Latest from Kiwiblog
Kiwiblog
7 days ago
- Politics
- Kiwiblog
UK migration trends
Matt Goodwin looks at how current migration trends will change the UK, if unchanged. Key findings: The proportion of the UK that is 'White British' will drop from 73% today to 57% in 2050 and 34% in 2100 The non-white proportion will increase from 20% to 59% by 2100 19% of the UK will be Muslim by 2100 Hard to imagine that Japan would (for example) have an immigration policy where native Japanese would become a minority in Japan within two generations.
Kiwiblog
14-06-2025
- Politics
- Kiwiblog
AUKUS is probably dead
A recent release: Prominent New Zealand leaders Helen Clark, Sir Geoffrey Palmer, Sir David Carter, Dr Don Brash, Mr Carl Worker, and Mr David Mahon have placed a full-page open letter in Stuff and NZME newspapers expressing grave concern about New Zealand's foreign policy open letter, co-signed by the group of influential New Zealand figures, cautions Prime Minister Christopher Luxon, and his Government, against taking an adversarial stance against China as part of an alignment with the United States.'While good relations with the United States must be maintained, we see considerable disadvantage to New Zealand in becoming part of defence arrangements, including the associated prospective AUKUS Pillar Two, which are explicitly aimed at China,' said former Prime Minister Helen Clark.' For many years, New Zealand has maintained a balanced foreign policy, building strong relationships with both the United States and China. That has served our national interests well. Recent moves by the Government, however, suggest an increasing willingness to align New Zealand with the United States in a way that could harm our relationship with China.' First of all AUKUS is probably dead as far as NZ is concerned. Trump doesn't see allies, just cost centres. He will not see any benefit in the US sharing military technology with New Zealand. Hell, he may even renege on the deal with Australia. The chance of NZ being invited in, is minuscule now I would say. The characterisation of recent foreign policy changes as being aligning with the US against China is misleading, in my opinion. First of all the changes started under the Ardern Government (which they deserve credit for). They started because Russia launched a war of aggression against Ukraine, and China has been a cheerleader for them. The decade long project of believing trading with authoritarian states would make them more benign has (sadly) failed. China has itself become much more aggressive. The change in NZ's stance has zero to do with the US. It is to do with how Russia and China have behaved. In fact the US is itself becoming very unreliable, and hence NZ's future is probably not with AUKUS, but a looser collection of alliances with Australia, UK, the EU, Canada, Japan, South Korea etc. The letter specifically addresses recent actions, including the authorisation of New Zealand naval vessels through the Taiwan Strait, the strengthening of defence ties with the Philippines amid tensions in the South China Sea, and visits to Taiwan led by Government parliamentarians. Why would we not have MPs visit Taiwan, and not have better defence ties with the Philippines? We're not a vassal state of China.
Kiwiblog
13-06-2025
- Business
- Kiwiblog
Guest Post: KiwiSaver, the employment contract and Budget 2025
A guest post by Michael Littlewood: KiwiSaver is about to change again. The Budget announced an increase in the minimum employee contribution (from 3% to 4%) over three years and in the matching minimum contributions paid by employers. The government is also cutting its own contribution from a 50% match to the first $1,042.86 of members' contributions to 25%. So, the maximum taxpayer subsidy drops from $521.43 a year to $260.72. It will also be income-tested so that the highest paid employees (receiving more than $180,000 will lose that. Whether or not these changes are a good idea, I want to address the lessons that employers might take from the latest changes. The first obvious lesson is that, whenever a government gets involved in the saving decisions of employees, change is a constant and that has direct consequences for employers. Since KiwiSaver was first announced in 2006, there have now been five[1] changes of significance. All will have resulted in significant administrative cost to employers. One possible lesson from this is that employers should aim to stay away from their employees' decisions about whether to save for retirement. The second lesson is that governments really shouldn't be telling employers how or how much they should be paying their employees. Aside from some minimum requirements, the employer should be setting the total cost and agreeing with employees how they want to receive that. In theory, the employer should be indifferent to employees' decisions, as long as the total of direct and indirect pay is unaffected. But that leads us into a contentious subject: the tussle between 'pay + benefits' and 'total remuneration'. Some definitions: 'Pay + benefits' says that employers set basic wages/salaries and then separately decide what other non-cash benefits are available (such as subsidised superannuation, medical insurance, death/disablement insurance). The employer leaves it for employees to decide which extra benefits they want. The total compensation each employee receives will depend on value of the benefits chosen by the employee. This can be thought of as the 'traditional' way that employees were paid. 'Total remuneration' says that the employer sets the total it is prepared to spend on a particular role but then lets each employee decide how to receive that total. A 'good' employer might offer help to the employees' making appropriate choices but the employer won't mind whether it's all paid in direct wages/salary or part direct/part indirect. We don't know how many employees are paid on the different bases. Some suggest that 40% of all employees are on 'total remuneration'. I think that should be 100% for reasons I discuss below. But, with respect to the latest KiwiSaver changes, the difference matters: Under pay + benefits , each KiwiSaver member paying the minimum 3% of pay will eventually pay 4%, as will the employer. So the member's total compensation will increase by the employer's 1%. Take-home pay will reduce by the additional member's contribution of 1%. , each KiwiSaver member paying the minimum 3% of pay will eventually pay 4%, as will the employer. So the member's total compensation will increase by the employer's 1%. Take-home pay will reduce by the additional member's contribution of 1%. Under total remuneration, the extra 1% from the employer will come out of the employee's 'total remuneration' so that take-home pay will fall by about a combined 2%. It's a bit more complicated as KiwiSaver's contributions are based on the direct taxable pay so, if 4% of the total remuneration is deducted (the employer's eventual mandatory contribution), before-tax pay is now 96.15% of the starting 100% and both the employer and employee will pay 4% of that (4% of 96.15% + 96.15% = 100%). Also, the employer's contribution is taxed under slightly different rules to direct pay. Regardless, the employer doesn't pay any more in total to get that job done. To some (the Retirement Commissioner included) this looks as though employees have been chiselled out of money they should be getting on top of their regular pay. The Retirement Commissioner wants the practice outlawed – she wants the employer's contribution to be a genuine addition to direct pay, as a 'reward' for making the commitment to KiwiSaver. That is the wrong way of looking at things. Consider two employees, both doing exactly the same kind of work and offering the same value to their employer. In one case (pay + benefits), the employer doesn't know what 'total compensation' is until the employee decides whether to contribute to KiwiSaver. We don't know what proportion of all employees who work for pay + benefits employers, are not contributing to KiwiSaver but, for every such non-contributor, the employer saves, soon-to-be, 4% of their pay. The position is different in a total remuneration environment. There, both parties know what the employee will receive in total. Whether the employee contributes to KiwiSaver doesn't affect the total. The employer pays the same. Given that both employers are paying market rates for that particular role, the total employment costs must be higher for the total remuneration employer. The pay + benefits employer is better off in total by the number of non-contributors. Pay + benefits seems impossible to justify as an HR strategy. How can the employer explain that the total compensation is greater for contributing members over non-contributors, both doing the same job? Employees might have good reasons not to save through KiwiSaver. Here are some possibilities: they can't afford to join; they don't want their savings locked up until age 65; they don't trust such a long-term programme; they have other saving priorities (such as paying off debt) or they may not need to save any more for retirement. Also, some employees are not allowed to join KiwiSaver, or the employer does not have to contribute to KiwiSaver. Those over 65 are one group; also, those who do not have permanent residency but are able to work. It seems unfair that non-permanent residents cannot qualify for the employer KiwiSaver contribution and gives a perverse incentive to employ foreigners. Under pay + benefits, both those groups are penalised. With total remuneration, both can be treated fairly. But, most important of all, whether an employee contributes to KiwiSaver should have no bearing on the total amount the employee receives for the job done. And it's wrong that the government has any kind of role in deciding that total or how it should be paid. Employers who haven't thought about all this before now might be encouraged to do that by the government's 2025 decision to change the KiwiSaver rules again. If they want protection against further regulatory intrusions into their pay policies, shifting to total remuneration should insulate them. Much more importantly, it will treat all employees on a common basis, regardless of their private saving needs. For an employee on total remuneration, the only material advantage of saving through KiwiSaver will now be the government's annual subsidy of just $260.72 ($0 for pay of more than $180,000). For that, the employee must give up access to those savings until age 65. Employees could reasonably decide that any subsidy doesn't compensate for that loss of flexibility. Most KiwiSaver providers offer parallel, accessible saving options at a similar cost so there is no particular advantage, from an investment perspective, in saving through KiwiSaver. The KiwiSaver changes announced in the 2025 Budget might have some unintended long-term consequences. [1] The original model (2006) was a modest member-only, voluntary contribution model with the $1,000 'kickstart' as the only government incentive. That changed (#1) with the introduction of compulsory member and increasing employer contributions in the final version coupled with significant tax breaks (May 2007). The annual fee subsidy and employer tax credit were removed and contributions capped in 2008 (#2) but resumed increases in 2013 (#3). The 'member tax credit' was halved in 2012 and the kickstart was removed in 2015 (#4) Now the 'government contribution' is halved and will be income-tested (#5).
Kiwiblog
13-06-2025
- Politics
- Kiwiblog
A new ticket for Auckland?
Newsroom reports: Auckland Mayor Wayne Brown has expanded his Fix Auckland campaign from one candidate to two with the addition of deputy Desley Simpson, now he is recruiting a team to gain influence on the council. The treaty that Brown reached with Simpson, seeing her decide against challenging the mayor at October's election, is intended to be a forerunner to the Fix Auckland slate for council seats. Brown says he alone was Fix Auckland in 2022 but now wants a team. 'She will be standing for Fix Auckland and we look forward to others joining us.' This is a very significant move, as it means Desley will be dropping the C&R ticket which she has been elected on previously. Will Fix Auckland stand against C&R or co-operate with them? A right-leaning councillor, Sharon Stewart, is retiring from the Howick ward and that seat alongside fellow ward councillor Maurice Williamson, could be a possible joint Fix Auckland ticket. The Whau ward councillor, Kerrin Leoni, is contesting Brown's mayoralty so her ward seat could yet be another Fix Auckland target, having swung between C&R and Labour candidacies in past elections. Manurewa-Papakura ward councillor Angela Dalton, who had a strong personal following as a former local board chair, is also retiring, leaving an opening that could fit Brown's intentions. Dalton's Papakura colleague, Daniel Newman, has supported Brown's major initiatives. A ticket which reduces the number of high spending Councillors would be a good thing. But if Fix Auckland and C&R end up splitting the vote, then it may backfire. Ideally all the non-left tickets should co-operate rather than compete.
Kiwiblog
13-06-2025
- Politics
- Kiwiblog
Not a coincidence
Yesterday: The UN nuclear watchdog's board of governors on Thursday (local time) formally found that Iran isn't complying with its nuclear obligations for the first time in 20 years, a move that could lead to further tensions and set in motion an effort to restore United Nations sanctions on Tehran later this year. Today: The facility at the heart of Iran's nuclear ambitions was engulfed in flames on Friday, according to social media images geolocated by CNN and Iranian state television. That seems a lot more effective than sanctions! Multiple Iranian state media outlets have confirmed that Major General Hossein Salami, the head of the country's elite Islamic Revolutionary Guard Corps (IRGC), was killed Friday morning during Israeli strikes. The IRGC is one of the most powerful tools wielded by the Iranian state, overseeing its ballistic missile development, crushing dissent at home and projecting Iranian and military operations in the Middle East region. That's a bonus. The dissent crusher got crushed.
