-
Retirees playing bowls - Source: ONE News -
Watch Video
-
Related
Business commentator Brian Gaynor says the government's move to defer payments to the Super Fund is "very disappointing".
On Thursday, Finance Minister Bill English announced that the government would suspend payments to the government's superannuation fund for 10 years, much longer than the anticipated 1-2 years.
English defended the move, saying New Zealand could not borrow money to save and instead channelled funds to health, education and infrastructure investment.
However, Gaynor says the borrowing and savings criteria in New Zealand is "all wrong" and the country is desperately need of some savings.
"It's not as if this is the only area we borrow for. I'm amazed at the extent we borrow in New Zealand and waste the money, and when there's some suggestion that we borrow to invest wisely, that's always seen as negative," he says.
Gaynor says it the Super Fund was to get a reasonable rate of return, the 8-9% compounded every year would be a higher return than from expensive borrowing.
"We're really caught in a bind between ill conceived borrowing and poor investments," he says.
He says the other downside to the Budget was its focus on appeasing the credit rating agencies to avoid a downgrade.
This has in turn strengthened the Kiwi dollar following New Zealand's ratings confirmation.
Gaynor says this has terrible consequences for New Zealand that is banking on an export-led economic recovery.
It will also affect tourism, making it a more expensive destination.
Gaynor also says this could put New Zealand on the fringes of economic recovery when the rest of the world rebounds.
