Govt secures the numbers

The Government has secured the numbers necessary to get its pre-funding legislation through Parliament after Cabinet to make changes to the bill.

The changes, made to secure the support of New Zealand First, allow for a future Government to allocate the fund's money into individual names.

The most significant point is that any future allocation would be made based on individual taxpayer's contributions, not on a pro-rata basis.

"The allocation would be to contributing taxpayers aged 18 or more and would be paid out according to the specific amount that person had paid in," Finance minister Michael Cullen says.

Cullen says the changes mean, " we should now be able to get the legislation through this year and the fund up and running. That is important because, until the fund has been legislated for and the governance structures established, the money cannot be invested. It can only sit on the Government's accounts."

While Labour and the Alliance have agreed to the changes, they don't support them.

Cullen says the parties "hold strongly to the view that individual accounts would prove unfair to women, low income earners and people with interrupted work histories."

NZ First leader Winston Peters takes the contrary view.

"We cannot agree, however with the suggestion that the individualisation of accounts is somehow unfair-we still believe that this is in fact fair for women, Maori and low income earners than the present scheme," he says.

"Right now if you die before retirement you get nothing for your taxes paid over the years."

Neither National nor the Greens support the move. Act, which has called for individual accounts before, has been silent.

A select committee report on the bill will be debated next week and the Government expects the proposed legislation should be passed in the next couple of months.

You can read Philip's blog here: http://www.goodreturns.co.nz/blog/

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