The government has confirmed it will cut contributions to the superannuation fund.
They are doing the right thing. It makes absolutely no sense to borrow money to invest at a loss, especially when the dollar is low which makes overseas investments more expensive and risks reducing the return if/when the dollar rises.
John Key has emphasised this doesn’t signal a cut in pensions.
“I have made it quite clear that if superannuation was to be cut, and I make the same claim here in the house today, I will resign as Prime Minister and resign as an MP,” Mr Key said in Parliament.
No doubt the opposition will try to make political capital out of this but I’d have thought borrowing money to invest at a loss be more of a threat not just to pensions but everything else the government funds.