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Remember Live Aid?

Rob Hosking warns that the Big Cullen Fund isn't a done deal until the votes are counted.

Sunday, July 22nd 2001, 9:26PM

by Rob Hosking

The archetypal "Good cause" event of the mid-1980s, the international concert beamed around the world was a coming together of rock musicians to help raise money for starving Africans.

It was also, as cynics noted at the time, a chance for flagging rock stars to boost their profiles. The opening number was from Status Quo, a prototypal head-banging and spandex outfit who hadn’t been heard of for many a year.

Much beloved by bogons young and old, most of their hits were based around the same stuttering riff - and there they were, banging out ‘Rocking all over the World’ for millions.

Which brings us to superannuation policy. OK, it’s a long stretch, but my thoughts went back to the winter of 1985 when New Zealand First leader Winston Peters – a political bogon if ever there was one - rode to the rescue of Dr Cullen’s political good cause.

Now, like Status Quo, Winston only has a couple of riffs in his repertoire – and, like the Quo, he’s been able to turn them into a run of hits over the years.

A key riff is the idea that the government can actively promote certain types of behaviour.

Inasmuch as New Zealand First has a political philosophy, it is a paternalist one – something which came through in the policy promises it extracted from National when it went into coalition in 1996.

From the free health care for under sixes to the now-forgotten policy of withholding ACC payments from convicted drunk drivers, New Zealand First has spoken to that ‘Daddy knows Best’ tone which has, historically, run thickly through this country’s politics.

It’s an attitude which has tended to lack a strong voice since the 1980s and the advent of the more libertarian "Vietnam generation" – but if you think the voice is totally dormant, check out Peters’ recent speeches on the need to restore the drinking age to 20.

Surprise is another big Peters riff. Usually the New Zealand First leader likes to get the spotlight on him and make it linger there, keeping everyone in suspense for as long as possible.

This has become too predictable, so this time he surprised everyone by coming out of a meeting with Minister of Finance Michael Cullen last month and saying he was "extraordinarily optimistic" the two could reach an agreement on superannuation.

Another riff relates to the whole superannuation issue. When he walked out of National in the early 1990s Peters highlighted National’s volte-face on its superannuation promises in the 1990 election.

Peters’ followers love to point out that their hero has been consistent on this issue throughout his career, something the other political parties cannot claim.

So he wants universal entitlements (only Act disagrees with him there) and individualised accounts.

For the moment, Peters is happy to accept a scheme that will leave the door open, or at least ajar, for future governments to introduce such accounts.

"I think I can support the mechanism," was as far as Dr Cullen was prepared to go, but it appears enough – for now anyway - to get Peters’ support.

The government remains philosophically opposed to such accounts, mostly because they take away the covert redistributive aspects of the Cullen scheme. The New Zealand First approach would mean those who pay in more get more back, whereas under the government’s proposal the payout benefit is the same for all.

National surprised some last week by indicating a willingness to consider individualised accounts.

There are practical difficulties with such a scheme, not least of which it would reverse the benefits of recent changes to tax administration.

There is now considerably less paperwork for employees and employers since the last government abolished the IR12 form, but the introduction of individualised accounts would almost definitely require a return of at least some of that paperwork.

While the abolition of those forms did not see the returns to the Inland Revenue that were projected (initial annual savings were supposed to be nearly $20 million for the current year but will now be closer to $5 million) the cost of changing back is likely to be high.

And such a move would wipe out any likely political benefit the government will get from its current attack on compliance costs. The political blowback on National would probably be higher, so its examination of individualised accounts is unlikely to go very far.

National has also expressed some grumpiness at the way the government has consulted with other parties.

Despite the government’s rhetoric about consultation and not playing politics with superannuation, there is a feeling that, once the Alliance was signed up, Labour ignored the other parties and worked on New Zealand First.

For political watchers, the fact that Labour saw the Winston Peters-led group as a more reliable bet than the Greens has some intriguing long-term implications.

But how reliable a backer will Winston be? His endorsement thus far might have been fairly positive in tone compared to the Peters of old, but when you look at the content there are plenty of doors for an experienced rhetorical nit-picker like him to back out of.

And that’s another riff we may yet hear again.

Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.

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