We all know that this government spends money like a drunken sailor, even printing a lot of it when they don’t have enough to splash around. But, what goes up must come down… and in this, I am referring to government debt rather than government spending. It seems they cannot justify continuing to print money – or maybe Adrian Orr has found himself under pressure to do something about inflation. Isn’t that his job? I always thought it was.
Anyway, if the government can’t print any more money, the only thing they can do is either spend less or find another source. But cutting spending is an anathema to a socialist government, and this one beats all previous socialist governments hands down. So what is a poor rabble of socialists to do?
You guessed it. They have to get creative about new forms of taxation… and their latest idea is a doozy.
New tax rules will see the Government net an additional $225 million in tax each year by streamlining the way fees on managed and KiwiSaver funds are taxed by GST.
Financial agencies and GST experts have warned the tax will hit KiwiSaver balances hard and be passed on in the form of increased fees, while the opposition has described it as “yet another tax grab … to fleece New Zealanders of their hard-earned cash”.
You don’t say… I disagreed bitterly when the last National government introduced taxes on the employer contribution to Kiwisaver, thus reducing the amount that the employer contributes to their employees’ pension funds. But this latest plan by the greediest socialists in the history of our nation introduces an element of audacity not previously seen by any government in recent years.
The Financial Services Council of New Zealand (FSC) also described the changes as legislative “overreaches” and a “suboptimal outcome” in the middle of a cost-of-living crisis.
The effect of the new rules will lift GST on fees for managed funds and KiwiSaver to the standard rate of 15 per cent.
So what? you might say. But here is the thing. Financial transactions do not have GST levied on them. They never have. So, bank fees, interest, and all other financial transactions do not include GST… except that now, they do.
Of course, this has the potential to open up a huge windfall for the government. Will bank fees be next, including fees charged on loan drawdowns. How far will this go? This government still has some serious spending to do.
Modelling from the Financial Markets Authority (FMA) warns the tax and its compounding effects will dent KiwiSaver balances by $103 billion by 2070.
This compares to total KiwiSaver balances which are expected to be $2196b in 2070.
Non-KiwiSaver funds will be hit by $83b. Total fund balances in 2070 would be $1757b. The figures were included in a Regulatory Impact Assessment (RIA) published with the rule change.
NZ Herald
These are significant numbers. Okay, they are not immediate, but this policy will begin to impact Kiwisaver funds almost straight away. Your returns are going to reduce, your fees will go up… and you can thank Jacinda and Grant Robertson for this.
I have spent years reassuring people that Kiwisaver is not some cash cow that the government can milk at will. OK, the contributions are collected by IRD, but the funds are managed by private institutions. To me, that seemed like an assurance of independence.
But there is nothing that this government will not rape or pillage in their quest to turn the country into a socialist Mecca… including ripping off people who contribute the minimum they can afford so that they might have something to look forward to in retirement.
Let us never pretend that this government is looking after the little guy. They are looking after themselves, pure and simple.
In the meantime, you might want to look at alternatives to Kiwisaver. The trouble is that, for many people, Kiwisaver constitutes the only retirement savings that they have. That is what this government relies on. And don’t forget, if you have funds in managed funds other than Kiwisaver, they will be affected in the same way.
Every time I think this government cannot do anything worse to the citizens of this country, they manage it. And, as always, it is those at the bottom of the heap that will suffer most.
