This is edition 2025/217 of the Ten@10 newsletter.
Hi all,
This is the Ten@10, where I collate and summarise ten news items you generally won't see in the mainstream media.
Enjoy!
1. What Did New Zealand Do With Its Trillion Dollars?
Roger Partridge
- 💰 Trillion-Dollar Myth Revived — The old claim that Muldoon’s cancellation of Kirk’s 1975 super scheme cost New Zealand a trillion dollars has resurfaced as the Government signals higher KiwiSaver contributions.
- 🤔 Opportunity Cost Ignored — The “lost trillion” idea treats the fund as free money, overlooking that contributions would have come from workers’ and businesses’ pockets.
- 🏠 Economic Trade-Offs — In the 1970s–80s, compulsory savings would have reduced household spending, mortgage payments, and business investment during already tough economic times.
- 📉 Alternative Returns Possible — Private saving, debt repayment, or home ownership could have produced comparable wealth to the hypothetical fund.
- ⚖️ Not Simply Right or Wrong — Muldoon’s decision can’t be judged by the fund’s gross size; what matters is the net benefit after accounting for opportunity costs.
- 🏛️ Political Risks of the Fund — Kirk’s scheme was state-run, raising the risk that future governments would misuse compulsory savings for political projects like “Think Big.”
- 🇦🇺 Australia Comparison Oversimplified — Australia’s higher productivity stems from scale, competition, and mineral wealth—not just compulsory superannuation.
- 🧓 Double System Burden — New Zealand already had a taxpayer-funded pension in 1938; Kirk’s scheme would have added a second compulsory layer for years.
- 🌍 Merits of Funded Systems — Contributory models can encourage responsibility and fiscal sustainability, but they are not cost-free or politically immune.
- 🧮 Caution for Policymakers — Future superannuation reforms should avoid romanticised “what-if” histories and focus on realistic, evidence-based policy.
