ISSUE
Friday, August 22, 2025
Volume 16 . Issue 73
In an article titled “It is possible for NZ to save its way out of debt” in the April 15 issue of Indian Weekender, financial expert and writer Ajay Kumar had listed a number of options that the government could take.
Mr Kumar had also presented his suggestions to an august audience that included Prime Minister John Key at a dinner earlier in April.
With the announcement of the proposals in Budget 2011, we note that the National Party-led government has taken on board a number of those suggestions.
“The pre-budget announcement regarding changes in KiwiSaver and some of the actions the government has taken and is contemplating are very much the same as suggested in the presentation on on April 1, which had been presented to the prime minister,” Mr Kumar told Indian Weekender.
“Our first suggestion was to stop the tax credit of $20 a week which comes to $1040 annually. It has now been halved to $521. But our idea has been widely accepted and appreciated by other leaders as well.
“The second suggestion was to further promote and increase contribution under KiwiSaver, which has also been given the green light from Finance Minister Bill English as contributionsn will go up to 3% from 2013.
“We also suggested that these changes should be implemented from the year 2012, once the New Zealand economy starts recovering. We have prepared a chart where we have shown that the size of KiwiSaver could be around $500 billion in the next 20 years. In this chart, we also assumed an increase in contribution in KiwiSaver from the year 2012 – but in the budget, it happens a year later.
“In our presentation and in the article, we emphasised on the internal savings/ borrowings rather than external borrowings from foreign lenders to reduce the pressure of foreign lenders on New Zealand’s economy,” Mr Kumar said. “It is good to note that strategy is at the centre of this year’s budget.”
It is evident that since April 1, the government is borrowing more from within New Zealand rather than externally. There have been two big issues of government bonds locally and both have been oversubscribed, another instance of a suggestion that seems to have been taken aboard.
“I trust that other suggestions will also see the green light soon, as they are a practicable way for the country to come out of the debt trap while building savings,” Mr Kumar said.
In an article titled “It is possible for NZ to save its way out of debt” in the April 15 issue of Indian Weekender, financial expert and writer Ajay Kumar had listed a number of options that the government could take.
Mr Kumar had also presented his suggestions to an august audience that included...
In an article titled “It is possible for NZ to save its way out of debt” in the April 15 issue of Indian Weekender, financial expert and writer Ajay Kumar had listed a number of options that the government could take.
Mr Kumar had also presented his suggestions to an august audience that included Prime Minister John Key at a dinner earlier in April.
With the announcement of the proposals in Budget 2011, we note that the National Party-led government has taken on board a number of those suggestions.
“The pre-budget announcement regarding changes in KiwiSaver and some of the actions the government has taken and is contemplating are very much the same as suggested in the presentation on on April 1, which had been presented to the prime minister,” Mr Kumar told Indian Weekender.
“Our first suggestion was to stop the tax credit of $20 a week which comes to $1040 annually. It has now been halved to $521. But our idea has been widely accepted and appreciated by other leaders as well.
“The second suggestion was to further promote and increase contribution under KiwiSaver, which has also been given the green light from Finance Minister Bill English as contributionsn will go up to 3% from 2013.
“We also suggested that these changes should be implemented from the year 2012, once the New Zealand economy starts recovering. We have prepared a chart where we have shown that the size of KiwiSaver could be around $500 billion in the next 20 years. In this chart, we also assumed an increase in contribution in KiwiSaver from the year 2012 – but in the budget, it happens a year later.
“In our presentation and in the article, we emphasised on the internal savings/ borrowings rather than external borrowings from foreign lenders to reduce the pressure of foreign lenders on New Zealand’s economy,” Mr Kumar said. “It is good to note that strategy is at the centre of this year’s budget.”
It is evident that since April 1, the government is borrowing more from within New Zealand rather than externally. There have been two big issues of government bonds locally and both have been oversubscribed, another instance of a suggestion that seems to have been taken aboard.
“I trust that other suggestions will also see the green light soon, as they are a practicable way for the country to come out of the debt trap while building savings,” Mr Kumar said.
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