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Govt Creates Confusion Over Superfund

The Government is cooking the books to create confusion over whether Dr Cullen's flawed super scheme will pay out 10 cents or 25 cents in the dollar of future superannuation costs, National's Bill English said today.

Thursday, July 19th 2001, 6:57PM

"The fact is that, on average, Dr Cullen's scheme will pay out just 10 cents in the dollar of the cost of future superannuation. It is absurd for the Government to suggest that Dr Cullen's scheme will make future provisions secure, when 90 cents in the dollar will still need to be met by future taxpayers.

"Dr Cullen claims his proposal makes superannuation 100 percent certain. In fact, it leaves it 90 percent uncertain.

"Helen Clark and Michael Cullen are also both now claiming the scheme will pay out 25 cents in the dollar. This is a nonsense, which is not supported by Treasury or Budget documents.

"Treasury documents, and their official advice to the Finance Select Committee confirmed the 10 cent figure, with a peak contribution of 14 cents in 60 years time. There is no reference at all to 25c.

"The figures I have cited come directly from the Treasury model of the scheme which is posted at: http://www.treasury.govt.nz/release/super/

"It appears that Dr Cullen is using an accounting trick. He is double counting the tax proceeds from the fund.

"Treasury advised the select committee that the fund is not really generating any extra tax revenue at all. If the money was in taxpayers' pockets, instead of the fund, it would still generate the same amount of tax.

"The money generated from tax on the fund is going into the general taxation pool, not the fund. The tax on the fund's earnings is not tagged back to the fund or to super. It goes into the general pool along with income tax, tax on alcohol and GST.

"Of course Dr Cullen could tax the Superfund less, or even not tax it at all and that would increase the growth rate of the fund and enable it to contribute more than 10c in the dollar to superannuation. However, this would reverse his current policy and he can't have it both ways.

"The smoke and mirrors act he is trying to pull, coupled with the problems inherent in Dr Cullen's scheme, clearly indicate it hasn't been built tough or smart, and it won't prove durable," Bill English said.

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ANZ Special - - 4.99 -
ASB Bank 6.50 5.49 5.49 5.75
ASB Bank Special - ▼4.89 5.10 5.39
BankDirect 6.50 5.49 5.49 5.75
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Credit Union Baywide 6.45 5.75 5.75 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct 6.10 6.45 6.69 7.10
First Credit Union 6.45 - - -
HBS Bank 6.39 5.39 5.39 5.39
HBS Special - 4.99 4.99 4.99
Heartland 6.70 7.00 7.25 7.85
Heretaunga Building Society 6.45 5.40 5.40 -
Housing NZ Corp 6.74 5.70 5.99 6.29
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HSBC Premier 6.60 4.95 4.95 5.40
HSBC Premier LVR > 80% - - - -
HSBC Special - 5.29 5.29 5.29
ICBC 6.75 5.99 6.39 -
Kiwibank 6.40 5.39 5.49 5.69
Kiwibank - Capped - - - -
Kiwibank - Offset 6.40 - - -
Kiwibank Special - 5.09 4.99 5.39
Liberty - - - -
Napier Building Society 6.50 5.80 6.70 -
Nelson Building Society ▼6.70 ▼5.65 ▼5.95 -
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NZ Home Loans 6.85 5.49 5.49 6.29
Perpetual Trust 7.70 - - -
Resimac 5.84 5.60 5.65 5.79
SBS Bank 6.39 5.39 5.39 5.39
SBS Bank Special - 4.99 4.99 4.99
Sovereign 6.60 5.49 5.10 5.75
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TSB Special - - ▼4.99 5.40
Wairarapa Building Society 6.20 5.75 5.95 -
Lender Flt 1yr 2yr 3yr
Westpac 6.40 5.49 5.49 5.59
Westpac - Capped rates - 6.74 6.99 -
Westpac - Offset 6.40 - - -
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Median 6.49 5.45 5.40 5.40

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