for KiwiSaver of NZ$1,042 per person, but will continue to offer the NZ$1,000 kickstart contribution for new KiwiSavers.
Key told a BusinessNZ luncheon in Wellington he expected employees and employers to contribute more once the economy had "well and truly recovered."
Key also said the government would "slightly reduce" the amount spent on Working for Families" over time.
Key said Budget 2011 due to be delivered on May 19 would be responsible, measured and affordable.
“Budget 2011 will set a credible path back to surplus while at the same time continuing to protect the most vulnerable New Zealanders, boosting frontline health and education services, and helping to pay for the rebuilding of Christchurch,” Key said.
“It will contain significant savings, but will by no means be a slash and burn Budget. It will be a responsible Budget which helps ensure growth is built on the solid foundation of savings, exports and productive investment.”
Some KiwiSaver fund managers questioned whether the changes would undermine confidence, while others said such moves were the most sensible if the government was to to change the scheme. See more here from Amanada Morrall.
Key said KiwiSaver, Working for Families and interest-free student loans cost almost NZ$5 billion a year.
"These programmes were introduced during a debt and consumption-driven economic bubble, and it is clear that they are unaffordable,” Key said.
“None of the changes we will be making will affect people before the election so New Zealanders will be voting with all the information they need and can make their own choices.”
The Government planned to reduce the amount of money it had to borrow from overseas to put into KiwiSaver, and increase the amount of genuine savings from the private sector.
"The mix of contributions to KiwiSaver accounts will change, with less coming from the Member Tax Credit and more coming from both individuals and employers," Key said.
The NZ$1,000 kick-start for new KiwiSaver members will remain as it was now.
“The changes to KiwiSaver won’t happen immediately, and this will give people and businesses time to adjust,” Key said.
“Increased contributions from people and businesses will happen at a time when the economy will have well and truly recovered, and both wages and employment will be increasing.”
Key said the changes would maintain total contributions into KiwiSaver funds, "which are expected to accumulate rapidly."
Officials had advised that KiwiSaver changes would modestly improve the rate of national savings.
See more here from Bernard Hickey on why these cuts were the wrong type of cuts.
Working for Families changes
Key said Working for Families would also be better targeted at lower-income families, "who have a much greater need for assistance, and a little less generous to families higher up the Working for Families scale."
“We will do this gradually, in a way that minimises the impact on families,” Key said.
The student loan scheme will also be adjusted but will remain interest-free, he said.
“The changes we are making in the Budget will make all of these programmes more affordable and ensure they survive into the future,” Mr Key said.
“Here in New Zealand we have a chance, now the economy is gathering steam again, to build a solid platform for future growth."
'Foreign creditors means savings not real'
Key said the NZ$5 billion borrowed to pay for KiwiSaver and Working for Families was mostly money borrowed from foreign creditors.
Since the Government has a large structural budget deficit, this is NZ$5 billion of money that has to be borrowed from foreign lenders, with around NZ$1 billion a year going to KiwiSaver.
"That does not constitute real savings," Key said.
"That’s because the government has to borrow to raise it, and the debt on one hand simply cancels out the saving on the other. It’s a bit like someone going to Westpac to borrow some money then taking it to ANZ to put in their savings account. It’s easy to see that this is not real savings," he said.
"So at the moment, the government contributions to KiwiSaver make no difference to the level of national savings. They do, however, increase our reliance on overseas lenders, who can at any time decide that our debt has grown too large and that we are just too much of a risk."
"National savings are only increased when the savings are genuine, that is, when they come from people or businesses or government actually reducing their spending," he said.
"Otherwise we are all just kidding ourselves."
'Net savings up 2% of GDP'
Key said total KiwiSaver funds are projected to rise from around NZ$8 billion currently to about NZ$25 billion by 2015, and to almost NZ$60 billion in 10 years.
"The advice we have had from officials, who have modelled the effect of the Budget changes, is that they will result in a modest improvement in the rate of national savings," Key said.
"As a result of the KiwiSaver changes alone, New Zealand’s net international liabilities – the amount the country owes to foreign lenders – will reduce by an estimated two per cent of GDP over the next decade."
Any other changes?
Meanwhile, asked by media after the speech whether the Member Tax Credit cuts, and increased contributions from employees and employers were the only changes the government would make to KiwiSaver, Key said: “You’ll have to wait and see next week, but they certainly are the substantial changes.”
Asked if he could rule out changing the Housing New Zealand first home deposit subsidy, Key replied: “Yes, I don’t think that changes from memory.”
'Now to see if it's sustainable for the private sector'
Business NZ chief executive Phil O’Reilly welcomed the Prime Minister’s comment that any rise in employer contributions would take place over time as the economy grew.
“Right now if you said that to business [that they would have to increase contributions immediately], they’d be talking about issues of affordability,” O’Reilly told media after the speech.
“We’ve always been concerned about the affordability of KiwiSaver from a government perspective. It did seem unaffordable to us, and it did seem like we were subsidising a particular form of saving when other forms of saving might be most relevant," he said.
"So from our perspective, any move to make it more affordable [for government] is a good thing. What’s more, employers, in principal, are generally supportive of KiwiSaver, so we’ll just need to see whether or not it’s sustainable from a privates sector position now, as it certainly wasn’t sustainable from a public sector position.”
(Updated with Business NZ CEO Phil O'Reilly comments, comments from Key post-speech, more details from speech, links to Amanda's reaction article and Bernard's opinion piece)
89 Comments
It was a small punt.
I have put in a couple of grand and the account has about five grand in it as a result.
Peanuts...
I feel sorry for the people who are working and are putting in 8% of their salary. They wont get the govt top up and the employer contribution is now only 2%.
The whole scheme hasn't lasted very long and has been a big joke.
If you had the choice between an investment that was likely to return 1%pa after tax, fees, inflation; and an investment that lost 1%pa after tax, fees, inflation; why would you ever pick the one that lost value? You have some choice here; if you're worried about your existing investment losing value, switch to a fund that is unlikely to lose value!
If you were investing only on the basis that the tax credits would turn a loss into a gain, and you expected those tax credits to remained unchanged over the lifetime of the investment (I don't know your situation, but for me that's 30+ years), then I think you are being a bit naive.
I'm with you We Are Stuffed.
Similarly I opened the account for the 'free money' gov't saw fit to give away and kept my contributions to the minimum in order to qualify for the 'free money'.
First they reduced the mandatory employer contribution down to 2% max - now the gov't contributions are down. Like you I feel sorry for those that took the bait on higher rates of contribution from their salaries.
Kate, your behaviour is totally rational - and also illustrates precisely why KS subsidies are such poor value for money. In the case of people behaving like you, the public expenditure has delivered no public benefit at all.
I don;t think you need feel too sorry for those contributing more. They may well have made less in returns than they would have if they had saved the rational minimum in KiwiSaver and the rest somewhere else. But they have more in savings than they would have if they had not saved anything at all, and very probably more than if they had made the same input into an alternative savings vehicle; and at minimal effort.
Anyway, as far as I can make out from what the PM has said, they do have the option to stop or contribute less if they don;t like the new terms so much.
Well yes they have the option but they also have more 'at risk and unavailable for reinvestment' cost.
We've actually been here long before with a "locked in" managed fund retirement plan. Stopped contributing to that decades ago given the poor returns.
Actually, for us Bonus Bonds have way outperformed every fund we've ever been involved in in the long term. None of your investment capital is put at risk, you aren't taxed on gains, and you can have your dosh any time you like. When interest rates are low with the trading banks - we move into BBs - and vice versa, when high back into TDs.
That sounds like good common sense Kate. Imagine if the majority of the population were as responsible, disciplined and intelligent. We wouldn't be where we are now. We wouldn't have a poor savings history, we wouldn't have massive debt and maybe the sheeple would've actually seen Labour's handouts for what they were.
We made all the classic mistakes when younger as well - believe me! :-)
What I can't understand is the percentage of grey haired folks in the audience for the Bluechip and other failed finance company meetings. You'd think by that stage they'd have seen it all before.
We Are Stuffed and Kate,
Hubby and I did exactly the same thing. Now we'll wait and see how much they cut the tax credit by. If it's worth staying in, we'll keep contributing the minimum to get it. If it isn't, I've been looking at places to put my banked savings now that the car is paid off and the mortgage is getting smaller.
I've been looking up TD rates at various banks, I hadn't heard of bonus bonds, I'm going to look that up.
This constant tinkering by the gov. has made me completely leery of Kiwisaver. Be interesting to see when and how much they expect the employer to kick in in the future. Could be a looong wait.
Be a bit careful how much you put into Bonus Bonds. They used to be administered by the Post Office Savings Bank and have a NZ Govt guarantee but they were sold to ANZ.
Now they are not guaranteed by anyone.
A very low return for their risk.
Buy some gold sovereigns on trademe instead:)
Come on. It's not really.
Surely a grand that the govt borrows for you off shore each year is not going to stop you saving.
It was worth getting into while it lasted but really it was a big joke.
Dont forget to send your final $1040 cheque in next month though so you can get some of the 380 million the govt borrows for you each week.
Yea right what planet are you on? Your money in the bank is becoming worthless to much credit and crap interest rates way behind the real inflation curve tell me this...
...lol ya know your going broke when your nikel cadmium coins are worth more as scap than the face value of the coin, its called debasing the currency...to be replaced with coins that go rusty...lol...
Buy GOLD forget the banking ponzi scam...gold and silver dont rust away!
Absolute rot....
Lets not bother with real data eh what? just I feel like Im losing to inflation so I must be.....its insane to bet your savings on something so vague IMHO....
Your "Real" inflation is CPI? this isnt real long term inflation.....if you want to start gambling based on something as volitile as CPI good luck....
The great thing about bank deposits are they are about as close to a risk free rate of return as you can get....sure they pay only 4.4%....but the risk of loss of your capital is negligable....so some simple stuff, core inflation ie a long term trend when you take out volitiltiy is about 2%....so after tax you are making maybe 1 to 1.5% net per annum RISK FREE....
Anything else has a risk which you need to qualify and put a cost on....
Gold and silver are volitile....look at their history, sure buying when cheap and selling now would have made you a lot of money....but the reverse is just as true....and the same applies to housing or indeed anything else.
You also assume inflation and indeed high or hyper-inflation, when in fact, stagflation or even more likely deflation are on the cards right now....and in a deflationary environment cash has two things going for it, 1) its worth more everyday....2) it has an opportunity value in that you can use it to buy assets at any time.....and in a depression we are talking fire sale prices.
When you look around for a historical context you come across the Great Depression which was a credit/debt driven event like no other....so the best model you can use is the GD and its effects and consquences....and use it today to look at the GFC......if you accept that model then the thing that stands out is all the metrics from the GFC so far are significantly larger then then. If that model holds true then we are in for 60~90% losses in sectors such as housing, and even precious metals will drop....and when you factor in fear and greed to the gold bubble I have to wonder just where it will drop to.
There is no guarantee the deflationists (such as I) are right of course and we are in fact looking into the maw of the "Great Austerity", but adults make their own mind up....hopefully rationally.
regards
CPI Steven as with all the numbers is bougus, made up, I dont care if a ipod is cheaper than last year, its the things I need to live that count like food and power a roof.
So for starters your assumptions are based on mickey mouse reports.
Its all about purchasing power! my dollars buy less than last year.
Tell me Steven which things I need or have to have to live life have dropped in price ?
Food? Power? Cost of housing? Rates? Insurance?
I can not eat a Lcd tv from harvey moron at no deposit down and 5 years to pay!
I could write a diatribe about gold but can not be bothered!
The GFC an engineered event with an agenda. Which of those conmen have gone to jail?
None of them! They get fat bonus's...
Cue Bono?
According to the survey on Stuff http://www.stuff.co.nz/business/budget-2011/4986635/Nats-bet-on-support-for-KiwiSaver-cuts 50% of people are planning to change the way they vote because of this & the sales of stakes in state asset (and I'm guessing not in a favourable way for the Nats). Might be an interesting election.
What I find strange is we are (or will be) in dire straights, yet the Govn is punished for trying to bring its house into order with these tinkerings..... I just wish Pollies had the balls to say we have to do some serious work like raise taxes etc....instead they do it behind ppls back and since ppl dont notice they dont care.....shallow fools...
regards
Yep. I think the main issue people will have with the changes is that those different rules would probably have affected their decision to join or not to join KS in the first place. But once one has joined I am not sure there is a way out of KS?
As self-employed we can contribute what we want but I'm not sure if employees can get out altogether (for good, not for a 3-year holiday).
Yes, easy ish I think.....basically you go in for a year with the minimum 2% or whatever it takes to see $1k in there at year end, take the Govn's $1k and put it on holiday.....The problem is im not sure if its permanent....so what Im looking at is pay in for a year and then put it on hold for ever and join the company scheme which now with the changes pays better....but that may simply be too complex....or workable...
AS self-employed though I think its easier for you....also if you put in $1k per child I assume they then get another $1k each.....then you put those on hold as well....you need to talk to someone who knows the ins and outs....
regards
I was thinking of voting Libertarian this time if they have a candidate in my electorate. Looks like quite interesting party since they take a Austrian economics free market point of view, small goverment etc.
Im in my mid 30's and figured that by the time I get to retirement age the pension etc will not be avail for me. I consoled myself somewhat that despite the paying taxes for a pension fund I will almost certainly be deprived of later in life I am getting something in the form of the tax credit on my kiwisaver.
Not getting the credit is a bit of salt in the wound now...
Isn't the fact that your saving enough of an incentive to continue saving? Why can't you save your own money without a govt handout? So those who were bribed by Labour are now voting against National because they took the bribes away?
Further proof that NZ has developed into a welfare state - everyone whinges when their benefits are being cut. Look at the bigger picture people - the country is broke.
I don't think that's a fair comment actually. There are obligations with KS that do not exist if you invest yourself, eg in shares, property etc. If something you have invested in doesn't perform, you can get out and move your dosh somewhere else. Not so with KS.
If people are locked into a scheme they joined partly because the risk of a possible low return was mitigated by the govt/employer's contributions and then those contributions are decreased/removed (making the return on investment potentially pathetic or negative), the least I'd expect is the right to leave the scheme to invest elsewhere. I am not sure this is an option at all and I think that's the main issue here, not saving or not saving.
Leaving the country permanently is a little extreme for me :) Yes, I realise you can switch providers but it is not the same freedom as one would have with another investment where you can take your money out at anytime and invest into something totally different.
Basically what I am trying to say is so long as the govt is involved in KS (ie giving handouts!), it makes sense that they have the right to set rules limiting what people can do (ie no access to the money except in some circumstances etc). But if they remove or decrease their involvement then I reckon people should regain full control over what they can do with their investment (without having to go into exile to do so!)
You do have the right to stop contributing and invest elsewhere instead. Go on a contributions holiday and thereby stop requiring the taxpayer to subsidise your private savings.
You don't have the right to withdraw the contributions you have already made, but why should you? The terms as regards the contributions you have already made have not changed. You got the Government contribution, it's in your KS account and it's not being taken away.
But nobody's complaining about not being able to get their money out. They're only complaining about not getting anymore handouts. Nobody entered into kiwisaver because it made good sense to save for the future - they only entered because they were bribed with handouts.
You are correct in that we should have the right to leave the scheme and invest elsewhere though, unfortunately the govt knew that if you weren't already responsible enough to save your own money you couldn't be trusted to remain disciplined enough to keep saving and not spend it.
I don't think you've done the numbers on this.
Taking GMK as an example, the fees are 1% pa with a minimum of $50. For a $2000 investment, you need a return of 2.50% pa after tax and inflation to break even. For a $5000 or larger investment, you need 1% pa. That should not be difficult to achieve over a long investment timeframe.
Don't say you actually believe your provider is going to make some kind of return after tax, inflation and fees?? Mine hasn't made me a cent yet, in fact they have lost money even though they claim otherwise to the public. And I have quite a bit more than 2K invested... I think you have been caught up in their lies - or you are one of them?
My Kiwisaver account has returned around 4%pa net since I started contributing about a year ago. (That's the actual return for my account, not a scheme average). So it's been approximately breaking even with inflation in the short term. Ask me again in 10 years how the long term performance is ;-)
I think you either need to wait for more than 2 years, or find a better fund.
4.6% and half of it is a one off due to GST.....get real wolly.....core inflation is 2% and steady.
Ive said it before and I'll say it again for the ones who wont listen.....a deposit account is a risk free rate of return...
Shares are a dead cat bounce and are being bought with cheap credit...in effect the Fed is doing a ponzi scheme....take into consideation the fraud by the likes of GS and the share market is a disaster waiting to happen....play at your own risk.
"Fund parasites", yes indeed....mediocre returns for little effort, unknown risk to your capital, no flexibility (to sell and buy as you chose) and no responsibility....
regards
I'm sorry Steven, I don't get this GST is a one off and core inflation is only 2% and steady.
The GST is a permanent increase and flows through the whole supply chain until it ends up with the final consumer. Core inflation is meaningless along with most of the other measurements the pollies and RBNZ use. So what if non essential items are deflating (ie tv's etc), the fact is CPI is 4.5% and probably triple that if we were just looking at a households weekly/monthly purchase of essentials.
John Key should have made this change, and others, in 2008 after getting elected. Now the debt of NZ is ballooning, interest will need to be paid on that huge debt as well as capital repayment. And he has shot himself in the foot politically be leaving it to election year. And he is only tinkering around the edges. Personally I've lost faith in John Key. I think his running of the economy has been incomptent.
Typical KeySpeak again, without telling clearly what is the cut and when it will be effective.
Are they going to reduce the matching contribution from $20 per week as is now, to any thing less or doing it away completely ?
If they are cutting it, what will they contribute ?
I think Key will wait for the reaction before the election and decide on this...he wants to gauge what will be the effect on his re-election.
Right now it is just a threat....
Is JK looking at the right country or is he talking about Australia when he says..
“Increased contributions from people and businesses will happen at a time when the economy will have well and truly recovered, and both wages and employment will be increasing.”
better tell my employer national think they should be paying everyone more so we can boost our Kiwisavers...
The $1,000 kick start and up to $1,024 per year were labour party ideas to encourage kiwis to save due to the fact kiwis are very bad at saving. Great idea but the problem is the government can't afford the free cash and the poor who really need to save have not elected into kiwisaver and are missing out on the free cash. The best move right from the start was to make kiwiSaver compulsory with contributions from employee and employer and no free cash from the government. There is a great selection of funds to invest in (over 100 funds) from low risk, index funds, high growth funds and Craigs are even offering a fund that you can select your own investments including individual shares. Don't moan about low returns as many of the funds have performed well over a 3 year period during bad global econmic times. Do your homework and select the right fund for you. The best thing all of us can do is save for our retirement and because as a nation we are spenders and not savers the best solution is some form of compulsory saving. Only if we had a government with enough balls to implement.
I don't think it would be legal for me to do so, since I'm not a registered financial adviser. But the Morningstar quarterly report gives plenty of informative statistics to provide a basis for comparison and identification of the ones that are doing better. Remember that past performance is not a guarantee to future performance - but then that's the same for all investments, and all managed funds, not specific to KiwiSaver.
Again, if you think you can get better returns on your money by investing in something else other than KiwiSaver, nobody is stopping you from doing that. In fact, if you think KS is such a bad deal then you should be applauding the Government's decision to reduce the amount of public money that it's putting into it.
Little Johnny does it again, my woolly ones.
Ever so logically adjusts a bit of help that means more to those of us less well padded.
Love the Westpac / ANZ lend borrow analogy: just the common man touch the smiling one loves to employ.
Here you go then, Wee John. Why not withdraw the $16.7 bill on deposit with the NZ Super Fund (aka the Cullen Fund...chokes) paying a tad over treasury bills and not have to borrow so much at bond rates ?
And at a 3% differential, that saves $480 mill a year in funding drag.
And you withdraw the snouts from the trough that is costing nearly $100 mill a year to keep full.
Oh, I see, that would be hurting "people like you".......wolves who like a good pinot and at least 2 overseas rests a year.
Sighs. Why is there no politican with the cojones to stick the teeth in ?
What, O woolly ones, have we done to deserve this ?
I used to be John Key's greatest fan but crikey, his star is losing its lustre, rapidly.
If I was him, I would let kiwisaver as it was and instead, use these planks to revive this alarmingly poor country:
1. Raise the pension age to 66: one year won't kill anybody and besides, 65 is just too young. I will be turning 65 shortly and I would be one of those affected but it is simply nonsense in a third world country to pay a pension at 65.
2. Restrict the DPB to unemployed parents of only two children: the poor should not be allowed to use children as cash cows...we all know they ultimately breed inadequate citizens.
3. Dismantle trusts which are used to avoid tax and rest home charges: it is ridiculous that New Zealand is the most trust-bound nation in the whole world and that the tax-paying middle classes support the wealthy.
4. Student loans - retrieve loans from overseas debtors: most of them are earning significant salaries and should be paying their debt. Charge interest on NZ-resident debtors four years after they were incurred.
I used to quite like Key too, not anymore. He's a bullshitter
Have a read of this about Key's spin on our "100% pure" crap:
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10724868
Matt - he may well be:
http://thestandard.org.nz/cunliffe-addresses-key-lies/
http://blog.labour.org.nz/index.php/2011/05/12/budget-faqs-2/
Useful comment from last link:
"Of particular interest to me is Mary Holm’s suggestion that the kiwisaver reductions are most likely to be in the region of $500m per year. This government is borrowing $380m per WEEK. Of course cutting cost helps but yesterday it appeared to being sold as a BIG contributor to paying down debt. That’s nonsense. Now, maybe reversing the tax cuts made by this government might increase revenue to enable debt paydown.
I also heard an expert state the other day (don’t know if true or not) that the Asset sales intended by the Govt will be used to invest in different capital not to pay down debt.
So, again, as the current govt, with current ability to implement, what is the plan???"
Plan, wot plan?
We still have to wait and see what he cut actually is - say he cuts it 50% to 520 a year its still a great return along with an employer contribution of 2% - you could still be getting 100% return on a $1040 annual investment before compounding -- maybe the regulars here can tell me a better way to invest $1000 a year over a long period for retirement? not going to buy you too much in terms of property - bonds at 6% ? .... lottery tickets anyone?
If you apply a bit of neuro science here - people might get upset and jump and scream because there current return on a 2% salary investment of 1020 per annum was 200% and gets cut to 100% .... whilst missing the point that a 100% return in your first year of investment before any other possible gains and losses (note not every year) of each dollar is as good as it gets!
If nothing else, those of us who have been in since day one have seen a great actual return on the money we have invested - i have put in 7k since it inception and the fund is just over 20K at March11 - not the worst return inthe world over the last few years in this economic climate!
if all the support went tomorrow - it can sit for the next 20+ yrs and i will take the 100K+ on retirement - not sure even $30 fees and inflation will erode my 8k purchasing power by then.
As for it deterring savers if all the subsidies go - then yes many savvy investors will look for other means - but there will be plenty of people who do nothing as its easiest and plenty more who knee jerk exit the scheme without considering the alternatives.
The next question is what will people do with the contributions instead - spend and kickstart? well the savvy will just switch to paying off debt in my opinion just as they are doing with all the cash they can spare at the moment - which is probably the best return you can get at the moment!
cheers
Govt spending should be heavily reduced to funding only the absolutely necessary public needs. No handouts to lazy and cheaters. Taxes should be reduced too. Personal responsibility and productivity should be promoted and encouraged as much as possible. THEN the ecomony will recover, living standards will increase and housing will become "affordable".
not sure Matt - was not announced and not heard anything yet - it sounded like the kickstart will stay in its entirety but there will be a cut to the $20 weekly match - did not specify how much - it could be totally?
I think its a classic casse of JK governing by popular opinion - he has drip fed the idea of cutting WFF / Kiwi saver / Student loans over the last couple of weeks and judged what public response is - having seen that he wont be lynched in the polls he has firmed up the cuts and then announced they will happen but not the total details - now he will sit back and wait to see what the response is before deciding how much and how quickly these will happen.
If there had been a huge outcry against cutting Kiwisaver in the last week - i'd have put money on him telling us that its vital for the long term to encourage people to save for their futures and retirment and so the short term pain is worth it - and cut harder elsewhere!
Dont forget he still has to satisfy the ratings agencies to avoid borrowing costs going up - but if he phases stuff in over 5 years he should be able to keep them happy without taking all the plums away at teh same time
we will find out next week
"In the light of the spiralling debt, trimming the middle class welfare (Kiwisaver bribes, WFF student loans) is a sensible option."
Perhaps the spiralling debt is just a symptom of foolish policy, like tax cuts for the rich. I don't get WFF, but take it away and you're going to destroy much of the middleclass, who unlike the rich, are paying all the tax.
Would we ecen need to be slashing KS, WFF, etc, etc, etc ,etc were it not for those bloody tax cuts. John Key has just repeated the mistakes of G.W. Bush in his pursuit of turning NZ in to a "celtic tiger".
In the last week I signed up for an Australian job website. Get out why you can is my advise, before JK channels 99% of the wealth in NZ to his own kind.
The spiralling debt is a result of policies that encourage handout bludging instead of personal responsibility on many levels - from those who are, but should not be, on the dole to those who are in Govt "jobs". Cut Govt funding to what is absolutely necessary, then cut taxes accordingly and encourage personal responsibility and productivity. THEN incomes will rise, living standards improve and housing becomes "affordable"...
John Key and his drive for more savings in New Zealand :-) ... we are most amused ...
Banana republic stuff, really. Cant learn from troubles, but are rather asking for more by inviting people to go more into debt and spend the money on lattes, China made junk and crappy houses that are already ridiculously overpriced.
New Zealand will only change its banana republic ways once it hits the wall. Just by observing what is going on elsewhere and trying to prevent similar meltdown ... nah, mate, not around here ...
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