August, 2004
CTU Economic Bulletin No. 51
Submitted by EditorNews on 31 August, 2004 - 00:00.August, 2004
Comment
It is time for a further move on retirement savings. This time it needs to focus on the private sector (although the state sector scheme needs to have wider coverage also). In the last few years the Government has increased superannuation payments, established a fund to help meet future NZ Superannuation costs, reduced Prospectus requirements for superannuation schemes, lowered tax on employer contributions, and introduced the new state sector scheme. A Government-established Savings Product Group has just reported to Government. It was required to give advice on the design and implementation of guidelines for generic work-based savings schemes that could be widely adopted by employers. If a simple, easy to administer scheme can be designed, then it is reasonable to require employers to make deductions. There has been some public comment on the concept of enrolling workers in a scheme and then allowing them to opt out, rather than offer them the chance to opt in. The psychology of this is that people are much less likely to opt out than opt in. Some US research supports this contention.
CTU Economic Bulletin No. 50
Submitted by EditorNews on 2 August, 2004 - 00:00.July, 2004
Comment
There is continuing speculation among economists about wage increases as a response to labour market shortages. The Reserve Bank is also expressing concern about the inflationary effect of wage rises. This completely misses the point that with strong economic growth and resource constraints there is an opportunity for real wage increases alongside productivity improvements without much effect on inflation. But the main issue remains that after nearly 4 years of persistent labour shortages, wages are barely moving.