Tag Archives: Superfund

Surely this is a flounder like flip flop of flat fish proportions right?

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So a few peeps have been asking me ‘how can they trust the Labour Party to not raise the retirement age when the party had voted to do just that in the past, even campaigned on it?’ Surely this is a flounder like flip flop of flat fish proportions right?

I won’t pretend I know exactly what’s going on, because I don’t, but I’ve had a quick look at some news articles from when they idea was first floated until now, so I’ll share this: from what I can tell Labour has held the position of raising the retirement age from since Phil Goff days, and mostly in response to the government suspending taxpayer contributions to the SuperFund (Cullen Fund). The SuperFund was designed to help address future universal super costs by annually funding a percentage of it future payments via investment in income producing assets.

However, when set up in 2003, and to serve its intended purpose, the fund required a commitment from future governments of comprehensive funding until 2020. The funding forecast ensured the fund had the necessary capital to make the required investments it would need to grow the fund to a state where it would be able to do the job it was tasked with. This is not happening and hasn’t been since 2009. To a lesser, but not insignificant degree, the government’s tinkering with Kiwisaver has already wiped money from people’s retirement accounts, meaning the numbers needing rather than merely opting to draw super in later years is likely to increase, ergo keeping overall costs high.

In light of the government’s seemingly willful blindness to the importance of funding the SuperFund, David Parker argued in 2014 for the Labour Party to retain Goff’s raising the retirement age plank as part of their retirement policy. Labour’s policy sought to signal to the country that in the complete absence of any other motivations to address future super costs under National, the age of entitlement would have to be the first cab off the rank for future governments desperate for solutions. Parker, like Goff believed if raising the retirement age was to become inevitable if National stayed in government, then it was important to signal to voters the date the age would have to start to moving up decades out, not years like what we saw in the 1990s when the age moved from 60 to 65 years over 10. Labour’s policy mirrored the Retirement Commissioner’s recommendation of reaching the increased retirement age in twenty years by 2033, thereby giving people an opportunity to consider alternative options, ie upskilling, increasing Kiwisaver contributions, private pension schemes, commercial investments.

Not contributing to the SuperFund from 2009 has cost New Zealanders up to $20 billion in contributions (ie capital to invest) and up to $50 billion in income producing assets. Meanwhile the government has drawn down $11 billion in dividends, leaving even less money for the fund to re-invest. SuperFund is a high performing asset, for context it is New Zealand’s biggest tax payer. In contrast, National want to increase the retirement age to save $4 billion in 2040.

Labour leader Andrew Little argued the maths vs the values of a fair society didn’t stack up and said as much during his leadership bid. He campaigned to keep the retirement age at 65 and democratically party members voted to back his call. A call that says, I believe in a future Labour government once again making retirement funding an immediate and pressing issue that needs addressing now – not in 2040 when Bill’s 85, and comfortably numb on his government paid MP pension.

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“Within the space of two terms of office we have put an end to decades of turmoil during which New Zealanders struggled to prepare for retirement while politicians kicked superannuation around like a football.
We have now stabilised the long term funding of the basic state pension so that it will remain a secure bedrock for all New Zealanders. And this year we have introduced a savings scheme that will place an achievable programme of retirement savings within the grasp of every working New Zealander.
We are giving New Zealanders a tangible stake in their future, and ensuring that that future is a solid one.”
—– Michael Cullen, Labour Government, 2005

So here we are in 2017 suffering from successive right governments unwilling to do the necessary funding to support future super costs, now claiming, like that other ship that couldn’t be turned Margaret Thatcher, we have no alternative…

T.I.N.A my …..

* Please note: no flounder were harmed in the making of this opinion/comment *

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Key’s biggest lie of all: his 1991 statement to the Equiticorp inquiry

The Standard has a posted an updated listing today of John Key’s lies. There’s a lot of them.

One lie that doesn’t often make these lists is what I believe to be the biggest lie of all: his 1991 statement to the Equiticorp inquiry.

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In July 1990 New Zealand’s newly formed Serious Fraud Office were charged with investigating the shambles that was Equiticorp and it’s now infamous founder Alan Hawkins.  Unraveling a ledger entry called ‘H-Fee’ ultimately saw Australia’s SFO equivalent, the now defunct National Crime Authority, assist with the Equiticorp investigation.  While the SFO pursued Hawkins over Equiticorp, the NCA went after Australian based Elders IXL and it’s founder John Elliot over the ‘H-Fee’ entries. It was alleged that $67 million (NZ$76) in fraudulent foreign exchange transactions were made in two payments to Equiticorp to pay back Hawkins for his assistance in Elliot’s 1986 takeover battle for steelmaking giant BHP.

Two years early on 26 August 1988, setting in motion the second  (A$27 million) of the ‘H-Fee’ payments, Elders IXL executive Ken Jarrett had met with Elders Merchant Finance manager Peter Camm and head of foreign exchange, Paul Richards in Wellington. The transaction was completed on 7 September 1988.

One week before been elected Prime Minister of New Zealand in November 2008, Key was asked about the truthfulness of this statement. He said it was 100% truthful, 100% correct and anything else was “a smear campaign by a desperate left”.

Is it a smear if an accusation is true?

When the NCA brought charges against Elliot and other Elders IXL executives, Peter Camm and Paul Richards were also facing fraud charges. In May 1991, now working at Bankers Trust, Key was asked to corroborate a part of Richards statement, namely a lunch he claimed that two had on 31 August 1988.

Richards was alleging it was the 31st and not the 26th that he and Camm had met with Jarrett that August. The trader was adamant of the date and told investigators he could recall the “lunch” and it’s “date”, as it was a “farewell” for “John Key” who was leaving the firm to go to Bankers Trust. Key agreed with Richards recollection of events and made a statement to the investigation reflecting that.

Except Key worked with New York based currency raider Andrew Krieger while they were both at Bankers Trust. This relationship has been confirmed by Key’s then boss, Gavin Walker. Walker has said of the relationship, that it was more or less in Key’s job description to look after Krieger, saying on Key’s first day with Bankers Trust he gave Key a list of their top clients, of which Krieger was one of them. Key himself has said he will never forget his first call with Krieger, where he asked Key about New Zealand’s GDP and it’s monetary supply.

For Key to have worked with Krieger, of which there is no doubt, then he would have had to have left Elders Merchant Finance in August 1987, and not 1988 as told to investigators, as Krieger resigned from Bankers Trust in February 1988. By June 1988 he had retired from the currency markets altogether, not returning to them until 1990. Readers may also recall Key told a reporter in 2007 he had indeed left Elders Merchant Finance in 1987 but called that a mistake when his 1991 Equiticorp statement surfaced a year later.

If Key wishes the New Zealand public to believe he was telling the truth to them in 2008 when as a wanna be prime minister, he assured them his 1991 Equiticorp statement was 100% true and correct, then he needs to explain to us how he, in late 1988, supposedly began working so closely with a world infamous currency trader who was no longer working in the currency markets. He also needs to explain how Walker, now Chair of the Board of Guardians of the New Zealand Superfund, could have his recollection so wrong as well.

What authorities need to know is, knowingly misleading a Serious Fraud Office investigation carries a maximum fine of $15,000 and/or 12 months imprisonment. Not too mention the possibly criminal issue of Key and Richards conspiring to mislead an investigation.

While some might question whether or not Key lying in his youth has any bearing on the man today, the facts are some 55,000 Equiticorp shareholders were defrauded of over $400 million dollars.

If Key was willing to lie to protect those involved in facilitating some of that fraud, does he continue to lie today to protect himself?

In his book ‘Dirty Collars’ ex SFO head Charles Sturt says this of the vast powers bestowed on his department,

“while a person may be compelled to answer questions, these answers may only be used in evidence if the accused subsequently gives evidence inconsistent with their previous statements”

John Key, did you lie to the Serious Fraud Office?

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