This is not the physical climate change that is developing because of natural events and man made pollution caused by the needs of the present financial system.

The climate change that will decimate New Zealand is a financial one.

The signs are there and, by politicians acting as if they weren't, they indicate a gloomy future for New Zealanders. With 50,000 New Zealanders last year racing to Australia for refuge from the already dismal economic situation in New Zealand only to find things really aren't that much better, exceptions accepted, the wonder is why parliamentarians in Wellington have been willingly sucked into a maelstrom of financial disaster.

The aspect to watch is the world wide financial bubble that is sovereign debt bonds.

And yet we have the news media and not well informed parliamentarians insisting that we keep digging a hole because at the bottom is financial security for those in old age. They haven't reached the bottom yet and never will.

Assured provision from income in retirement is a holy grail which will never be reached while sailing the wrong way. One does not expect the author of the Cullen superannuation plan to do otherwise than chart the way to the rocks of disaster. His call to make compulsory financial contributions to the kiwisaver project and raise rates to 8% and then 12% shows he either has no idea of what he is suggesting or he is in league with money manipulators or people whose purpose is not to make actual things or grow food or farm animals, but to play Monopoly with the financial rewards of people's own hard work.

The NZ Herald reports that "the builders or retirement income sub-contractors are getting on with the job". Apparently over the 12 months to September 30 "Milford Asset Management (93.0 per cent), Gareth Morgan (37.3 per cent), BT / Westpac (28.5 per cent), Fisher Funds (21.8 per cent), OnePath (19.7 per cent), ASB (16.2 per cent), Mercer (15.8 per cent), Fidelity Life (15.4 per cent) and TOWER (11.3 per cent) all managed to report significant double digit funds growth rates".

Did they report better working conditions for slave labourers in Asia, paid employment for millions in Europe, physical improvements in the life of people, food for the starving, clean water for millions, increased opportunities for the young, an elimination of the war industry or anything positive that would improve life? No, all they did was to report how the financial gambling casino has given them better financial returns as if such better returns would be an assurance of an income in retirement for those reaching a certain age, the benchmark of which is changed periodically because the wonder superannuation schemes cannot provide.

Whatever happened to Muldoon's (who?) retirement at 60? Come to that whatever happened to the halfpenny? (the what?) All victims of the financial instability.

Relying on the finance casino to bring financial security is a fantasy.

The kiwisaver and other avenues of financial speculation, for that is all that it is, cannot guarantee a full return on savings because fees and other financial "arrangements" are deducted annually and the end result is less than it could be. And then, what about annuities? The value of annuities in the western world has been falling. Of course they could rise - that's the fun of betting.

As a letter writer to a newspaper commented "I would be happy to have a mechanism that allows the state to invest some of our pension pot in infrastructure projects provided that our funds were guaranteed a return on the investment for the pensioners, not the government."

Perhaps it's time to revive the National Provident Fund or establish something similar.

It's certainly not time to put more money on a horse not likely to last the distance.

- contributed by Michael Clatford, a London-based jobbing economist

Published: December 2012