1 00:00:00,080 --> 00:00:02,000 Speaker 1: Now, Nicholas Oh, I'm going to get back to there's 2 00:00:02,000 --> 00:00:04,120 Speaker 1: a text there on Oh on the ladies being hired 3 00:00:04,160 --> 00:00:05,960 Speaker 1: and the DEEO positions are going to come back to that. 4 00:00:06,760 --> 00:00:09,240 Speaker 1: Nikola Willis has today announced the government will make its 5 00:00:09,240 --> 00:00:12,240 Speaker 1: first withdrawal from the super Fund, first ever, in twenty 6 00:00:12,240 --> 00:00:16,200 Speaker 1: twenty eight with us now is brad Olsen, Inframetric's principal economist. 7 00:00:15,800 --> 00:00:17,520 Speaker 2: Hey Brad good Evening. 8 00:00:17,640 --> 00:00:20,079 Speaker 1: Now, last year the projection was that the first would 9 00:00:20,079 --> 00:00:22,319 Speaker 1: first dip into it in twenty thirty three. So why 10 00:00:22,360 --> 00:00:24,360 Speaker 1: has this come forward by five years? 11 00:00:25,440 --> 00:00:27,639 Speaker 2: Well, effectively, it looks like the government doesn't need to 12 00:00:27,640 --> 00:00:31,320 Speaker 2: contribute quite as much into the future, and that as 13 00:00:31,320 --> 00:00:34,080 Speaker 2: soon as the model shows that there's not a contribution 14 00:00:34,159 --> 00:00:37,240 Speaker 2: to be made, that's effectively when the withdrawal starts to happen. Now, 15 00:00:37,520 --> 00:00:39,960 Speaker 2: all of this is not really a government choice. This 16 00:00:40,000 --> 00:00:42,960 Speaker 2: has laid out in legislation passed back in two thousand 17 00:00:43,040 --> 00:00:45,800 Speaker 2: and one, I believe as the Superfund was coming in. 18 00:00:46,280 --> 00:00:48,040 Speaker 2: So this isn't, you know, the government of the day 19 00:00:48,320 --> 00:00:50,440 Speaker 2: deciding they're going to do one thing or another. This 20 00:00:50,560 --> 00:00:52,720 Speaker 2: is very much just the mathematics of it. But what 21 00:00:52,760 --> 00:00:54,880 Speaker 2: it suggests as well, is that obviously we are getting 22 00:00:54,920 --> 00:00:57,240 Speaker 2: closer and closer to that time where the model shows 23 00:00:57,280 --> 00:01:00,560 Speaker 2: that actually the cost of the New Zealand Superstars is 24 00:01:00,960 --> 00:01:03,640 Speaker 2: large clearly and it needs to start to get a 25 00:01:03,640 --> 00:01:05,640 Speaker 2: bit of help from the super Fund to smooth that 26 00:01:05,800 --> 00:01:06,720 Speaker 2: over generations. 27 00:01:07,160 --> 00:01:09,840 Speaker 1: Oh so this is an indication of us having hit 28 00:01:09,880 --> 00:01:11,720 Speaker 1: some sort of a threshold with how much we're paying 29 00:01:11,720 --> 00:01:12,600 Speaker 1: in pensions, is it? 30 00:01:13,520 --> 00:01:15,880 Speaker 2: Well, that's in my view, that's part of it. I 31 00:01:15,920 --> 00:01:18,840 Speaker 2: mean that's also looking. I mean that the complicated formula 32 00:01:18,880 --> 00:01:20,800 Speaker 2: that goes into it looks at a whole range of things, 33 00:01:20,800 --> 00:01:23,520 Speaker 2: the cost of the Super scheme into the future, what 34 00:01:23,600 --> 00:01:26,200 Speaker 2: our economic growth is likely to be, like, what the 35 00:01:26,240 --> 00:01:29,520 Speaker 2: cost of future outgoings from the scheme and everything will be. 36 00:01:29,959 --> 00:01:32,160 Speaker 2: But it does mean we know over time that New 37 00:01:32,240 --> 00:01:34,280 Speaker 2: Zealand Super is starting to cost us more and more 38 00:01:34,319 --> 00:01:36,560 Speaker 2: as a proportion of GDP. We know that in the 39 00:01:36,680 --> 00:01:39,080 Speaker 2: upcoming budget, New Zealand Super is going to be a 40 00:01:39,240 --> 00:01:42,080 Speaker 2: larger line item than the entire education budget. I mean, 41 00:01:42,400 --> 00:01:44,920 Speaker 2: it's showing time and time again that these costs are 42 00:01:44,959 --> 00:01:48,000 Speaker 2: coming through. So it does Hidler there's a challenge and 43 00:01:48,240 --> 00:01:50,520 Speaker 2: that is also what the Super Scheme was designed to 44 00:01:50,560 --> 00:01:53,440 Speaker 2: do over time that fund would help smooth just how 45 00:01:53,480 --> 00:01:54,800 Speaker 2: big that cost was going to get. 46 00:01:55,040 --> 00:01:58,240 Speaker 1: Okay, now, did you get any kind of a clearer 47 00:01:58,280 --> 00:02:00,240 Speaker 1: picture as to what is going to happen to we 48 00:02:00,280 --> 00:02:01,200 Speaker 1: save her in the budget? 49 00:02:02,320 --> 00:02:04,320 Speaker 2: Look, I don't think the Finance Minister has given too 50 00:02:04,400 --> 00:02:06,600 Speaker 2: much away today apart from saying that ke We Saver 51 00:02:06,760 --> 00:02:08,440 Speaker 2: was in focus. I mean, I think you spoke to 52 00:02:08,480 --> 00:02:11,600 Speaker 2: her a week or two back about the potential for 53 00:02:11,840 --> 00:02:15,000 Speaker 2: the contributions that government makes to top up kei we savers, 54 00:02:15,240 --> 00:02:17,200 Speaker 2: you know, might be under a bit of pressure. The 55 00:02:17,240 --> 00:02:20,560 Speaker 2: Finance Minister won't go anywhere near answering that in the 56 00:02:20,639 --> 00:02:23,000 Speaker 2: lead up to Budget day. I wonder as well though, 57 00:02:23,040 --> 00:02:27,080 Speaker 2: particularly the focus might well be maybe that conversation, but 58 00:02:27,240 --> 00:02:31,960 Speaker 2: also potentially increasing the minimum contribution rates over time, so 59 00:02:32,120 --> 00:02:34,480 Speaker 2: a bit more targeted from the government in terms of 60 00:02:34,560 --> 00:02:37,799 Speaker 2: the contributions that they give back, but also lifting those 61 00:02:37,840 --> 00:02:41,360 Speaker 2: contributions like Australia has done that would help people save 62 00:02:41,520 --> 00:02:44,120 Speaker 2: more over time. So some potentials in the mix. But 63 00:02:44,280 --> 00:02:47,120 Speaker 2: put it this way, kei we saver also social investment 64 00:02:47,160 --> 00:02:49,880 Speaker 2: looking like a real key focus for the government. Limited 65 00:02:49,919 --> 00:02:51,840 Speaker 2: amount of money they've got to play with means they 66 00:02:51,880 --> 00:02:53,240 Speaker 2: need to get best bang for buck. 67 00:02:53,560 --> 00:02:56,520 Speaker 1: Hey, why is the New Zealand initiative not allowed into 68 00:02:56,560 --> 00:02:57,919 Speaker 1: the budget lockup? But you are. 69 00:02:59,520 --> 00:03:01,639 Speaker 2: I mean that's a question for Treasury as to who 70 00:03:01,680 --> 00:03:04,120 Speaker 2: they choose who gets in. I mean that seems to 71 00:03:04,120 --> 00:03:05,720 Speaker 2: be a little bit of a who's in who's out 72 00:03:05,760 --> 00:03:10,000 Speaker 2: at the moment. Well, I mean we've put our application in, 73 00:03:10,080 --> 00:03:13,400 Speaker 2: as we've done for coming up well over a decade 74 00:03:13,400 --> 00:03:16,960 Speaker 2: now at Infometrics. I mean we all provide different insights 75 00:03:17,000 --> 00:03:20,600 Speaker 2: and views, you know that. Really it's a question for Treasury, 76 00:03:20,639 --> 00:03:23,680 Speaker 2: and I think again, it seems odd that these organizations 77 00:03:23,680 --> 00:03:26,280 Speaker 2: have been allowed to apply but not told until a 78 00:03:26,320 --> 00:03:28,560 Speaker 2: week out from budget that they're not allowed to go in. 79 00:03:28,560 --> 00:03:30,000 Speaker 2: I would have thought they might have been told right 80 00:03:30,000 --> 00:03:32,280 Speaker 2: at the start, look, don't even apply because you're not 81 00:03:32,360 --> 00:03:34,800 Speaker 2: in the criteria. Letting them apply and then letting them 82 00:03:34,840 --> 00:03:36,640 Speaker 2: down a week out very very odd. 83 00:03:36,720 --> 00:03:39,320 Speaker 1: Yeah, well I'm glad you're there, Brad brad Olsen, Infometrics 84 00:03:39,320 --> 00:03:43,560 Speaker 1: Principle Economists. For more from Hither Duplessy Alan Drive, listen 85 00:03:43,640 --> 00:03:46,640 Speaker 1: live to news talks it'd be from four pm weekdays, 86 00:03:46,760 --> 00:03:48,960 Speaker 1: or follow the podcast on iHeartRadio.