Our PM Jacinda Ardern (and the government)

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Networkn
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#2961542 31-Aug-2022 14:00

GV27:

Holy cow. I was not expecting that.

They got caught with their hands in the till and they bailed the next day.

It's just another example of a poorly thought out plan. You'd think of a plan to increase taxation by $21B they might have done some public consultation.

marmel

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#2961545 31-Aug-2022 14:06

networkn:
GV27:

Holy cow. I was not expecting that.

They got caught with their hands in the till and they bailed the next day.

It's just another example of a poorly thought out plan. You'd think of a plan to increase taxation by $21B they might have done some public consultation.

Regardless of one’s political persuasion everyone should be concerned by this. It shows a government making poorly thought out policy decisions and then canning them immediately once a public outcry occurs. These people should not be running a corner dairy let alone a country. The cycle bridge saga was bad enough but this is farcical.

Rikkitic

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#2961547 31-Aug-2022 14:09

networkn:

And it's dead! ROFL. Even the second bridge that was nonsense lasted longer than that! What a circus!

Wow. That was a quick turnaround. Maybe someone should have asked what people thought about this before pushing it out.

Plesse igmore amd axxept applogies in adbance fir anu typos

GV27

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#2961548 31-Aug-2022 14:09

The credibility of KS as a scheme just took a massive hit too.

You'd be a mug to keep contributing into it after this.

Clearly it's a means to an end, and not a whole bunch more - and seen as a plaything by people who clearly don't understand how compounding returns work.

invisibleman18

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#2961549 31-Aug-2022 14:11

Wasn't expecting that. To announce something and have to cancel it in under 24 hours is pretty funny. How did they think people would react to it?

networkn

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#2961550 31-Aug-2022 14:14

Rikkitic:

Wow. That was a quick turnaround. Maybe someone should have asked what people thought about this before pushing it out.

Totally, how could you even conceive of a change that for some people would have affected their KS balance by 20K by the time they were 65 and not have had a full on discussion about? Christopher Robin, National had a referendum over a flag, you'd think something that affects this many people might have involved at least a couple of focus groups! :)

networkn

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#2961551 31-Aug-2022 14:14

GV27:

The credibility of KS as a scheme just took a massive hit too.

You'd be a mug to keep contributing into it after this.

Clearly it's a means to an end, and not a whole bunch more - and seen as a plaything by people who clearly don't understand how compounding returns work.

Not sure what you mean by this?

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Kyanar

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#2961555 31-Aug-2022 14:20

networkn:

Not sure what you mean by this?

I presume it's a reference to how the government can tweak the rules at any time to effectively "take" your KiwiSaver. I don't agree, but I suspect that's what they mean.

Personally the only problem with KiwiSaver I have is that it's impossible to port if you're entering the superannuation system on the other side of the Tasman because only two funds actually accept transfers.

GV27

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#2961556 31-Aug-2022 14:22

networkn:

Not sure what you mean by this?

As your post alludes.

$20K will be material to most in retirement. Having a government make changes on a whim (posing as remedial matters) that could have that kind of effect on KS as an investment vastly undermines the integrity of it.

If you pay into a managed fund, you still have control of the funds. If you pay into Kiwisaver, you can move it from provider to provider, but outside of hardship, it's still in the net and subject to the changes in legislation that may well have a material effect on how effective it as an investment.

networkn

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#2961559 31-Aug-2022 14:29

GV27:

As your post alludes.

$20K will be material to most in retirement. Having a government make changes on a whim (posing as remedial matters) that could have that kind of effect on KS as an investment vastly undermines the integrity of it.

If you pay into a managed fund, you still have control of the funds. If you pay into Kiwisaver, you can move it from provider to provider, but outside of hardship, it's still in the net and subject to the changes in legislation that may well have a material effect on how effective it as an investment.

Well, the rules wouldn't apply to any existing fees paid, only those moving forward, but yes I understand the point you are making.

The scuttlebutt is that what they proposed would not have stood up to a legal challenge and that is unlawful fundamentally.

It's all so dumb.

GV27

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#2961565 31-Aug-2022 14:37

networkn:

It's all so dumb.

Correct; despite all the working group recommendations, the philosophical issue of taxing upon entry vs. exit and the underlying issues with meddling with the scheme from an integrity POV, they still looked at it and said "This is the most pressing problem with Kiwisaver we need to address in our work program".

floydbloke

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#2961573 31-Aug-2022 15:09

I'm about to send David Parker a packet of serviettes so he and his cronies can wipe the egg of their faces.

https://www.stuff.co.nz/national/politics/129739479/government-abandons-controversial-kiwisaver-service-fees-gst-tax-grab

Did Eric Clapton really think she looked wonderful...or was it after the 15th outfit she tried on and he just wanted to get to the party and get a drink?

sen8or

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#2961583 31-Aug-2022 15:22

GV27:

The credibility of KS as a scheme just took a massive hit too.

You'd be a mug to keep contributing into it after this.

Clearly it's a means to an end, and not a whole bunch more - and seen as a plaything by people who clearly don't understand how compounding returns work.

I think that would be cutting off your nose to spite your face.

Don't forget -

For every $1 you put in, your employer also puts in $1 (less tax up to 3% of earnings). In addition, at $1040 annual, the Govt also contribute $ 520 as a lump sum, so your $1040 has roughly doubled in a year before any actual investment returns are included too. Only real estate has offered returns even near that level (and not now).

Even though this would have seen an increase in expenses against people's Kiwisaver (and I'm pleased that this has been snuffed out immediately), Kiwisaver still represents very good returns based on your own input. Investment returns have nose dived of late, but like most investments, the long term game is the best strategy,

GV27

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#2961590 31-Aug-2022 15:56

sen8or:

For every $1 you put in, your employer also puts in $1 (less tax up to 3% of earnings). In addition, at $1040 annual, the Govt also contribute $ 520 as a lump sum, so your $1040 has roughly doubled in a year before any actual investment returns are included too. Only real estate has offered returns even near that level (and not now).

Now you're getting into the whole philosophical argument of who is actually paying that 3% anyway - yes the employer passes it on, but it's 3% of the payroll not available to you as earnings. That's something you could negotiate with your employer if you were so inclined.

You can still get the lump sum credit with a one-off payment, there's no requirement to do that regularly. Just dump in the $1,040 at some point before the end of the Govt fiscal year.

Where you get caught-out going off-piste with KS is the FHB withdrawals which require regular contributions for a certain period of time.

And there's the ongoing opportunity cost of KS contributions being locked until you're 65, which (the further away you are from retirement, anyway, the more it) functions like a payroll tax. If you have the time or inclination to manage your own investments, not having them locked up for a decade and for the accumulated benefits to be at the political whims of treasurers looking for an easy way to bank a return to surplus may have some value to you as well.

networkn

Networkn
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#2961664 31-Aug-2022 16:42

David Parker:

"During extensive consultation views were mixed on the merits of the technical change. The large companies profiting from the current set-up were opposed to the change, while smaller providers were more supportive of the change. This was because these providers who did charge the full GST on their service fees faced unfair competition from the bigger players.

Mr Parker, please let us know, who you 'extensively' consulted with? The public was vehemently opposed to it, you've admitted that smaller providers were opposed, and the large companies were opposed. Those are the 3 most affected groups. Did you 'extensively' consult with yourself and the two others in the room when the idea came up on revenue gathering?

Good grief.

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