Tuesday, August 23, 2016

There's An Easy Solution To The Present Kiwisaver Cluster Munitions Debacle - Kiwifund

Last week, retirement-savers from around the country were shocked to discover that their hard-earned investment funds were potentially going towards funding the invention, sale and distribution of land mines, cluster munitions, and other nefarious products. Nuclear weapons are also apparently on the portfolio-books.

This is, predictably, quite shocking for many of us (particularly given all other Government long-term investment vehicles such as ACC and the Cullen Fund have stringent policies against pouring public money in these insalubrious directions); but sadly, what wasn't shocking at all was the Government's completely lackluster non-response to this pressing issue.

As in so many instances surrounding Kiwisaver's ongoing fate under National - ranging from the official slashing of Employer Contributions, through to tens of millions of dollars effectively being STOLEN from employees thanks to bosses not passing money on to the fund, and on into the occasionally ruinously high fees charged by some fund-operators - the Government's silence when it comes to proposing serious solutions has been deafening.

In stark contrast to this, there's one party which has long believed in the advancement of citizen-based national savings (often in the format of state-directed sovereign wealth funds) ... and it should therefore come as no surprise that New Zealand First has an elegant answer for pretty much all of the above issues:

We provide a #Nationalized option for employees' retirement savings, called Kiwifund.

This policy was first put forward by NZF in reaction to news that private Kiwisaver providers had managed to cream off somewhere upwards of a BILLION DOLLARS worth of fees and assorted other charges thanks to lax oversight of the scheme by the state. (By comparison, the administration costs for the Government's own superannuation vehicle - which is roughly the same size in dollar terms as the combined totals of Kiwisaver funds - comes in at a paltry 1.5% of that.)

But the reasoning for putting this idea back on the table now is a little different. The other chief advantage we have by farming our retirement savings out to the state rather than private fund managers is that there's therefore a greater degree of ethical behavior and morality which we can thus expect from the scheme's investment decisions. As already noted, this wouldn't have happened at either ACC or the Cullen Fund - the Government's other long-term investment vehicles - due to exactly the sort of legislative prohibitions which would also prevent Kiwifund from doing likewise.

What last week's shocking developments have roundly evinced is that when it comes to managing our money, the private sector regularly engages in shonky practices. We've already known for quite some time that this includes rampant profiteering at our collective expense. However it is altogether disquieting to find out that their recklessness is not limited to the level of profit extracted from us, but also the specific sources and mechanisms used to generate same.

It is increasingly clear, now, that the only way to truly remedy and rectify this woeful situation is to bring a large portion of the scheme under the aegis of a public-managed and -overseen fund.

Thank goodness that one political party had the foresight and the vision some years ago to propose a policy which would do exactly that.

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