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David Seymour: Act leader proposes $30m scheme to teach kids investing · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks'd be follow
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  Speaker 2: As Leader and Deputy Prime Minister David Seymour is floating
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  Speaker 2: a new idea to boost financial literacy among young kiwis.
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  Speaker 2: So that is giving every year eleven student five hundred
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  Speaker 2: dollars to invest. As you can imagine, there are some
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  Speaker 2: strings attached to that. So to discuss further, we are
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  Speaker 2: joined by the Deputy Prime Minister David Seymour. Minister afternoon
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  Speaker 2: to you, Hey a you good afternoon.
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  Speaker 3: Tell us about your plan.
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  Speaker 4: Well, we're definitely not just going to give them five
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  Speaker 4: hundred bucks cash, but we might let them keep any
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  Speaker 4: profit they make at the end of the year. What
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  Speaker 4: the government would have to do as partner with a
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  Speaker 4: company like Chasa's or Hatch or black Ball. There's a
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  Speaker 4: few different companies that offer this kind of investment platform
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  Speaker 4: and they would have five hundred dollars. It's real money
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  Speaker 4: in term one they can invest and say some low
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  Speaker 4: risk like a term deposit, learn about the benefits of saving,
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  Speaker 4: and the idea that if you give it to a
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  Speaker 4: bank and someone else uses it and makes a profit,
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  Speaker 4: then you effectively get some of that bank in an
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  Speaker 4: indirect way. In the second term, if they're passed a
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  Speaker 4: few tests and showing their financial literacy is increasing, you say, look,
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  Speaker 4: you can put it into a managed fund and a
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  Speaker 4: little bit like key we savor. There's you know, there's aggressive,
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  Speaker 4: there's conservative, there's growth, there's different options that invest in
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  Speaker 4: different types of stocks, and you can learn about that.
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  Speaker 4: And then maybe in three you say, look you can
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  Speaker 4: actually invest in actual companies and you can invest in
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  Speaker 4: the New Zealand and start asking yourself, if your flights
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  Speaker 4: aren't on time, maybe people won't fly with you and
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  Speaker 4: you won't make so much money. Or if jet fuel
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  Speaker 4: goes up, that might have heard as well. So you
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  Speaker 4: start getting a sense of why some companies go up
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  Speaker 4: and some go down. And I just think, especially for
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  Speaker 4: poor children from poorer household, if you don't have someone
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  Speaker 4: in your household who knows how to invest and booked
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  Speaker 4: about the stuff, how would you learn. And yet I
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  Speaker 4: would like to see a society where everybody can have
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  Speaker 4: an ownership and a stake. I think this could be
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  Speaker 4: one of the most powerful things we can do using
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  Speaker 4: real money to get kids interested, to bring about that
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  Speaker 4: kind of change. Plus, we need more productive investment other
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  Speaker 4: than housing if we want New Zealand to be wealthier,
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  Speaker 4: and that requires cultural change.
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  Speaker 3: How dumb my young Kiwi's in New Zealand is around finance, David.
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  Speaker 4: Well, you know, I've seen a few people who have
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  Speaker 4: commented on Facebook and the like since I floated this
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  Speaker 4: idea last night, and they've said it's all just gambling
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  Speaker 4: and why would you encourage them to do this? A
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  Speaker 4: lot of the comments I've seen have actually really emboldened
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  Speaker 4: me and confirmed that we do need to talk about
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  Speaker 4: why investment is not gambling. There's certainly an element of risk,
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  Speaker 4: but you actually affect lending someone your saving so that
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  Speaker 4: they can try and make money by investing in plant
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  Speaker 4: and equipment, produce their products and pay their workers more.
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  Speaker 4: And there's actually a virtuous circle up there. But I
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  Speaker 4: think our culture is so anti business, it's anti entrepreneurship.
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  Speaker 4: We teach people to work hard, and I fully agree
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  Speaker 4: with that, but hard work only produces and if we
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  Speaker 4: also have investment capital, and I don't think that side
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  Speaker 4: of the equation has been taught in our education system.
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  Speaker 4: I don't think it's part of our culture, and I
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  Speaker 4: think that's made a support which has manifested itself as
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  Speaker 4: a cost of living crisis because really, yes, prices are up,
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  Speaker 4: but the real problem, I would argue is that our
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  Speaker 4: wages are falling behind the rest of the world. That's
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  Speaker 4: why we feel that there's a cost of living crisis.
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  Speaker 3: To go back to the gambling thing, there's a lesson
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  Speaker 3: in that as well, because when I bought my kids,
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  Speaker 3: you know, gave my kids some money to invest in stocks,
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  Speaker 3: one of them was an idiot and sped them, you know,
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  Speaker 3: on stuff that he was into, and the other one
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  Speaker 3: thought about it. But there was a pretty heavy lesson there.
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  Speaker 3: If you just see it blow up and disappear, then
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  Speaker 3: then then that's a lesson as well, isn't it.
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  Speaker 4: Yeah, look what I think, what I think should happen
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  Speaker 4: if we you know, we're just floating this idea. It's
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  Speaker 4: not even a absolute policy yet, but is that some
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  Speaker 4: some kids will just, through no fold of their own,
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  Speaker 4: lose it. And it's a shame. But look, at the
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  Speaker 4: end of the day, it's a it's a very small
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  Speaker 4: amount of bunny. It's I sent what the government is
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  Speaker 4: running and key we save the subsidies every year anyway,
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  Speaker 4: but on the other hand, if they do well, then
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  Speaker 4: we'll we'll take the fight the original five hundred principle,
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  Speaker 4: put that probably into their key, we save it to
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  Speaker 4: kickstart that, and then we'd take the take any extra
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  Speaker 4: they make that if they want to, they can take
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  Speaker 4: the cash out for the holidays, and I think I
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  Speaker 4: think that could motivate it. But they might also say, look,
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  Speaker 4: I'm enjoying this, I'm going to keep investing it. So
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  Speaker 4: partly about that, and it's also about parents. They'll be
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  Speaker 4: parents who won't have had this opportunity, but they'll get
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  Speaker 4: interested in what the kids are doing. And it'll be
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  Speaker 4: particularly households that haven't had a history of doing this
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  Speaker 4: that for whatever reason no fold of their own, but
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  Speaker 4: they won't have been introduced to it before. We should
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  Speaker 4: make everybody interested in both sides of the economy that's
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  Speaker 4: working and investing.
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  Speaker 2: So you've kind of you've thought about the costing obviously, David,
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  Speaker 2: it's around about thirty million dollars if there's six hundred
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  Speaker 2: thousand students, So where would that come from? Do you think?
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  Speaker 4: Well, at the moment, every year, we take about six
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  Speaker 4: hundred million dollars and we put it into people's key.
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  Speaker 4: We say, if you make a contribution through work, the
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  Speaker 4: government will give you the top up of about five
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  Speaker 4: hundred dollars. And I haven't dol maths down to the
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  Speaker 4: last cent, but in round Vegas, five percent of five
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  Speaker 4: hundreds about twenty five dollars, so you might four to
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  Speaker 4: seven five instead of five hundred. The other twenty five
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  Speaker 4: dollars go into into the key, into the kids investor
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  Speaker 4: kids scant and without front of all of this on
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  Speaker 4: the radio, there's about twenty times more key we Saber
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  Speaker 4: members than there are children per year of school. So
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  Speaker 4: you put that all together and basically everyone gets twenty
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  Speaker 4: five bucks less, but everyone also gets five hundred when
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  Speaker 4: they're a fifth former or year eleven.
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  Speaker 3: This probably comes from the probably unanswerable questions file. But
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  Speaker 3: there's a lot going on in the world. Things are
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  Speaker 3: changing fast. AI is changing the stock market. Will the
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  Speaker 3: markets exist as they are by the time these kids
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  Speaker 3: get old.
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  Speaker 4: I think it'll be a lot of things right, Like
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  Speaker 4: if you learn how to write a letter when you're
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  Speaker 4: at school, you're probably better prepared to write an email,
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  Speaker 4: and you're probably in a bet a place when it
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  Speaker 4: comes to typing questions and claw GPP these days. So
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  Speaker 4: some things are kind of fundamental. You know, writing a question,
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  Speaker 4: writing a letter, communicating an idea. You know, the technologies
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  Speaker 4: to change, but the concept hasn't putting some money aside
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  Speaker 4: and then effectively giving it to someone else who has
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  Speaker 4: a use for it so they can make more money
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  Speaker 4: and pay some back to you. I mean that is
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  Speaker 4: going to exist in some form, So we can just
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  Speaker 4: get that concept across, then I think we'll be much
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  Speaker 4: much more resilient and prosperous society than if large amounts
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  Speaker 4: of people don't have that knowledge. And unfortunately, if you
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  Speaker 4: look at how many New Zealanders actually invest in companies
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  Speaker 4: compared with say Americans, we're just not there.
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  Speaker 3: What would you suggest kids put their money in. I'd
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  Speaker 3: put mine in Blockbuster Video, BlackBerry and Scotte.
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  Speaker 2: Sounds like a smart stranging.
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  Speaker 4: Well, I mean if you had a frontal the bottomy
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  Speaker 4: and traveled backwards through time and then that's exactly what
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  Speaker 4: you do. But look, I mean this is exactly the
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  Speaker 4: sort of thing I think we need to teach. So
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  Speaker 4: there's risky stuff like you could go with Elon Musk
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  Speaker 4: and you're either going to become very RICHU or very poor,
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  Speaker 4: very quickly, very difficult to know, or you might be
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  Speaker 4: depending on your temperament. You say, Look, I'm just going
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  Speaker 4: to go with a sort of a balance, a portfolio
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  Speaker 4: of stocks that will probably not set the world on fire,
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  Speaker 4: but my gains and losses will roughly balance out and
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  Speaker 4: I'll end up a little bit ahead. So this is
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  Speaker 4: exactly the sort of thing that you know, I never
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  Speaker 4: learned at school. I mean, I think I got a
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  Speaker 4: very good education. It's a good school, into a good UNI,
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  Speaker 4: got an engineering degree, but I never learned any of
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  Speaker 4: this stuff myself later in life, and I think it'd
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  Speaker 4: be good for New Zealand if it was taught more likely.
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  Speaker 3: Yeah, well, the Warren Buffett challenge is probably something that
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  Speaker 3: people should be taught, you know, around indexed funds. Yeah,
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  Speaker 3: but look, you'll like this text here. I think it
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  Speaker 3: is the best idea that David Seymour has ever come
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  Speaker 3: up with in his whole entire career. I applaud him.
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  Speaker 3: That's from K.
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  Speaker 4: Well done. Oh, thank you. K.
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  Speaker 2: Pseudo was pretty good as well. Okay, I've just got
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  Speaker 2: to say, but there you go. Hey, David, thank you
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  Speaker 2: very much for catching up with us. I really appreciate it.
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  Speaker 2: We'll catch up again.
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  Speaker 4: So yeah, thank you guy, have a great day.
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  Speaker 2: That is the Eight Party leader and Deputy Prime Minister
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  Speaker 2: David Seymour's for more.
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