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Economic Commentary
Business confidence
has continued to improve. A
year ago the world financial system was bordering on ruin so the relief
is understandable.
Much
of the overall increase in spending has come from governments rather
than the private sector. This
leaves little basis for strong continued growth.
The danger now is that governments may tighten their economic
policies too early.
The
recent weakness in the U.S. dollar and the U.K. pound has not been
unexpected given the massive amounts of borrowing by both governments in
their attempts to stimulate their economies and prop up their financial
services. With this has
come a loss of international confidence especially in the U.S. dollar
which is slowly declining from its role as the international reserve
currency.
more
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Superannuation News
The
National Government’s changes to KiwiSaver cap the tax benefit at 2%
for member and employer contributions.
For that reason we suggest that if you wish to contribute 4%
yourself, contribute 2% to KiwiSaver and 2% to a superannuation scheme.
This
gives you the maximum KiwiSaver tax saving (provided you are earning
$50,000 per year) while allowing you to put any further contributions
into traditional superannuation which is accessible before age 65.
This
also applies if you are lucky enough to have an employer who is willing
to contribute 4% to KiwiSaver on your behalf.
In this case we suggest that you ask whether 2% could be
contributed to KiwiSaver, with the other 2% to a company superannuation
scheme.
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