A bunch of people seem to have taken the Green MP and minister for women’s comments about diversity on boards very personally, when the research suggests there’s nothing controversial about them at all, writes Anna Connell for RNZ. 

I am always astounded by those who take a comment about institutionalised racism or sexism personally, but people seem to be very upset about comments from Julie Anne Genter suggesting “old white men in their 60s” needed to start moving off boards to “allow for diversity and new talent”.

Opposition leader Simon Bridges has called it “virtue signalling”, making a statement because you reckon it will go down well rather than because you actually believe it.

I think it’s actually pretty difficult to prove Genter doesn’t believe what she’s saying because we’re not actually dealing in beliefs here, we’re dealing in facts. All she is really doing is pointing out the elephant in the room.

Eighty four percent of board members in New Zealand are men and whichever way you want to cut that, it’s not good.

It’s also not good that a report out on International Women’s Day last month revealed that women made up only 18% of senior management teams at companies in New Zealand. That was 2% down on the previous year and the worst result since the survey began in 2004.

You’d probably also agree that it’s not good that a 2016 World Economic Forum report suggested it might take 170 years to eradicate the disparity in pay and employment opportunities for men and women. The same report in 2015 suggested it would only take 118 years.

The New Zealand Institute of Directors added to the pile of things that aren’t good in 2017 with research that revealed a lack of ethnic diversity among the country’s highest paying boards, with little representation from people of Māori, Asian and Pacific Island descent.

In order to redress these imbalances, we simply need some people on boards who are not old white men, which means some old white men need to vacate their positons. This is just maths.

And why do we need to redress this balance? Well, in case you don’t think it’s a good idea based on the old “basic human rights” argument, I’ll try to persuade you with some economic ones.

A Westpac report last year indicated a 50-50 gender balance in management roles could boost the New Zealand economy by nearly $1 billion. In the US, research by McKinsey showed that reducing gender inequality could boost US GDP by $2.1 trillion.

Genter isn’t suggesting that old white men in their 60s have nothing to offer or don’t deserve to be on boards, she’s just suggesting that some other people also have things to offer and despite deserving to be there, they currently aren’t.

She’s suggesting that in order to redress this imbalance, one that countless researchers, the World Economic Forum and many global and local business leaders agree isn’t good, we might need to do something about it at a pace that’s faster than glacial.

She isn’t personally blaming white men of any age for this problem, but instead acknowledging that when a gap is that big, it indicatives systemic problems and institutionalised prejudice. And while Simon Bridges might be “all for positively trying to increase your diversity over time and doing the right thing there”, the questions Genter is pressing us to address with urgency are “How much more time?” and “What does waiting cost?”

This article first appeared at RNZ, and is republished with permission.

This section is made possible by Simplicity, New Zealand’s fastest growing KiwiSaver scheme. As a nonprofit, Simplicity only charges members what it costs to invest their money. It already has more than 12,500 plus members who, together, are saving more than $3.8 million annually in fees. This year, New Zealanders will pay more than $525 million in KiwiSaver fees. Why pay more than you need to? It takes two minutes to switch. Grab your IRD # and driver’s licence. It really is that simple.

When should you start you children’s KiwiSaver? Simplicity’s Amanda Morrall says it depends on how much you can contribute. 

When someone offers you $1,000 for free, you’d be an idiot to say no. 

Kiwis aren’t dumb and this sweet incentive was key to KiwiSaver’s early success. The additional $1,000 a year in matching funds from the government (also known as member tax credits) was another juicy carrot that kept people piling into the much touted retirement saving scheme in its early days.

When National killed the $1,000 kickstart and halved member tax credits to a maximum of $521 a year in 2011, it took a bit of shine off KiwiSaver but not enough to do any real harm. We know that because KiwiSaver now has more than 2.8 million members and close to $47 billion under management. There’s no stopping this train.

Like thousands of other early adopters, I jumped on board and dragged my kids along too so they could cash in on the $1,000. That’s all they got, as the member tax credits were reserved for adults.

For the sake of ease (which pretty much sums up the behaviour of most KiwiSavers) I selected my bank from the myriad of dizzying choices of providers to choose from. I’ll give myself a shred of credit here though. I chose my bank for my kids’ accounts because at that time kids’ accounts were “fee free”. What I failed to appreciate, nor was it ever explained, was that the investment fees were still in effect. This two-tiered fee structure is probably one of least understood features of KiwiSaver.

It wasn’t until I was working in the trenches of KiwiSaver as a journalist specialising in this stuff that I became aware of that important fact. It made me even more cynical about banks – but it also shocked me into action.

I switched the kids out and started to take their accounts more seriously. You can get annoyed with the banks or whoever else profits from your money, but taking responsibility is a more productive approach. In KiwiSaver, both fees and contributions require attention. On modest balances fees seem like a big deal but compared to the impact of regular contributions, it’s a minor issue.

For years, the kids’ accounts were drip fed with $20 a month. Sure, it was better than nothing, but over a year, $240 didn’t do much for their investment. It barely moved the dial. Today, we have about more than 330,000 kids under 17 in KiwiSaver. I’d wager a guess that the vast majority have either no or very low contribution rates.

A few years ago, when I researched the impact of fees on $1,000 balances, I tried to find out how many kids’ accounts were opened with a kickstart and subsequently abandoned. That information wasn’t publicly available but the individual providers I polled (along with parents I knew) admitted contributions were irregular at best. Most were flat lining at $1,000 or just above.

We know from the Financial Markets Authority’s latest KiwiSaver report that at the end of March 2017 just over 1.1 million members were not contributing to their KiwiSaver funds. Of these non-contributing members 428,836 were either over 66 years or younger than 17 years. That makes sense, because at both ends of the spectrum the money taps are squeezed tight.

So does it makes sense to put a child into KiwiSaver?

As a former financial journalist and now an financial educator, it’s a question I get asked frequently. My standard advice goes something like this: “I can’t give personalised advice, only information,” which I’ll restate here as the same caveat applies.  

The argument for signing kids up to KiwiSaver used to be a lot stronger when there was $1,000 on the table for free. That’s gone now and, until they turn 18, they’re not eligible for member tax credits.

The more pertinent question parents need to ask of themselves is whether they plan to contribute to their kids’ KiwiSaver account, until they’re able to do so themselves.

If the answer is yes, then KiwiSaver makes sense, either as a way to save for a deposit on a first home, or as a big leg up on retirement.

Consider this: If you socked away $5 a day (of every working day) from age 20 till 65, you’d have close to $200,000 in retirement. That doesn’t even include the impact of regular contributions from your working life, your employer’s contributions or the compounding effect of the $521 in additional member tax credits. It simply assumes an annual rate of return of 5% on that money put away yearly.

For parents stretched to meet their daily living costs, making regular contributions to little Joey’s or Jane’s account may seem unrealistic. Even less so if little Joey or Jane has siblings. Still, I wouldn’t rule out willing relatives (for example grandparents) keen to channel funds into something that will have a legacy and won’t be binned by the next birthday.

Also, from my own experience kids grow up way faster than you expect. When they hit working age, those with a 10 or 18 year head start in the savings department will be massively advantaged.

Rather than give my teens pocket money, I give them $20 a week paid into their KiwiSaver accounts which are finally seeing some traction. I’m also using it as a training tool to get them interested in and excited about personal finance. When they see their accounts growing as they are, they appreciate how compound interest works, plus they’re starting to wrap their heads around how stock markets work.

And there’s the rub. Adolescent or adult, complacency is the biggest enemy when it comes to money and saving. Unlike adults, whose entrenched financial habits can kill their retirement future, kids are a blank slate. The best offense against poverty in old age is an early education in money.  

This section is made possible by Simplicity, New Zealand’s fastest growing KiwiSaver scheme. As a nonprofit, Simplicity only charges members what it costs to invest their money. It already has more than 12,500 plus members who, together, are saving more than $3.8 million annually in fees. This year, New Zealanders will pay more than $525 million in KiwiSaver fees. Why pay more than you need to? It takes two minutes to switch. Grab your IRD # and driver’s licence. It really is that simple.