Labour policies offer hope in tough financial times
Willis probably missed it, but she spoke a lot about the New Zealand Superannuation Fund and KiwiSaver, and then eloquently about the role the Elevate NZ Venture Fund
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Scoop
2 hours ago
- Scoop
On The Perils Of Trading With Trump
Luxon did protest too much on the weekend. Sure, the credulous party faithful were willing to believe him as he continued to lay the blame for the state of the economy on what Labour did, or didn't do three, four or six years ago – but at some point, the man has to look in the mirror. Last year, things were going to be better in 2025. Now, good times are allegedly waiting just around the corner. Maybe next year? Maybe 2027, if you re-elect him? Luxon's core claim that Labour left the economy in a terrible, awful no good mess somehow evaded the notice of all of the international credit rating agencies, who were still giving Labour top marks for managing the economy here and also here and here as well on the eve of the 2023 election. Moreover, the subsequent inflationary bubble/cost of living crisis was the direct result of the subsidies and industry supports that got us through the pandemic, and that corporate NZ was demanding at the time should be bigger, and should be kept in place for longer. Luxon is very keen for all of that to go down the memory hole. But in passing...I wonder which Covid wage subsidies and which sectoral suppport schemes for business does Luxon think were mistakes that he would not have made? On balance, the surge of inflation seems to have been a relatively small price to pay for keeping so many firms afloat, and for saving so many jobs and household incomes. One shudders to think what would have happened if a National government had been in power during Covid. But more to the current point, the coalition government has since done a worse job than any other Western democracy of enabling the economy to recover from its post-Covid inflationary bubble. By dint of its cutbacks to government-led activity, National has prolonged and deepened the recession. Thanks to the random job losses that National has imposed, retailers are suffering and households – made fearful of losing their incomes - continue to be gunshy about spending. There is no end in sight. Where's the beef? Reportedly, us having 15% tariffs slapped on our exports to the US came as a total shock. If so, Finance Minister Nicola Willis and Trade Minister Todd McClay must have been asleep at the wheel. The simple truth is that we run a trade surplus with the US. Meaning: we sell them more than they buy from us. The Aussies by contrast, are running a trade deficit with the US, and have been duly rewarded by Trump for doing so. Looking at those two sets of contrasting figures should have warned our government to expect to be treated differently. In Trumpland, any country that runs a trade surplus with the US is a Bad Country that is ripping the US off. How 'bad' have we been? Pretty bad, in Trumpian terms : In May 2025, United States exported $319M and imported $528M from New Zealand, resulting in a negative trade balance of $209M. Between May 2024 and May 2025 the exports of United States to New Zealand decreased by $85.6M (21.1%) from $405M to $319M, while imports increased by $30M (6.03%) from $498M to $528M. In a sense then, New Zealand is a victim of its own success. Yes, we are now operating in the US market at a 5% competitive disadvantage to Australia. But the new tariff situation isn't entirely bad news for our beef exporters. Brazil has long been a major supplier to US fast food restaurant chains of ground beef – the US is Brazil's second biggest market for beef - but it has just been hit with 50% tariffs, mainly because Trump disapproves of how the Brazilian courts are prosecuting his old pal, Jail Bolsonaro. Australia will have a 5% head start, but there may also be some potential for New Zealand beef exporters to capitalise on Brazil's misfortune. The risk is that Brazilian beef will be sold at a bargain price to other countries, depressing global prices. In the meantime, our emissaries are now heading to Washington to plead our case, but with very few negotiating cards to play. The fatuous free market zeal we displayed in the 1980s and 1990s is once more coming back to bite us. Because New Zealand unilaterally removed its own tariff barriers back then, we have little left to bargain with in our trade talks with other countries. Why should they offer us anything, when we've already given them everything they might want for free? Out of Balance New Zealand makes much of its diplomatic balancing act between China on trade, and the US on defence and security. Yet as the current Trump tariff episode shows, our dependency on the US for trade (and for foreign investment funds) is highly significant. The NZ/US Council executive director Fiona Cooper pointed this out in a speech she gave in March.. 'Over the last 12 months, the US has overtaken Australia to become New Zealand's second largest export market after US is New Zealand's largest market for beef and wine, no doubt including a lot of fine Marlborough wine. It is an important market for many other products including other meat, dairy, honey, casein, fish, fruit and wood, as well as mechanical appliances, medical instruments, electrical machinery, pharmaceuticals and aluminium and steel products. In addition, she noted, ' The US is also a fast-growing market for New Zealand services exports, which were worth nearly $7 billion in the year to September 2024. The US is now our largest services market, taking nearly a quarter our total services exports.' (Those services dollars are being driven upwards by the numbers of US tourists coming to New Zealand. We're mounting ad campaigns to attract more of them.) All signs therefore, would suggest that our booming goods and services trade with the US is badly unbalanced, at least on the terms Donald Trump uses to view the world. Chances are, we will probably continue to run a trade surplus with the US – and will remain in Trump's bad books - until Air New Zealand buys a few more planes from Boeing and/or until via AUKUS, we start buying large amounts of expensive weaponry from the likes of Lockheed Martin, Raytheon and General Dynamics. That would be a bad idea for other reasons. Footnote One: Some of Trump's headline tariff rates are highly deceptive. The 35% headline tariff rate on Canada for instance not only exempts some of the stuff the US wants and needs (eg Canada's energy exports) but also much of the trade carried out under the CUSMA trade agreement (between Canada, the US and Mexico) that's due to be reviewed next year. In the meantime, Canada's real tariff barriers with the US are not 35%, but average out in single digits. In other words Canada too, has some real trade advantages over us in US markets. Footnote Two: Brazil has far more reason to feel aggrieved than we do. After all, it runs a trade deficit with the US - normally treated by Trump as a sign of virtue – but has been hit by a 50% tariff because of its 'persecution' of Bolsonaro. Yet as with Canada, Brazil's headline rate is rife with exemptions on stuff that the US wants and needs, including fresh orange juice. Overall 45% of Brazil's exports will be exempt, but the rate will still hit two of Brazil's main exports to the US very hard: beef and coffee. As mentioned above it is hard to predict what the impact will be on global prices for beef and coffee, as Brazil seeks to find other markets. Increasingly, Brazil's alternative market for its oil, soybean and beef exports is China. Already only 12% of Brazil's exports get shipped to the US, while 28% is being sold to China. Ironically, Trump's mood swings on tariffs are serving to make China look like the sensible adult in the room on global trade, and the preferred buyer of first and last resort. In itself that's an added reason for us not to join an AUKUS military pact targeted at China. Crafting our diplomatic efforts in order to earn imaginary brownie points in Washington looks like being an increasingly futile exercise. Footnote Three: All of the evidence on US trade exemptions suggests that New Zealand's best fallback negotiating strategy with the Trump administration – if we can get in the door at all – would be to argue for an exemption, probably for beef exports. We seem unlikely to get relief from the headline 15% rate, given that this seems to be the bottom line penalty for every country running a trade surplus with the US. Footnote Four One of the stranger items on the Trump tariff enemies list has been the harsh 20% rate levied on Taiwan. This comes amid signs that US support for Taiwan may be waning. It seems only yesterday that the US was giving every sign that any Chinese aggression against Taiwan would be met with the full force of US military now, maybe not so much. Taiwan is suddenly being pushed out at arms' length. For example: on top of those 20% tariffs, there has been this: Washington blocked Taiwan Premier Lai Ching Te's request to visit New York next week during a planned overseas trip to Taipei's Latin American allies. The Trump administration is also considering a downgrade to bilateral defence talks, which it postponed in June. The reason for the sudden cooling? Well, Premier Lai has been talking about leading his faction-ridden minority government into declaring independence from China, a gambit likely to trigger an even more furious response than usual from China. Parts of what China sees as its sovereign territory cannot be allowed to secede at will. That's the kindest interpretation of the US switcheroo, as an attempt to rein in Premier Lai. It is also a useful reminder that the US is an unreliable defence ally, and that its priorities and commitments in the Asia-Pacific region can change at a moment's notice according to its own domestic perceptions and priorities. In sum that's yet another good reason for New Zealand not to join AUKUS, a nuclear pact that would be under the effective operational command of the Americans.
1News
3 hours ago
- 1News
KiwiSaver: Kiwis shift billions from big banks to boutique operators
KiwiSaver members are quitting big bank providers and shifting their investments to independent and boutique operators. Data for the most recent financial year, compiled from documents filed on the Disclose register, shows that Milford Asset Management was the biggest winner, with almost $1.5 billion of net funds transferred in. In total, there is about $120b invested in KiwiSaver. Generate was second, Simplicity third and Kernel fourth. At the other end of the table, ANZ lost a net $728.7 million in transfers, ASB $476.6m and Westpac $353.2m. ADVERTISEMENT ANZ still has the largest market share, at 17.5%, followed by ASB with 14.7%. In 2015, ANZ had almost a quarter of the market, but since then it has suffered through a period of poor performance. The morning's headlines in 90 seconds, including toddler found in suitcase on bus, Russian volcano erupts, and Liam Lawson pips former world champion. (Source: 1News) In Morningstar's March survey, ANZ's conservative fund was bottom of the pack over 10 years, balanced was 15th out of 16, and its growth funds were 11th and 14th out of 14. ANZ said the market was "extremely competitive". "Across the industry, a total of 163,000 KiwiSaver members transferred providers in the year to March 2025, up 22%. "ANZ continues to focus on helping New Zealanders feel more confident and in control of their KiwiSaver investment. ADVERTISEMENT "That means supporting better conversations, especially through our banking channels. We're also proactively checking in and communicating with members, not just waiting for them to come to us. "We're continuing to invest in intuitive tools and digital experiences, such as our Fund Chooser Tool and government Contribution Tracker, to make managing KiwiSaver simpler for customers. "Additionally, we've refreshed our investment beliefs and continued to reduce fees across several of our funds, benefiting our members and reinforcing our commitment to delivering strong, long-term value." Composite image by Vania Chandrawidjaja (Source: iStock/1News) (Source: 1News) Greg Bunkall, data director at Morningstar, said Milford and Generate were the only providers with more than $1b in net inflows in the year. "Those two providers also feature heavily in the top of the league tables regularly. As a provider, you need to have strong brand awareness, marketing, and lead generation functions - but the performance would help. "If you talk to some of the KiwiSaver providers that do well and receive earned media, they will typically see larger than normal switches in days that follow - so that would at least anecdotally support at least some degree of performance chasing in the KiwiSaver cohort." ADVERTISEMENT KiwiWrap topped the table on a measure of the number of dollars in versus the number out, followed by Kernel. Kernel had the biggest percentage growth in funds under management. Milford head of KiwiSaver Murray Harris said its long-term returns were helping to draw customers in. Morningstar reports showed Milford among the top performers over three, five and 10-year periods. He said there tended to be more interest in provider switching in the middle of the year, when people were encouraged to check their funds and ensure they had contributed enough to get the full government contribution. "Members are quite focused on their KiwISaver and get a reminder to look at it. We often see a boost this time of year." He said KiwiSaver balances had become more significant for many members, and it made sense that they were looking at what options were available to them. ADVERTISEMENT People considering switching should compare long-term returns, he said, not just the most recent quarter or year. "We've seen some very specialist funds do very well, gold and crypto are doing well at the moment… don't just look at the short-term returns but the long-term. "How consistent are they at providing those market-leading returns throughout time? Five and ten years would be the minimum ... These are very long-term investments, so the longer the track record you look at, the better." People were more likely to move when markets were performing well, he said. "We've had strong market returns almost every day since the wobble in April, that makes people more confident to transfer. When markets are not doing well, they tend not to transfer because they think they'll crystallise the loss with one provider." But as long as people were moving to a similar fund type, they would not be in a worse position for shifting providers. "You might do better if you recover the fall in value driven by the market sooner." ADVERTISEMENT Kernel founder Dean Anderson said people were becoming more engaged and realising that KiwiSaver wasn't just a bank product. "Now that education and awareness is growing, people realise there are better solutions out there." But compared to the number of people who switched for a better deal on their power or phone, he said, switching activity was still very low. "I think we should expect to see that increase. As balances get bigger, people think, 'Am I better off elsewhere? Are there better fees, better service, better values that align with mine?" The growth of smaller, newer providers showed people had confidence in the scheme, he said. "There's confidence that these players are good, stable, growing businesses. You don't have to be with the bank."
RNZ News
9 hours ago
- RNZ News
KiwiSaver shakeup sees billions shifted from big banks to boutique operators
Photo: 123RF KiwiSaver members are quitting big bank providers and shifting their investments to independent and boutique operators. Data for the most recent financial year, compiled from documents filed on the Disclose register, shows that Milford Asset Management was the biggest winner, with almost $1.5 billion of net funds transferred in. In total, there is about $120b invested in KiwiSaver. Generate was second, Simplicity third and Kernel fourth. At the other end of the table, ANZ lost a net $728.7 million in transfers, ASB $476.6m and Westpac $353.2m. ANZ still has the largest market share, at 17.5 percent, followed by ASB with 14.7 percent. In 2015, ANZ had almost a quarter of the market, but since then it has suffered through a period of poor performance . In Morningstar's March survey, ANZ's conservative fund was bottom of the pack over 10 years, balanced was 15th out of 16, and its growth funds were 11th and 14th out of 14. ANZ said the market was "extremely competitive". "Across the industry, a total of 163,000 KiwiSaver members transferred providers in the year to March 2025, up 22 percent. "ANZ continues to focus on helping New Zealanders feel more confident and in control of their KiwiSaver investment. "That means supporting better conversations, especially through our banking channels. We're also proactively checking in and communicating with members, not just waiting for them to come to us. "We're continuing to invest in intuitive tools and digital experiences, such as our Fund Chooser Tool and government Contribution Tracker, to make managing KiwiSaver simpler for customers. "Additionally, we've refreshed our investment beliefs and continued to reduce fees across several of our funds, benefiting our members and reinforcing our commitment to delivering strong, long-term value." Greg Bunkall, data director at Morningstar, said Milford and Generate were the only providers with more than $1b in net inflows in the year. "Those two providers also feature heavily in the top of the league tables regularly. As a provider, you need to have strong brand awareness, marketing, and lead generation functions - but the performance would help. "If you talk to some of the KiwiSaver providers that do well and receive earned media, they will typically see larger than normal switches in days that follow - so that would at least anecdotally support at least some degree of performance chasing in the KiwiSaver cohort." KiwiWrap topped the table on a measure of the number of dollars in versus the number out, followed by Kernel. Kernel had the biggest percentage growth in funds under management. Milford head of KiwiSaver Murray Harris said its long-term returns were helping to draw customers in. Morningstar reports showed Milford among the top performers over three, five and 10-year periods. He said there tended to be more interest in provider switching in the middle of the year, when people were encouraged to check their funds and ensure they had contributed enough to get the full government contribution. "Members are quite focused on their KiwISaver and get a reminder to look at it. We often see a boost this time of year." He said KiwiSaver balances had become more significant for many members, and it made sense that they were looking at what options were available to them. People considering switching should compare long-term returns, he said, not just the most recent quarter or year. "We've seen some very specialist funds do very well, gold and crypto are doing well at the moment… don't just look at the short-term returns but the long-term. "How consistent are they at providing those market-leading returns throughout time? Five and ten years would be the minimum. These are very long-term investments, so the longer the track record you look at, the better." People were more likely to move when markets were performing well, he said. "We've had strong market returns almost every day since the wobble in April, that makes people more confident to transfer. When markets are not doing well, they tend not to transfer because they think they'll crystallise the loss with one provider." But as long as people were moving to a similar fund type, they would not be in a worse position for shifting providers. "You might do better if you recover the fall in value driven by the market sooner." Kernel founder Dean Anderson said people were becoming more engaged and realising that KiwiSaver wasn't just a bank product. "Now that education and awareness is growing, people realise there are better solutions out there." But compared to the number of people who switched for a better deal on their power or phone, he said, switching activity was still very low. "I think we should expect to see that increase. As balances get bigger, people think, 'Am I better off elsewhere? Are there better fees, better service, better values that align with mine?" The growth of smaller, newer providers showed people had confidence in the scheme, he said. "There's confidence that these players are good, stable, growing businesses. You don't have to be with the bank." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
