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Superannuation reform is absolutely necessary

ACT still believes that savings based super is the best option and is the only long term sustainable policy choice.

Thursday, October 15th 1998, 12:00AM

by Philip Macalister

ACT policy at the last election was for a compulsory savings based superannuation. ACT still believes that savings based super is the best option and is the only long term sustainable policy choice.
Given National's hostility to compulsory funded superannuation, it seems unlikely ACT can get agreement on a compulsory funded scheme. Furthermore, the public voted last year 92% to 8% against such a scheme.
ACT says:
- New Zealanders must have the means to save for their own retirement. This means lower taxes.

- Employer super schemes, which are closing in great numbers, need to be encouraged.
- ACT favours some tax concessions to encourage savings based super.
- ACT wants to explore giving taxpayers the choice to opt out of the tax based scheme in favour of their own private provision.
Piecemeal changes to superannuation are not desirable. The switching of annual superannuation adjustments from the basis of average wages to the consumers' price index (CPI) may be sensible but it should have occurred as part of a comprehensive policy on superannuation.
Instead, we have a public relations debacle with the changes being rushed through the House under urgency and without prior consultation. Why the Government has dished up its own head on a platter is anyone's guess. ACT has been advising the Government for some time to convene a meeting of the Accord, including ACT.
ACT - which National, Labour and the Alliance have blocked from participating in the Accord - is in favour of open multi-party talks on super. ACT wants to de-politicise superannuation. All parties should work through an open process to agree on the facts, then present them to the public and work from there through an open Accord process to deliver a long term plan, at least out to the year 2040.
All political parties have a duty to try to de-politicise super. Labour's phoney savings scheme is actually bankrupt and nothing more than electoral fraud - a factual analysis would quickly prove this to be the case. New Zealand can't afford politically inspired fraudulent schemes.
The evidence for the unsustainability of the current scheme is incontrovertible and is outlined in detail in the ISI Report of June 1998 (http://www.isi.org.nz/info.htm).
The Government can never win by conducting major policy changes to superannuation under urgency without laying a strong foundation to communicate the rationale for change. Sadly, for us all, the government has failed to go through a due process of communication and education. It could have done so, and won the day because research has consistently shown that superannuation reform is absolutely necessary.
« Supertalk - your place to learn about and discuss superannuationLabour outlines its super policy »

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