Written By: karol - Date published: 8:05 pm, October 21st, 2013 - 61 comments

Categories: david cunliffe, election 2014, greens, john key, kiwisaver, labour, national, russel norman, slippery, superannuation - Tags: kiwisaver

It’s interesting that Russel Norman has been quick to give conditional support to Winston Peter’s proposed KiwiFund, considering that many see the Greens and NZ First as being too far apart to be part of the same governing alliance of parties.

Peters’ version appears to be a proposal for the full nationalisation of KiwiSaver:

An outline plan of “KiwiFund” has been announced by Rt Hon Winston Peters in his keynote Leader’s address at the party’s annual convention in Christchurch today. Mr Peters told delegates that private funds managers were sucking the lifeblood out of KiwiSaver, and in five short years had already taken $325 million in management and investment fees. […] “Our plan is to change KiwiSaver so that it is a truly government-backed and managed retirement fund. Because of the economies of scale, and the elimination of hordes of ticket clipping fund managers, costs will be greatly reduced. People who pay into KiwiSaver will get their full return.”

Russel Norman’s preference

is for a state run KiwiSaver provider, alongside privately run schemes:

The Green Party sees New Zealand First’s proposal for a public option for KiwiSaver as a move in the right direction, providing that it is about providing competition to the existing private KiwiSaver funds and not proposing to nationalise them. […] “There is considerable common ground with our KiwiSaver policy launched in the run-up to the 2011 election,” Green Party Co-leader Russel Norman said today. “A public fund can achieve significant fee and cost reductions through greater economies of scale. Our fund would be an optional default KiwiSaver fund. “Under our proposal, the investment function – the back-end – would be managed by the $23 billion New Zealand Superannuation Fund while Kiwibank or the Inland Revenue Department can provide the front-end management of individual KiwiSaver accounts. […] The recommendation for a single default KiwiSaver provider was made by the Government appointed Savings Working Group in January 2011.

While Cunliffe is reticent about committing to any of these chanegs, he isn’t averse to negotiating with NZ First over their proposal.

Hamish Rutherford writes:

Labour leader David Cunliffe said he would not make commitments about coalition agreements until after the 2014 election, but “of all he things I can imagine having to negotiate post election, this wouldn’t be the hardest”. Labour also had concerns over fees charged on KiwiSaver funds, particularly on conservative funds, but the system wasn’t “broke”.

In contrast, John Key

is dismissive of any of the above proposals:

Prime Minister John Key has dismissed NZ First’s policy to create a state-run, locally focused KiwiSaver fund. […] “So instead of 20 managers having different strategies, different ways of doing things, different profiles, some more risky, some less risky, that you choose, so why on earth would we want to do that,” he said. “I know that these guys are on this track at the moment of wanting to nationalise electricity, nationalise building, nationalise our management funds, they’ll be nationalising supermarkets and petrol stations and everything else soon. “That worked really well for the Soviet Union when they were doing that,” Key said.

And Key seems to be suggesting NZ First would not stand by this policy in any post-election negotiations:

NZ First would not form a coalition, or even sign a confidence and supply agreement, with any party not willing to adopt it as government policy. But Key said he found it highly unlikely the policy would be a deal-breaker for any potential coalition with NZ First. “Winston Peters speaks in riddles. He has for his entire career from what I can see. He’ll find some way of saying this is sort of introduced, or being looked at, but mark my words it won’t be bottom line.”

So, Key appears to be saying that he would be up for forming a government with someone like Peters, who Key sees as being untrustworthy.

Nevertheless, it’s interesting to see that, on at least one possible policy area, Labour, the Green Party and NZ First seem to be closer than any of them are to National.

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