Latest / Early Edition with Ryan Bridge / Jonathan Eriksen: Superannuation expert on the Government making it's first ever Super Fund withdrawal

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Jonathan Eriksen: Superannuation expert on the Government making it's first ever Super Fund withdrawal · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Ryan.
• 0:01
  Speaker 2: So we've heard from Nichola Willis in the pre budget
• 0:02
  Speaker 2: speech and she has hinted there's something that might be
• 0:05
  Speaker 2: coming to help with our Keiwi savers. The government will
• 0:09
  Speaker 2: also make its first ever withdrawal from the New Zealand
• 0:12
  Speaker 2: super Fun in twenty twenty eight. A couple of months ago,
• 0:14
  Speaker 2: I asked Nicola Willis about a potential boost because you
• 0:17
  Speaker 2: need to get our savings rates up. I think we're
• 0:19
  Speaker 2: at about one hundred or just over one hundred billion
• 0:21
  Speaker 2: dollars in Keywi saver assets at the moment, but you
• 0:24
  Speaker 2: look at Australia and it's something like forty trillion or
• 0:27
  Speaker 2: something massive. So anyway, I asked her about this a
• 0:29
  Speaker 2: couple of months ago.
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  Speaker 3: There are a range of other ways in which we
• 0:32
  Speaker 3: could help ki savers improve their balances, including the rates
• 0:36
  Speaker 3: of contributions and other things. So we're working through that.
• 0:39
  Speaker 3: But I think it's really important that more Kiwi's have
• 0:41
  Speaker 3: more financial security in their retirement and I'm prepared to
• 0:45
  Speaker 3: make changes to deliver that.
• 0:46
  Speaker 2: Jonathan Erickson's a superannuation and super fun to expect with
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  Speaker 2: me this morning. Jonathan, Good morning.
• 0:51
  Speaker 1: Good morning Ryan.
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  Speaker 2: How do you think they might go about doing this.
• 0:56
  Speaker 1: Well, there's two are very easy or austral forward ways.
• 1:00
  Speaker 1: One is to cut the rate of interest on our
• 1:03
  Speaker 1: savings so you get texts on your retirement income while
• 1:09
  Speaker 1: it's rolling up. And if you reduce the rate like
• 1:12
  Speaker 1: they do in Australia to fifteen percent tax on the
• 1:16
  Speaker 1: investment income, whereas a lot of New Zealanders pay seventeen
• 1:19
  Speaker 1: and a half or twenty eight, well, that would make
• 1:22
  Speaker 1: a huge difference to the compounding interest effect of our
• 1:26
  Speaker 1: growing savings. The other one would be to remove the ASCT,
• 1:30
  Speaker 1: the withholding tax on the employer's contributions and put that
• 1:35
  Speaker 1: in tax free, which is something that the Labor government introduced.
• 1:40
  Speaker 1: When can we say that started that the National Party
• 1:43
  Speaker 1: took off when they were empower under bilinguish.
• 1:46
  Speaker 2: Now those are obviously not going to be cost neutral.
• 1:48
  Speaker 2: They're going to cost the government something. What about an
• 1:50
  Speaker 2: option that wouldn't cost them anything? I putting up the
• 1:54
  Speaker 2: employer contribution and doing it that way, Well, that.
• 1:58
  Speaker 1: Would cut the employers And whilst politicians don't know it,
• 2:03
  Speaker 1: I run a small business and I can assure you
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  Speaker 1: that employers still have a vote.
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  Speaker 2: Yeah, the good point, and they voted for this party,
• 2:12
  Speaker 2: didn't they? What about the super fund? You know, the
• 2:14
  Speaker 2: fact that we're going to start pulling out of the
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  Speaker 2: super fund early? Is that a worry or should we
• 2:17
  Speaker 2: reach out about this?
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  Speaker 1: We should be thrilled. This is what the super fund
• 2:23
  Speaker 1: is for. It's up to eighty billion, which is just
• 2:26
  Speaker 1: a teed under one hundred billion in ken We say
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  Speaker 1: is right. And the point is that this super fund
• 2:35
  Speaker 1: is generating returns of about ten percent perannum, and one
• 2:39
  Speaker 1: percent of that would be eighty million. So paying thirty
• 2:45
  Speaker 1: two million towards our New Zealand super and reducing the
• 2:50
  Speaker 1: tax burden on the government or allowing that thirty two
• 2:53
  Speaker 1: million to be spent on health or education or pay
• 2:58
  Speaker 1: parity or whatever would actually benefit the government in terms
• 3:03
  Speaker 1: of its fiscal position, but wouldn't damage the super fund
• 3:07
  Speaker 1: at all. And as I say, that's exactly what this
• 3:10
  Speaker 1: fund was set up to do, to reduce the cost
• 3:13
  Speaker 1: of New Zealand Super. As our population ages and we
• 3:18
  Speaker 1: live no longer.
• 3:19
  Speaker 2: Okay, interesting, I'm thirty years away, I make calculating from
• 3:23
  Speaker 2: retirement age. By the time I get there, will New
• 3:27
  Speaker 2: Zealand Super exist? Do you think so?
• 3:31
  Speaker 1: Our question, because of this fund and because of the
• 3:35
  Speaker 1: system we've got now, one of the key issues is
• 3:38
  Speaker 1: whether they put the age up to seventy, make you
• 3:40
  Speaker 1: wait another five years. You've got to work for other
• 3:43
  Speaker 1: five right, But in atual fact, now with the health
• 3:46
  Speaker 1: costs and the changing population that we've got with mor
• 3:50
  Speaker 1: Mari Pacifica, we think that the age of retirement should
• 3:54
  Speaker 1: stay at sixty five. So the less moving of the
• 3:57
  Speaker 1: goldpost they do, the better, but the less texts they
• 4:00
  Speaker 1: take out during the accumulation phase the better too.
• 4:05
  Speaker 2: Jonathan Erickson, Superannuation and Super Fun Expert.
• 4:08
  Speaker 3: For more from Early Edition with Ryan Bridge. Listen live
• 4:11
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• 4:14
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