Monday, 21 October 2013

Watch out,Winston wants your wallet

If KiwiSaver is Welfare for Empty Suits, as I’ve argued before—a form of “soft compulsion” herding NZers’ paypackets and a forced subsidy from employers and taxpayer towards suits who wouldn’t be able to attract it otherwise—then  what would Winston’s would-be nationalisation of Kiwisaver be?

Maybe we could call it Welfare for Bureaucrats in Suits?

But really, it’s much worse even than that.

It’s means whereby which most of the country’s savings and wealth would be handed over to government to run.

Which would essentially make one large pot in the government’s hands—a slush fund for future governments in need of funds to back up their overspending, with no constitutional restraints against its plunder.

That, right there, is why Labour will have no problem with accepting Winston’s would-be bottom line as their own. Because no government can turn down a chance to plunder a pot like that, especially when the blame for going wrong (and what could possibly go wrong with such a scheme!) can always be sheeted elsewhere.

There is an argument around this morning that Winston making his proposal a “bottom line” in coalition negotiations would pose a problem for Labour.

This, too, is nonsense.

First of all, as every journalist should know, Winston’s only bottom line is baubles. Everything else he says is just window-dressing.

Second, there is enough in common between Cunliffe-and-Peters stated policies already to form some kind of common-law marriage, without their supporters falling out.

Both Labour’s new leader and NZ First’s old leader want to soak the rich.

Both Cunliffe and Winston wish to devalue the dollar to “help” exporters.

The Labour Party announced a few months back it wants to nationalise the electricity market.

And the NZ First Party announced over the weekend it wants to nationalise the KiwiSaver industry.

You’d think all this and more would make the two nationalisers a good fit. And with Winston making his nationalisation plan a “bottom line” for any post-coalition deal, that also gives Cunliffe the chance to pretend (for a while at least) that he’s only a reluctant nationaliser.

And since both these “markets” are already full of what economists call “rent-seekers,” I’d be surprised if anyone involved will be able to make a decent principled case against it.

5 comments:

  1. There was an election time referendum (1999?) on the right dishonourable Winston's compulsory savings. I think there was about 73% NO.
    {Wonder what would have happened if Labour's 1973 compulsory savings scheme had come to pass. [complete with dancing Cossacks]}
    Peter

    ReplyDelete
  2. Kiwisaver is a loser. If you have any money in it then you are going to lose out. It matters not whether the guys administering it do a good job or not, they will be paid very well indeed. When they do badly (and they do badly much more frequently than the PM and regime economists care to admit), any losses are yours to suffer.

    Amit

    ReplyDelete
  3. Wonder what would have happened if Labour's 1973 compulsory savings scheme had come to pass. [complete with dancing Cossacks]

    One doesn't have to wonder much, one can simply look at Australia's similar, and extremely successful scheme.

    ReplyDelete
  4. Do we want to provide for our selves and our families as free adults or do we want the Gov't to provide as if we are still dependent children ?

    ReplyDelete
  5. Fentex

    "One doesn't have to wonder much, one can simply look at Australia's similar, and extremely successful scheme."

    Successful for whom exactly?

    In reality it is a massive Ponzi, as you ought to well know. Apart from continually raising the demanded contibutions for gainfully working people there has been a major major structural alteration- one which did not raise much comment from the media or advisory "experten" (because they were too busy smacking their lips at the opportunities it presented them and their mates). The "scheme" (now there is a good word for it) was changed from defined benefit to defined contribution. Some say a good feature is that it is possible to set up a self-managed super scheme should you happen to possess enough cash. The trouble is that the government knows where every penny of every investment resides and they can get at it at any time. For example, last I was in Australia at conference, there was discussion to alter the legislation such that the payout beacme a compulsory fixed annuity. NONE of these compulsion schemes ever work. NONE.

    Amit

    ReplyDelete

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