READER REPORT:

Can you fix it?: more saving, tougher benefits

KRIS RENOUF
Last updated 05:00 07/10/2012
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HELPING NZ: Lifting the minimum wage while also increasing KiwiSaver contributions will help the economy.

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We asked you how to fix the economy and were flooded with responses. We'll be running these in the coming days. To contribute to the debate hit the green button below.

Lifting saving rates, while also increasing the minimim wage, and encouraging foreign investment that works for New Zealand are steps in the right direction.

Foreign takeovers
Allow foreign takeovers of companies subject to current rules but also impose conditions that prioritise New Zealand jobs, exporting and environmental concerns. All large takeovers should pay a bond of $1 million (scalable on size) to allow the Companies Office and Overseas Investment Commission to investigate to ensure the preconditions are met.

Overseas borrowings
Encourage banks using the Reserve Bank New Zealand (RBNZ) ratio to demand more of their monies for mortgages come from NZ depositors (this will increase interest rates for savers). Through the same RBNZ ratios, require that banks have higher deposits for mortgages in areas where there are bubbles. These ratios could be lowered to encourage lending in other areas. For instance a simplistic approach would be building in Christchurch equals good, paying for overpriced Auckland housing bubble equals bad.

Insurance
Require insurers to have good faith valuing of insurance payouts and prevent them using legalistic wording to avoid paying out on insurance proceeds. This policy operates overseas and prevents insurers applying 'unfair' wording to avoid their responsibilities. Also require insurers to have sufficient capacity (between them all, so a pooled approach) to ensure they can investigate and pay out on any large scale insurance disaster.

Saving
If New Zealanders want to be rich or be able to pay for the things they want (eg healthcare, education, roads) then they need to save and invest. We also need to start owning assets rather than trinkets. You are more likely to get rich if you own the company making the trinkets than the trinkets themselves.

Kiwisaver
Make it compulsory. Increase the rates three per cent now, eventually up to eight per cent in five years. Require employers to match.

Minimum Wwge
Increase it to at least $15 and then by $1 every year. If an employer can't afford to run a business with labour as cheap as $20 then they need to relook at their business.

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Superannuation and benefits
All benefits and superannuation should only be paid to those who are unable to work - that is, the sick, disabled and unemployed and those with significant childcare responsibilities. If you can work but aren't looking to work then why should the taxpayer pay you to sit on your backside, regardless of age. Abolish superannuation - roll it in to the universal benefit just like all other benefits. Being a lazy 65-year-old is no more dignified than being a lazy 64-year-old. If you can work then you should work - if you choose not to then don't expect a handout.

Assets
Retain the energy companies in taxpayer hands. Monopolies don't work for NZ and NZ certainly doesn't benefit when the dollars go offshore - just look at the Aussie banks.


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