There is a phoney situation prevailing at present, Callum(#15).

We witness our Reserve Bank ponitificating to the commercial banks, moralising to them as to what they should and should not do, and really speaking, is recently taking an unorthodox approach similar to a lot of church groups and is engaging in politics.

Bankers are like any other business in our capitalist system and are there to maximise profits. They are engaged in a potentially very profitable industry, and unfortunately our past governments with "commercial acumen" as "an McKinnon(#14)" terms it, in their wisdom, sold or allowed the sale of our commercial banking industry to foreign interests and have at times since opposed its reestablishment with domestic control and ownership.

The Reserve Bank is "huffing and puffing like the big bad wolf".

The phoney situation is that retail interest rates are, overall, not representative of a free market. The Reseve Bank has implemented monetary policy to force an artificial (contrary to market supply and demand) lowering of interest rates in order to stimulate the economy. Muldoon tried the same thing using a more extensive regulatory control about 1983 and it could not last. The borrowing and lending of money is very much market driven and secondary markets will emerge with interest rates that reflect that fact - or economic activity will be stymied due to unavailability of credit.

The government borrows at wholesale rates (refer Vernon Small's article, today's Dominion Post). A fund manager makes decisions to maximise the gains to the fund. He makes selective investments from a range of local or overseas capital markets, retail fixed interest bonds, commercial property etc and a public fund would be required to invest within legal criteria.

It is possible that due to the phoney market situation at the present time that capital markets might be predicted to go lower and the alternative of retail fixed interest markets are not reflecting a profit on global wholesale borrowing rates. It is also possible that the investment constraints on the Fund are too restrictive for it to operate profitably. Neither of these situation should be allowed to exist for very long. There have been suggestions regarding variation in the way the Fund operates in order for it to generate added value.

Applying your argument, Callum(#15) is to say the Government should not be borrowing at all and it is substantively doing quite the opposite.

What is being made very clear by all experts is that without establishing a sinking fund, the prospect of the National Superannuation entitlements being maintained from current revenues until alternative personalised funding is adequate will be too great an impost.

We do not want a government that will just pay lip-service to superannuation and at the same time whittle away provisions - we want a government that will commit to "66 at 65" and demonstrate how achieving this is practicable.

Bring back Winston Peters.

The economics of ceasing contributions while in a deficit are very clear. If you have to borrow to invest, you have a very very high risk of paying MORE in funding costs than you get in investmet returns and effectively go backwards. The arguement that we won't have the income in future to catch up the delayed contributions makes no sense, if we can't afford to catch up the payments in future we wouldn't have been able to service the loans that we would have to take out to make the contributions now. All the delay is doing is removing the risk of investment returns being less than interest costs. Whether we can afford those contributions in future is a totally different matter.

Reading the above comments, it is unbundantly clear why most Labour supporters live in State houses, and have very little. Their command of economics is abysmal. Thank goodness there is a Government in power with some commercial acumen. Long may they stay.

Not true (unfortunately) that the retirement age has been raised to 67 in the UK. People here can still be forced to retire at 65.

Hahaha... If we wish to make comparisons with life in the 30's, ian(#11), we will find many, many differences and I am sure almost all of these will be that life has changed for the better.

There are certainly some true-blue conservatives around - what about we look at life expectancy in Dickensian London?

There were illnesses such as consumption (TB), polio, and diptheria killing people, and penicillin had not been produced.

But I think you empahasise one point on my behalf.

Despite what Muldoon has called it, National Superannuation is a welfare benefit. The most obvious anomaly in our whole welfare system is that individuals, no matter how much other wages, salary or business income they receive, also receive National Superannuation in full.

National Superannuation is paid to individuals when they have not retired in any sense of the word (except that they might be coasting along in some "sweet job").

Tell me which other welfare benefit (which everyone has paid taxes to facilitate) enables double-dipping of this order?

By comparison, if anyone were convicted for working in a fulltime job whilst claiming the unemployment benefit it is likely the penalty would be severe. This is not welfare for the middle classes - it is even welfare for the elite.

Anomalies such as this one should be corrected before there is even talk of raising the age of eligibility.

But the superannuation regime should not be undermined and whittled away in a piecemeal fashion as the National Party seem prepared to do by its recent budget leaving contributions to the NZS Fund dead in the water.

Changes should be made in a deliberate and comprehensive manner as part of a genuine attempt to maintain the "66 at 65" (Winston Peters) for future generations.

since the pension was set up in the 30's life expectancy in new zealand has risen by about 20 years, but the qualification age has only risen by 5 years. tell me this is not broken and a drain on society.

I think Cw(#7) that the "contributions holiday" was designed due to the Fund being constrained to particular "capital market-type" investments in order to generate profits.

If the National/Act government is going to direct the Fund to a broader type of domestic investment which implicitly restricts the fiscal need to borrow externally, then it should not be able to use "the need to borrow" as an excuse to not maintain contributions.

It appears to me that, in order to be a most effective earner, the Fund might require a broader operational ambit, but this should complement its actuarial integrity being maintained by regular government contributions.

The true purpose of the Fund should be upheld - for it to be undermined and used as a funding source by the National/Act government to progress its pet projects would be a cop-out.

This nonsense about upping the retirement age has to be stopped before everyone talks themselves into it.

Retirement Commissioner Diana Crossan said on National Radio yesterday morning that the research is not being done - the Commission is not being furnished with vital planning information.

She was reticent to make comments because she did not have statistics and information which she considered to be necessary. This is a totally unsatisfactory situation.

Sets of data which I am curious about are:

1) It is all very well saying people are living longer and having statistics to show it, but how many consider they enjoy workforce-standard health and mobility? A diabetes "epidemic" has been forecast. There are vulnerable people with impaired quality of life who are "kept alive" by modern medicine and social services.

What is the prevalence of people in this category?

Senior citizens of traditional retirement age ( age 60 and above ) should not be pressed to obtain medical certification on this matter. The "twilight years" are a complex syndrome which is able to afflict individuals at variant age, and self-diagnosis should rate. Senior citizens should not have to be classified as sick.

What percentage of people consider they have a disability?

2) What would be the quantum fiscal savings if there were progressive marginal taxation of employment and business income above 100% average wage? In other words, if there were 66% available from National Superannuation and a further 34% from employment/business income before a surtax applied?

With the recession there is a call for early retirement schemes. It seems to be counter-productive that older workers are able to receive an income from National Superannuation together with opting to continue a fulltime job.

3) What quantum investment income is derived by National Superannuitants?

It would appear to be counter-productive to apply anything which would be a disincentive to savings for retirement, because this is a significant motivation for saving in general - at a younger age we all have the hope of a long and healthy life with money and time to do things we enjoy.

But depending on the significance of a surtax on employment/business income it might be necessary to impose some limit on investment income before an abatement regime applied.

Means testing is administratively costly and is a disincentive, but employment, business and investment income have historically been distinguished for various taxation purposes.

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To many people an increase in the age of eligibility is a further move to a "work till you drop" regime - that the choice of a concept of "retirement years" is denied.

There are other factors (apart from age eligibility) which should rate and which are more generally acceptable at this very time. Personally, I have spoken to few people who disagree with the surtax (double-dipping) theory.

The government should not be enabled to generally whittle away superannuation provisions and entitlements to make general savings, and the National/Act Government, at the time of recession and its first budget, has commenced this ad hoc practice.

There is once again a strong call for a concerted and comprehensive reaction, and savings resulting from specific changes to National Superannuation should be applied to supporting existing entitlements as nearly as possible.

I am in my mid 20s so who knows what kind of support will be there for myself and my friends in 40 years time.

Could they be planning for Kiwisaver to be our own personal super fund?

oh please, while it may look like there wont be any money to pay for super in the future, there would be even less money if the super fund money had been funded with borrowing (as that would probably cost more than the returns on the investment).

Also, if suspending contributions to the fund was such a bad idea why did labour design the legislature so that could be done?