Liam Dann: NZ Herald Business Editor at Large calls for bipartisan effort to reform KiwiSaver

There's hopes compulsory KiwiSaver can help New Zealand catch up to Australia's economy. 

The National Party is campaigning on making KiwiSaver mandatory for all workers, and for gradually raising the matching rate to six percent. 

NZ Herald Business Editor at Large Liam Dann says he wants to see a bipartisan effort and for the Labour Party to get on board. 

He says people will need to get used to that six percent figure. 

"They're at higher levels than that in Australia - it's painful in the short term, but they do cope. And then, you move on and then you forget about it and you just look at that giant figure on your KiwiSaver statement."

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Sunday Session podcast with Francesca Rudkin
from News talks'b Right.

Speaker 2 (00:13):
A push for compulsory key WE saver is gaining momentum
with New Zealand First National Opportunities Party or backing some
form of mandatory retirement saving. New Zealand Herald Business Editor
at Large Liam Dan says New Zealand has spent too
long relying on borrowing instead of saving, and argues compulsory
key WE saver could be the key to building the
kind of long term wealth that's helped Australia surge ahead economically.

(00:36):
He's urging the Labor Party to do future generations a
favor and get on board with compulsory key WE saver,
and Liam Dan joins me. Now, good morning, Good morning, Francesca,
thank you very much for your time. Hey, is compulsory
key WE savor the economic game change in New Zealand's
been missing.

Speaker 3 (00:53):
Well, Look, I don't really believe in the idea of
a single silver bullet, but I think when you look
at the things that could change the game for us,
it's right up there is one of the most significant
and you know, I'm sort of excited that we're as
you point out, you know, we've got two parties in
the coalition, a party that could be a coalition decided

(01:15):
or if it gets five percent, you know, three parties
that are significant their national being, the big one really
deciding to go for it. So we're close. We're close
to sort of a bipartisan approach to this. And I
just think, you know, I look across at Australia and
I see all that wealth. People ask me all the time,
you know, why is Australia richer than us? And I

(01:36):
think it's as simple as as why the you know,
the guy next door or whatever is richer than us.
It's you saved more money, you have more money.

Speaker 2 (01:44):
Should we be comparing ourselves to Australia?

Speaker 3 (01:47):
Is it?

Speaker 2 (01:47):
Is it relevant in this situation?

Speaker 3 (01:50):
Yeah? Yeah, And we compare ourselves to Australia all the
time because we're geographically close, culturally close, and you know,
we see their lifestyle and it's similar to ours, but
it's it's got they get paid more to live it.

Speaker 2 (02:06):
There's also there's also more of them and they have
a slightly different economy than now and things like that. Yeah.

Speaker 3 (02:10):
Well, I mean I think that the mining thing is
the one that comes up all the time, isn't it,
Because and I've looked into this. You know, it's not
wrong to say that they earn more money as a
nation from from exports per capita than us because of
their mining. But I think it is overly exaggerated and
we overly you know, there's a tendency to say, oh, yeah,

(02:31):
we can't compete with them because we don't we don't
have have masses of iron or coming out of the
ground or whatever. When you when you actually look at
it and you break it down a bit further into
how much commodity experts we earn and how much of
that that export money stays in the country. Illan is
not too bad. You know, we're five million country with

(02:51):
a massive dairy industry, one of the biggest dairy industries
in the world. You know, we have a huge tourism industry.
So we're we're behind them per capita, on on on
what we bring in in export commodities. But they it
has often forgotten that the status. I've seen eighty six
percent of their mining industry as far and owned. So

(03:12):
while it does generate higher taxes for them, good tax
base for them, and high paying jobs. They lose a
lot of those profits. Of sure, we retain a lot
more of our modernity export profits here because of fonteria
and things, but then we lose money. We're draining money
because we don't own our banks, we don't own most

(03:33):
of our international companies, so profits go out. We have
a lifestyle that we really can't afford, and so we're
borrowing both the government and privately billions of dollars every year.
We have a deficit just to find our lifestyle. And
as many commentators point out, you can't do that forever
or you end up just going backwards. So the key

(03:54):
to that is having a massive savings pool. That means
that you're invested around the world as well. So whatever
is leaving the country, you've got dividends coming in from
all your investments and other companies. What one's lacking that
that sort of net balance of savings dividends them.

Speaker 2 (04:13):
You argue, New Zealand doesn't have an income problem, it
has a savings problem. Is the reality that keewis are
just bad Savers's compulsory? Can we save?

Speaker 3 (04:21):
The answer? Well, I think all all people you know,
there is an idea and this you know, I've pointed
out this is why parties like ACT and people on
that sort of part of the part of the sort
of political spectrum don't like compulsion because there's an argument that, well,
people should be you know, have freedom to be rational
economic units. And they might. They can, they can decide

(04:44):
what's best for their money. But I just I just
don't think that stacks up. And I'm not trying to
say I'm clearer than anyone else. I'm just as stupid
as everyone else. And I don't mean, you know, but
but people, people don't always do the best thing with
their money. They you know that you just have to
look at gambling stats and things like that, or you know,
we all we all splash out we shouldn't. And I

(05:05):
have this idea that you know, you see these personal
finance articles and it'll be about a couple somewhere that's
got they're anying over one hundred thousand each and they
can't work out why they're poor, and the personal finance
person is trying to sort them out. That's what New
Zealand reminds me of. We don't have a problem with
really with the amount of revenue that's coming into the

(05:26):
country we have a problem with what we're doing with
the money once it gets here. So the compulsion is
a way to ensure that you know, everybody is saving,
we're collectively growing the pot to a much higher level.
And then it leads to other conversations, of course, about
how much more we need to save. I've seen some

(05:47):
pushback on the idea that we need to be going
for six percent savings and six percent contributed by the employer.
But you know, they're at higher levels than that in
Australia and it's painful in the short term, but they
do cope, and then you move on, and then you
forget about it and you just look at that giant,
giant figure on you on your own care We say mistake,

(06:07):
and you hope.

Speaker 2 (06:08):
That there's not another. You hope that there's not another crisis,
and we want to drop. Thank you so much for
talking us through that. Liam really appreciate that. More from Lim.
You can head to New Zealand Herald dot co.

Speaker 1 (06:17):
Dot MZ for more from the Sunday session with Francesca Rudken.
Listen live to News Talks it Be from nine am Sunday,
or follow the podcast on iHeartRadio.