Latest / Best of Business / Cameron Bagrie: independent economist issues warning over nation's overloaded pension system

Transcript

Cameron Bagrie: independent economist issues warning over nation's overloaded pension system · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talks. That'd be
• 0:12
  Speaker 1: follow this and our wide range of podcasts now on iHeartRadio.
• 0:16
  Speaker 2: The OECD has just released its two yearly report card
• 0:19
  Speaker 2: on our economy and it is calling for some very
• 0:22
  Speaker 2: big changes to the electricity market. Economist Cameron Baggery is
• 0:25
  Speaker 2: with us on this.
• 0:26
  Speaker 1: I can no good now.
• 0:28
  Speaker 2: One of the recommendations is that the government reduces the
• 0:31
  Speaker 2: dividends that the gent tailors pay out. Do you see
• 0:33
  Speaker 2: that happening.
• 0:36
  Speaker 3: I guess the government's in a bit of a catch
• 0:37
  Speaker 3: twenty two at the moment because they like the cash
• 0:39
  Speaker 3: that comes out of those dividends. But some potant part
• 0:42
  Speaker 3: of cash flows. But if you look at the long
• 0:45
  Speaker 3: term situation here in New Zealand is pretty simple. And
• 0:47
  Speaker 3: when I go to the electricity demands exceeding supply. Demand
• 0:50
  Speaker 3: exceed supply of trosses go up. So you need to
• 0:53
  Speaker 3: restore a little bit of balance in the equation that
• 0:54
  Speaker 3: comes from restoring supply. One of the mechanisms you used
• 0:59
  Speaker 3: to restore supply is you allow those soees to keep
• 1:03
  Speaker 3: you a little bit more money on their balance sheet
• 1:04
  Speaker 3: so that they can invest in infrastructure.
• 1:06
  Speaker 2: Right, except that hasn't worked. There is not an investment
• 1:09
  Speaker 2: that's working. So the other suggestion from the OECD is
• 1:11
  Speaker 2: a separate market, presumably government controlled, where they release firming
• 1:16
  Speaker 2: power and flood the market and try to keep the
• 1:17
  Speaker 2: prices down.
• 1:18
  Speaker 3: Would that work so potentially, But once again, the devil's
• 1:22
  Speaker 3: in the detail. In regard to these sort of things.
• 1:24
  Speaker 3: It's fine and dandy to throw a whole lot of
• 1:26
  Speaker 3: big picture of ideas around, which we sort of see
• 1:28
  Speaker 3: from from year to year old of me. You need
• 1:30
  Speaker 3: to go to the find de time and regard whether
• 1:32
  Speaker 3: we can assist whether the stuff is actually going to work.
• 1:35
  Speaker 2: What do you think about the idea of means testing
• 1:37
  Speaker 2: super right? Imagine you're a fan.
• 1:40
  Speaker 3: I am a fan, I lock it someone like myself,
• 1:43
  Speaker 3: and the idea that I'm going to be entitled in
• 1:45
  Speaker 3: the zone superannuation just seems absolutely nuts. Like you look
• 1:49
  Speaker 3: at the maths, pretty simple maths. Sixteen percent of the
• 1:52
  Speaker 3: population at the moment's currently aged sixty five plus and
• 1:56
  Speaker 3: about twenty thirty years that proportion is going to move
• 1:58
  Speaker 3: up to twenty five percent. That means more costs and
• 2:01
  Speaker 3: regard to health. In regard to the u zerone superannuation
• 2:04
  Speaker 3: and a relatively smaller workforce which fall into the tax base.
• 2:07
  Speaker 3: So we're on an unsustainable fiscal path. Now the government
• 2:11
  Speaker 3: needs to buy the bullet and regard to making some
• 2:13
  Speaker 3: pretty big, hard, bold decisions. We've been talking about this
• 2:16
  Speaker 3: sort of stuff thirty years. I can remember modeling this
• 2:19
  Speaker 3: sort of stuff in the nineteen nineties when I was
• 2:21
  Speaker 3: at New Zealand Treasury thirty years ago. And all that's
• 2:23
  Speaker 3: happened is that we've kicked the can down the road.
• 2:26
  Speaker 3: Now a little bit of stuff has been brought in
• 2:27
  Speaker 3: the ZEE on super fund your key, we say with contributions,
• 2:30
  Speaker 3: but when push comes to share to sharp here that
• 2:33
  Speaker 3: we need to address the entitlement side of the Zealand
• 2:36
  Speaker 3: Superannuation and that comes through he potentially lifting the age
• 2:39
  Speaker 3: or means testing has to come into the equation.
• 2:41
  Speaker 2: KEM, thank you very much. I really appreciate your time,
• 2:43
  Speaker 2: cam Bagri. Independent economists. Other things they recommend is lifting
• 2:48
  Speaker 2: the age of superby linking it with age expectation, like
• 2:51
  Speaker 2: a life expectancy with a cap of sixty nine, so
• 2:54
  Speaker 2: not going any higher than sixty nine. And that's where
• 2:57
  Speaker 2: you have to have the super by sixty nine a
• 2:59
  Speaker 2: win full tax of fifty percent on capital gains from
• 3:01
  Speaker 2: land rezoning as well. OECD is expecting economic growth would
• 3:05
  Speaker 2: recover to about one point four percent this year and
• 3:07
  Speaker 2: then two went three percent next year.
• 3:10
  Speaker 1: For more from News Talk set B listen live on
• 3:13
  Speaker 1: air or online, and keep our shows with you wherever
• 3:16
  Speaker 1: you go with our podcasts on iHeartRadio