Mike's Minute: KiwiSaver reality vs ideology

Given the issues around KiwiSaver, it’s a miracle any of us save anything to become remotely independent in retirement. 

Last week we told you about the Morningstar rankings and how the biggest operator in the market was performing so poorly, and now we have yet another crack at where the money is actually invested. 

Mindful Money is upset over the increase in funds going to fossil fuel producers. We have a 20% increase in the last six months. 

That's despite the amount of new money flowing into KiwiSaver only being 7%. 

Mindful Money is clearly of the view that the whole transition away from fossil fuels is still an urgent and present thing, when clearly, it's not. 

What we have here is a clash of reality vs ideology. 

The reality is KiwiSaver funds look for returns. The ideology is that no matter how unrealistic it is to run the world on sun and wind, we still need to sacrifice more to get there. 

If there has been one crushing realisation this past year or so around that, it is the simple truth that the transition to renewables has been found out, and badly. 

Genesis has half a million tonnes of coal standing by for this winter to keep the lights on. They have another half million tonnes on order, with a backup order for another 200,000 tonnes. 

Someone mines that coal. That's good business and good business pays dividends. 

If you hate coal don't even look at India and China. Coal is booming. It doesn’t make it nice or palatable, but it's real and investment is about reality. 

We are in a time where the cold, hard truth of what we thought was going to be easy, isn't. It might not even turn out to be real. 

The last thing we need is KiwiSaver funds playing dumb games like the banks and looking to deny legitimate activity, the financial life blood, it needs to produce goods and services people actually want. 

What we want in KiwiSaver is a pool of money that grows. That happens by investing in relevant activities that turn a dollar and pay a dividend. 

Morale indignation doesn’t fund retirement. 

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Episode Transcript

Speaker 1 (00:00):
Given the issues around Key, we say, we've got to
talk to you about this. So this Key We Saber
business miracle. Any of us are saving anything to become
remotely independent in retirement. Last week we told you about
the morning Star rankings, right, how the biggest operator in
the market was performing so poorly. And now we have
yet another cracket where the money is actually being invested.
Group called Mindful Money is upset over the increase in

(00:21):
funds going to fossil fuel producers. We have apparently a
twenty percent increase in the last six months. That's despite
the amount of new money flowing into Key We Save
is only seven percent. Now, Mindful Money is clearly of
the view that the whole transition away from fossil fuels
is still an urgent and present thing, when clearly it
is not. What we have here is a clash of
reality vi ideology. The reality is Key We saver funds

(00:43):
look for returns right. The ideology is that no matter
how unrealistic it is to run the world on sun
and when we still need to sacrifice even more to
get there, if there's been one crushing realization that's passed
year or so around that it is the simple truth
that the transition to renewables has been found out and badly.
Genesis have half a million tons of coal standing by

(01:05):
for this winter to keep the lights on. They have
another half million tons on order, with a backup order
of another two hundred thousand tons. Someone minds that coal.
That's good business. Good business pays dividends. And don't even
look if you hate coal at India and China, coal
is booming. Doesn't make it nice or palatable, but it's real.
And investment is about reality. Where in a time I think,
where the cold hard truth of what we thought was

(01:27):
going to be easy isn't. It might not even turn
out to be that real. The last thing we need
a qyisaber funds playing dumb games like the banks and
looking to deny legitimate activity the financial lifeblood it needs
to produce goods and services that people actually want. What
we want in kiwisaver is a pool of money that grows.
That happens by investing in relevant activities that turn a

(01:47):
dollar and pay a dividend. Moral indignation doesn't fund retirement.
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