Inside Money: A leaky week in politics

Photo / Maritime New Zealand.

New Zealand is leaking: gas out west , oil in the east and retirement income policies on the left.

What's the cost of all these leaks? According to the wild guesses of experts, the wreck of the Rena will cost anywhere between $14 million and $53 million while I heard some bloke on the radio say the Maui leak might drain somewhere between $40 million and $175 million a day from the NZ economy.

The cost of Labour's retirement policies haven't been fully leaked yet but we should expect a tighter price range.

Of the two leaked Labour policies, the alleged increase in the pension age to 67 is perhaps the most surprising but also the most defensible. With increased life expectancy, better healthcare etc the population should be able to handle a couple of more years working.

As the increase in pension age will be phased in slowly, as in Australia, hitting the 67 point by 2033, there's plenty of time for us to get used to the prospect of an extended working life.

It will save the country a bundle too, although I'm sure Labour will quantify my estimate.

Labour's second leaked policy did not come as a shock, given it had already been pre-leaked: KiwiSaver for all, hard compulsion.

But the arguments for compulsory KiwiSaver are much less, um, compelling. The scheme has worked well so far with its mix of, admittedly diminished, incentives and behavioural finance tricks. Almost 1.8 million New Zealanders have already signed up.

Delivering a further million or so unwilling clients into the hands of fund managers doesn't really strike me as a traditional Labour position.

At the official policy launch Labour leader, Phil Goff, tried to rebrand 'compulsory' as 'universal', letting the language soften the blow of government coercion.

Goff also revealed the aim would be to lift the overall KiwiSaver contribution rate to 9 per cent by 2022, equivalent to the current Australian rate, which sounds like a reasonable enough amount to save each year.

There has been another rebranding effort here, though, with Labour claiming the burden would fall on employers, who would contribute 7 per cent with the employee contribution remaining at 2 per cent.

But it would be naive to expect the increase in employer contribution would not come at the expense of future wage increases.

There has been little other detail to date, however, you'd hope that the Labour compulsory KiwiSaver plan also includes a redrafting of its operational rules - particularly in relation to the default schemes.

Keep a look out for the next leak.